Seatrade Middle East Maritime Energy Transportation Middle East Oil and Shipping FAST FORWARD ! 5 December 2006 Peter M. Swift Managing Director, INTERTANKO

Seatrade Middle East Maritime Energy Transportation Middle East Oil and Shipping TODAY

Seaborne Crude Oil Flows

Seaborne oil trade and Middle East oil productionSource:INTERTANKO/Fearnleys '000 bil tm mbd ,000 6,000 9,000 12,000 Middle East Oil Production - mbd Tonne miles

World Oil Reserves by Country, as January, 2006 (billion barrels) Source: EIA / Oil & Gas Journal, Vol. 103, No. 47 (December 19, 2005) World Total = 1,293 Billion Barrels

Share of World Oil Reserves, 2006 Middle East Western Hemisphere Europe / FSU Asia & Oceania Africa Source: EIA

World Oil-Producing Regions (mbd) Source: EIA

Seatrade Middle East Maritime Energy Transportation Middle East Oil and Shipping FAST FORWARD !

Oil Demand – Established world Courtesy: Braemar Seascope / Source: EIA

Oil Demand – Emerging world Courtesy: Braemar Seascope / Source: EIA

Crude Imports (m tonnes) Source: Braemar Seascope

Oil Consumption Potential Source: Braemar Seascope

Refinery Expansions: * TOTAL 8,212 kbd *excluding Russia Source: Braemar Seascope

Indian oil consumption, production, refinery capacities Assumptions: According to the Indian Ministry of Oil, India is expected to increase product exports from some 0.4 mbd today to 1.9 mbd in 2012, Indian oil demand is expected to increase by 3%, which will result in an increase in crude oil imports from 2.3 mbd in 2007/08 to 4 mbd in (The distance from the Middle East to India is relatively short and this increased oil trade will only require some 10 VLCCs.) Source: BP/INTERTANKO+: 1000 barrels per day

Indian refinery projects India's Refining Expansion ('000 b/d) Company Location Existing New Year Essar Oil Vadinar NA Nagarjuna Cuddalore NA ONGC Mangalore Reliance Jamnagar IOC Panipat IOC Paradip NA Hindustan Bhatinda NA Bharat Bina NA Total 1,580

CHINA: Crude oil import sources (‘000 tonnes) Source: Braemar Seascope

China Imports vs. Tanker Demand Source: Braemar Seascope

Tanker deliveries, demolitions & phase-outSource:INTERTANKO m dwt

Middle East - Oil and Shipping OPEC Middle East forecast oil production (IEA): –29.1 mbd in 2005 –30.2 mbd in 2010 –34.9 mbd in 2015 –45.7 mbd in 2030 Middle East refinery capacity –7.179 mbd in 2006 –7.199 mbd in mbd –7.219 mbd in mbd –7.839 mbd in mbd –9.889 mbd in mbd 1 mbd to the US, Cape/Suez requires 39 VLCCs 1 mbd to Japan, Malacca requires 22 VLCCs

Prospects for Tanker Shipping Upside –Increased dependence on Middle East as from 2010 – more long haul –Declining North Sea production –Tanker phase out 2010 Downside –High deliveries 2007 (+7%), 2008 (+6%), and 2009 (+8%) –New export refinery capacity in India and Middle East, - positive for product tankers – negative for VLCCs –Russian pipeline to China/east –Increased non-OPEC (W Africa/N America) oil production in short term

Seatrade Middle East Maritime Energy Transportation Fast Forward On Tanker Issues ?

Key Issues for Tanker Shipping Maintaining the international governance structure for the shipping industry - support for IMO (& ILO) - “good” flag, class, PSC, etc. Promoting ability to self-regulate - based on “best practices” Environmental Challenges - oil in water, ballast water management, air emissions, ship demolition Availability of properly trained officers - supply, unfair treatment (MLC), criminalisation

“Good” Flag

BUILDERS MANAGERS EQUIIP SUP CLASS FINANCIERS CARGO BROKERS P&I HULL INSR FLAG STATE COASTAL STATE WATERWAYS PORTTERMINALS BUNKERERS PILOTS TUGS LABOUR CREW AGENTS REPAIRERS SALVORS INCIDENT MGT SHIPBREAKERS EDUCATION TRAINING DESIGN OWNER OPERATOR STAKEHOLDERS AGENCIES GOV IMO STATESLOCAL GOV CARGO

Poseidon Challenge - commitment to continuous improvement - commitment to working with all partners

The Poseidon Challenge - an invitation to Partners

Joint ITOPF-INTERTANKO Seminar INTERNATIONAL SEMINAR ON TANKER SAFETY, POLLUTION PREVENTION & SPILL PREPAREDNESS Jumeirah Emirates Towers Hotel, Dubai 6 December 2006 Registration from 0830 Seminar 0900 ALL WELCOME !

THANK YOU

Middle East NOCs 69.6% Africa NOCs 6.6% Russia NOCs 6.8% Latin America NOCs 9.8% Europe NOCs 1.0% Exxon/Mobil 1.0% Asia NOCs 2.1% BP 0.9% Chevron 0.9% Shell 0.5% ConocoPhillips 0.6% Investor owned oil reserves: ~ 4% of total Ownership of Global Proved Oil Reserves (1.1 trillion barrels) Source: EIA / National Commission on Energy Policy

Middle EastRest of World Source: EIA World’s Excess Production Capacity is in the Middle East (mbd)

Share of World Natural Gas Reserves Middle East Africa Asia & Oceania Europe/FSU Western Hemisphere Source: EIA

Middle East Expansion refinery projectsSource: INTERTANKO/INTERTANKO/Petroleum Economist

Middle East New refinery projectsSource: INTERTANKO/Petroleum Economist

Seatrade Middle East Maritime Energy Transportation Middle East Oil and Shipping Future Shocks !

 Political  Economic  Environmental / legislative  Other ??

Most Major Oil Market Disruptions Have Occurred in the Middle East In Terms of Peak Oil Disruption Size, Million Barrels per Day Source: EIA

More than One-Third of the World’s Seaborne Oil Trade is through the Persian Gulf The Strait of Hormuz is the World’s Most Strategic Oil Chokepoint with flows in 2005 of more than 17 mbd Source: EIA

World Oil Prices in Three Cases (2004 dollars / barrel) Low Price High Price Reference Historical Projections Source: EIA / International Energy Outlook 2006

Reported tanker incidents Jan-Nov 2006 : total 237Source:INTERTANKO/Informa 14% 26% 9% 32% 19% Collision Grounding Fire/Explosion Hull & Machinery Misc/unknown Collision Groundings Hull & Machinery (total 61: 24 Engine;3 hull) Miscellaneous F & E Type incident:

Seatrade Middle East Maritime Energy Transportation Middle East Oil and Shipping >>> Forward !

World Oil Consumption, 2003, 2015, and 2030 (mbd) OECD Non-OECD Source: EIA / International Energy Outlook 2006

World Oil Consumption, (million barrels per day) Source: EIA / International Energy Outlook 2006