Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level 1 Tanker Outlook – Singapore 2006 Key Concerns Facing the Tanker Industry1 Tanker Outlook 2006 Singapore 26 th September 2006 Tim Wilkins Regional Manager Asia Pacific

Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level 2 Tanker Outlook – Singapore 2006 Key Concerns Facing the Tanker Industry2 1. Perspective – Where we are today 2. Key Concerns (Challenges): - Environmental – the new ‘License to Trade’? - Technical - Human Element - Political Introduction

Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level 3 Tanker Outlook – Singapore 2006 Key Concerns Facing the Tanker Industry3 We can already say that 2006 will be a profitable year for tanker owners, certainly better than expected With the exception of 2002, it has also been a good decade Prestige – Two tier market / Maritime Safety Package Venezuela strike – US oil form further a field Bosporus Problems – Congestion / Night transits Hurricanes in Gulf of Mexico – Oil Production Facility and Refinery closures Nigeria and Iraq – Hostilities forcing market disturbance Prudhoe Bay - Partial closure of North America’s largest oil field Perspective

Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level 4 Tanker Outlook – Singapore 2006 Key Concerns Facing the Tanker Industry4 Concerns from a market perspective, despite growing oil demand predictions: US and Chinese market sustainability/slow-down Reduced demand due to high oil prices Increasing tanker fleet But 2006 was better than expected: Iranian Tanker Storage Prudhoe Bay Market becoming accustomed to special driving forces Additional considerations for the future? Perspective

Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level 5 Tanker Outlook – Singapore 2006 Key Concerns Facing the Tanker Industry5 Ship Recycling Perspective Human Element Common Structural Rules Ballast Treatment Systems Air Emissions Regional Regulation Revisions to MARPOL Annex II Oil Dependency Criminality Seafarer Competency Charterer Relations Zero Tolerance Zero Discharge

Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level 6 Tanker Outlook – Singapore 2006 Key Concerns Facing the Tanker Industry6 A New Mandatory Convention in Improved Recycling Facilities Safety and Environmental Management Systems 40-60% rate reduction? - Requirements for Ship Owners Greenpassport and Hazardous Materials Inventory ($200,000) Gas-free / tank cleaning ($250,000?) Pre-cleaning? Environmental Ship Recycling

Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level 7 Tanker Outlook – Singapore 2006 Key Concerns Facing the Tanker Industry7 Ship Recycling Current lack of recycling activity Environmental

Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level 8 Tanker Outlook – Singapore 2006 Key Concerns Facing the Tanker Industry8 Ship Recycling A New Mandatory Convention combined with increase in phase out tonnage… Environmental

Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level 9 Tanker Outlook – Singapore 2006 Key Concerns Facing the Tanker Industry9 Ballast Water Management Treatment Systems Regional legislation and limited ability to comply Air Emissions MARPOL Annex VI Changes proposed, lower SOx (0.5%/1%/1.5%) more SECAs Regional requirements (SECAs), EU, California The next step; particulates, GHGs, VOCs Bunker Prices & Bunker Quality Environmental Cargo Generated Engine Generated

Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level 10 Tanker Outlook – Singapore 2006 Key Concerns Facing the Tanker Industry10 Common Structural Rules Robustness and Durability – before and after CSR? Vetting (Charterer relations) Technical Inspections Freight and Demurrage Terminals MARPOL Annex II Chemical tanker markets – CoF for ships loading IBC cargoes Technical

Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level 11 Tanker Outlook – Singapore 2006 Key Concerns Facing the Tanker Industry11 Seafarer Recruitment and Training Concern over decreasing qualified crew In-house training incentives Canadian C-15 Bill Seafarers to prove their innocence Ship Sourced Pollution Directive INTERTANKO while condemning illegal discharges, strongly objects to criminalising accidental pollution Need clarity in law AND consistency with international law Penalties should be proportionate AND have parity with other similar offences (ashore) Suspects must be treated fairly AND in accordance with basic human rights States should comply with their obligations to provide reception facilities AND Places of Refuge Human element

Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level 12 Tanker Outlook – Singapore 2006 Key Concerns Facing the Tanker Industry12 Ship Sourced Pollution Directive Destroys “no blame” cultures Discourages openness and frank reporting Deters salvors in circumstances when we need them most Deflects focus for proper casualty investigation and denies benefits of same Destroys and damages morale of seafarers and others Dissuades new recruits and accelerates departure of experienced staff Drives responsible people and companies from the business Is this what the legislators and society are seeking ? Political

Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level 13 Tanker Outlook – Singapore 2006 Key Concerns Facing the Tanker Industry13 Comments Key Concerns for Tanker Operators – Key Concerns for Analysts? “Market becoming accustomed to special driving forces” - Driven by a need to change environmental and safety performance - Two-tier system – developing countries versus developed - Regional and International Regulation - Urge to move away from oil dependency

Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level 14 Tanker Outlook – Singapore 2006 Key Concerns Facing the Tanker Industry14 thank you…