The National Shipping Company of Saudi Arabia (NSCSA) TANKERS STRATEGY & ECONOMICS Maritime Saudi Arabia 2010 1 June 2010 Humoud A. Al-Ajlan CEO, NSCSA

CONTENTS Contents Slide Structure & Growth Strategy 2-4 Tanker Market Outlook 5 -Tanker Demand 6-9 -Tanker Supply 10-14 VLCC Earnings, Orderbook & Newbuilding prices 15 Current Tanker Owners 16 Tanker Owners’ Newbuilding 17 Tanker Outlook Summary 18-19

The National Shipping Company of Saudi Arabia (NSCSA) 1

ORGANIZATION STRUCTURE CHEMICAL TRANSPORT GENERAL CARGO IS ORGANIZED IN 4 BUSINESS UNITS SHIP MANAGEMENT OIL and GAS OIL & GAS 2

PROFITABLE OPERATION SAR Millions 3

CONSOLIDATED TOTAL ASSETS SAR Millions 4

Tanker Market Outlook 5

(Early Release) December 2009, McQuilling Estimates TANKER DEMAND Oil Demand Recovery Recent forecasts suggest 1.23 million barrels per day increase in 2010 over 2009 2008 demand levels will not be exceeded until 2011 but… Recent IEA estimates an increased demand in 2010 based on improved IMF outlook (+1.6 million barrels per day) Source: IEA Oil Market Report, November 2009 & February 2010, US EIA AEO (Early Release) December 2009, McQuilling Estimates 6

VLCC still dominates on ton-mile basis TANKER DEMAND Crude 2009 Tanker Demand Non- Seaborne Transport, 42.8% Panamax, 3.3% VLCC, 20.7% Suezmax, 12.3% Aframax, 21.0% 57.2% of tons of crude and residual product cargo demand transported by tankers This marine fraction is slowly increasing with time 2009 marked the first year more cargo was transported by Aframax tankers than VLCCs Aframax 898 million tons VLCC 878 million tons Balance 20 million tons 1,407 billion ton-miles 5,666 billion ton-miles (4,259) billion ton-miles VLCC still dominates on ton-mile basis 7

TANKER DEMAND Crude Tanker Demand Trading patterns for VLCCs are evolving from a West-centric to East-centric configuration - This effect impacts on tanker supply, not demand measured in tons, due to longer transport distances given this shift in the crude supply origin Percent Change 2009 trade routes +/- % vs. 2008 8 10

TANKER DEMAND Crude Tanker Demand- VLCC Looking forward: A change in the trade routes for VLCC tankers indicates that only limited future increases from long-haul trades due to limits on increased production (e.g. from Venezuela, Mexico, N.Sea. Russia to the East) Analysts suggest that the crude oil tanker sectors will remain demand challenged for the next few years - expected ton-mile demand growth to average about 1.5% annually VLCC: 1.9% SUEZ: 1.2% AFRA: 1.2% PANA: 1.5% 9 11

TANKER SUPPLY Tanker Orderbook Contracting (All Tankers) After a record peak in contracting of new tankers in 2008, new build orders have declined. New orders effectively ceased during the first part of 2009. Overall, a total of 112 orders for tankers 27,500 Dwt and above were recorded in 2009 compared to 270 in 2008, a decline of 64%. Q1 2010 ship yards have lowered prices and are again attracting orders. 10 12

Two successive year with record deliveries TANKER SUPPLY Tanker Orderbook Deliveries Two successive year with record deliveries 11 13

TANKER SUPPLY Tanker Orderbook Deliveries The total order book is estimated at 899 tankers of 27,500 Dwt and above (excluding chemical carriers) This orderbook are being built in 65 shipyards, with Korean, Chinese and Japanese yards comprising 90% of the orders Korean shipyards hold just over half of tanker orders; Chinese yards 22% and Japanese yards 16% Estimates for VLCC deliveries, project only a small number of cancellations and incorporate current assumptions on delivery delays 12 14

VLCC Additions & Removals TANKER SUPPLY VLCC Additions & Removals Current fleet 529 ships 41 VLCC remaining to deliver 2010 some “slippage”/delays expected into 2011. 84 SH VLCCs still trading while scrapping and removals of SH VLCCs have intensified in 2010 and could balance deliveries. A massive delivery of 86 new builds for 2011. Poor freight markets in 2011 would accelerate recycling of remaining SH VLCCs. However, impact of removal of remaining SH ships is expected to have minor impact on freight markets. McQ 13

Other Supply Factors TANKER SUPPLY Oil storage has occupied (removed from trading) between 30-40 ships – current May/2010 figures suggest 30 ships employed in storage including 18 NITC ships Contango priced oil markets drive increases in VLCC employed for floating storage – we anticipate this trend to continue to occur in 2010 High fuel prices reduce fleet performance speed reducing supply of ships 14 16

Record number of ships ordered VLCC EARNINGS, ORDERBOOK & NB PRICES Price $Mn Numbers Vessel Rate $/Day Record number of ships ordered at record prices VLCC Newbuilding Price USD Mn Orderbook Number VLCC Average Earnings $/Day 15

CURRENT TANKER OWNERS Number of owners Total Ships Clarksons May 2010 16

TANKER OWNERS’ NEWBUILDING 26 6 15 16 3 Current Owners Clarksons May 2010 New Owners Total Ships 17

TANKER OUTLOOK – SUMMARY Shock of the financial crisis is fading but tanker freight markets are nervous. Fleet capacity is rising sharply with only mild recovery of oil Demand. Freight “crisis” easing but asset “crisis" not over yet. Financial stress on owners, banks, and ship yards has caused increasing downward pressures on asset prices. Asset prices have turned upwards recently on recovery of freight markets and speculative buyers attracting IPO public market investors. 18

TANKER OUTLOOK – SUMMARY The 2010-2014 period likely to be dominated by “Net Fleet Growth” picture and the negative influence of growing tonnage supply across most tanker sectors. As a result of tonnage supply exceeding demand, we expect rates in most sectors to soften from 2010. Operating returns would be further eroded if bunker oil prices continue to increase. Call on OPEC oil production increases beyond 2011 and year-on-year demand growth suggests earnings will return by 2012-2014 to positive results. 19

The National Shipping Company of Saudi Arabia Thank you for your attention!