CSO, Gulf Energy Maritime Diversity of Shipping Capt. Robert Buckham CSO, Gulf Energy Maritime MIEVOM 22nd April 2018 11/8/2018

Overview of GEM Began trading operations in 2004. 4 shareholders - 3 major shareholders from GCC Currently have 19 vessels in fleet - Chemical and Product Tankers ranging from 37,000 to 115,000 dwt. Worldwide trading – Loading Arabian Gulf proceeding Europe, Far East, Africa, Australia and the Americas Employ approximately 750 officers and ratings, own manning agency in India and 50 office staff in Dubai Officers are predominately Indian with Filipino crew, also use Romanian, Croatian and Russian officers and 4 vessels have Indian crew Vessels on TC with several oil majors as well as spot fixing vessels on the open market using in house chartering 11/8/2018

Diversity of Shipping All companies conduct their business differently. End goal is the same – differing strategies - but!!! Purpose of every business – “Earn Money” Ships earn “Freight” by carrying and discharging a cargo Industry demands shipping business is conducted safely, for the respective charters, the crew and safeguarding the environment Discuss: Commercial Market What cargo – oil, chemical, gas? How do we get the cargo? How do we prepare a ship for the cargo – Its Importance, Issues Legislative, Industry and Company safety Security – Not just piracy Industry Issues 11/8/2018

The “Commercial Market” Tanker “rates” the amount shipowner is paid per day, is driven by the balance between demand and supply. Tanker demand market has two main drivers: Oil demand from the Consumer Oil supply from OPEC, Oil Trading Companies or Storage Tanker supply market is driven by three main factors and influenced by one-off factors – ships used as storage or sudden price changes Ships currently in service – Total 4913 New build order book – On Order 513 by 2021 Scrapping and removals - New Regulation, Old Age, Market changes Ships in service Today VLCC=723;Suez=508;Afra=979;Panamax=434;MR=1417; Handy=852 = Total 4913. Cost USD of VLCC 80-87m; Suez 50-52m; Afra 41-46m; MR 34-36m 130 VLCC cargoes from AG per month – therefore “fierce” competition 11/8/2018

Cargo - Type of Ship Oil Tanker (Dirty – crude oil) Generally large ships such as Suezmax - 160k Aframax - 110k, VLCC - >180 to 320k and ULCC - >320 Dwt Product Tanker (CPP or DPP) Generally 55,000 to 120k Dwt VLCC 300 to 330 metres, 58 metres beam, depth 31 metres (draft >21 metres) ULCC up to 470 metres beam 60 metres 11/8/2018

Cargo - Type of Ship Chemical ( Type 1, 2 or 3 dependent upon environment and safety hazard of cargo) Most are type 2 and 3 as type 1 very specialized. Ships generally 5 – 35K. Tanks of stainless steel or protective coating such as epoxy or zinc Specific liner trade use 35 - 47K 11/8/2018

Other - Type of Ship 11/8/2018

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How do we get a Cargo Oil majors and energy trading companies have access to refineries Brokers working on behalf of a client will offer a cargo for transportation Brokers approach owners and if cargo is of interest voyage estimate is conducted - factors considered, vessels readiness, location of vessel, tank cleaning preparation, cargo quantity, bunker consumption and Charterers Broker will relay indication to the Charterer and if interested the Charterer will request a firm offer. Firm offer will include the main terms of a CP with a reply time – Counters - ‘on subjects’ once main terms are agreed Approvals – load port, discharge port, vessel certificates Voyage orders received 11/8/2018

Vessel and Tank Preparation – Importance 11/8/2018

Considerations Owner is responsible for preparing the tanks – independent inspection by surveyors Owners is responsible for the safe carriage of the cargo and delivery of the cargo - Bill of Lading Require competent, experienced persons for operations especially on chemical or gas ships – Cargo endorsements Time frame for cleaning can be several days to many weeks depending upon the last cargo carried and the next cargo loading Commercial pressure upon the Masters and crew to complete the job Work load upon the crew – 18 to 24 persons onboard Work and rest hours, fatigue Health issues – last cargo, dangers of explosion, inert gas, enclosed space entry and PTW - Safety 11/8/2018

Legislative Safety Safety First - taken very seriously – Number 1 element SOLAS – Introduced in 2014 after Titanic Marpol – Introduced in 1973 and Mandatory 2nd October 1983 ISM Code – Mandatory 1st July 1998 MLC - Seafarers bill of rights Mandatory 20th August 2013 These are regarded as “4 Pillars of Safety and Security” for the Quality Shipping Industry Seafarers are 27.8 times more likely to suffer work related fatal injuries than shore workers 11/8/2018

Industry Requirements for Safety International Safety Management Code (ISM) DOC - Safety Management System – Policy and procedures for safe operation, safe working environment - assess all identified risks to its ships and personnel - scope for continual Improvement - Achieved by: Internal Audits – 1st Party by Company on its vessels External Audits - 3rd Party – Class Certification Commercial Assessments – 2nd and 3rd Parties – TC TMSA Flag State Inspections – Compliance Convention and Legislation SIRE Inspections – Oil Major Inspections Port State Control – Compliance and Standard of Shipping within its territorial waters 11/8/2018

Company Requirements for Safety Develop a “Safety Culture” – Onshore and Onboard – Promote company values - Shared perception – every body doing it right Leadership – Office Involvement from the top Motivation – Happy seafarers? Well Trained – Shipboard and onshore Training days onboard – Familiar with equipment Training drills – Mandatory and Regulatory Safety Trainers visit – 10 day each year Officer and Crew seminars – Jollyboys outing and Family days Every job is Risk Assessed – hazards mitigated, toolbox meeting, BBS and stop work cards 11/8/2018

Company Requirements for Security “Documented Procedures” to Identify Threats of Petty Theft Vandalism Stowaways Cargo theft Inadequate port security Trafficking of people, arms or drugs Smuggling Piracy Sabotage and arson Terrorism Cyber security Travel policy 11/8/2018

Issues Safety and Security Shipping High Risk Business – Reputations! Shortage of competent seafarers – The Human Element Long periods away from home, social isolation, long work hours, fatigue and quality rest Commercial and regulatory pressures – more frequent inspections and admin tasks – more scrutiny from everyone Stress – Compounded when transiting HRA areas – Why? Social Media – Facebook, whatsapp, twitter; Social Media Policy to ensure ‘Rest”. Social media groups Mental Health – ITF study 600 seafarers, 14% often depressed, 50% sometimes depressed, 52% know onboard persons depressed and 23% know persons considered suicide - Australia issued Maritime Safety Awareness Bulletin in March 2018 and studies are being further conducted in UK 11/8/2018

Shipping of Diversity Thank you 11/8/2018