Single Hull Tankers Phase-out and conversion Nicholas Fistes Chairman, INTERTANKO Dalian, 6 November 2008 World shipping (China) summit 2008

INTERTANKO MISSION To provide leadership to the Tanker Industry in serving the world with safe, environmentally sound and efficient seaborne transportation of oil, gas and chemical products. VISION FOR THE TANKER INDUSTRY A responsible, sustainable, respected Tanker Industry, committed to continuous improvement and constructively influencing its future. THE POSEIDON CHALLENGE COMMITTMENT - to continuous improvement - to working with all partners - striving to achieve the goals of: Zero fatalities, Zero pollution, Zero detentions

World oil demand mbd

Oil demand by area mbd Source: BP/IEA

Oil consumption per capita (2008) Litres per year ,200 1,500 1,800 2,100 2,400 2,700 3,000 USA JapanUKEuropeRussia China

Chinese oil imports (Approx 90% from Middle East in 2008) Source: BP Review/IEA mbd Products Crude

The importance of oil tanker transportation World Oil Consumption 4.0 billion ts per year Transported by sea 2.6 billion ts per year   60% transported by sea - of which 8% to China

Global Financial Crisis Fleet Development & Seaborne Oil Trade Oil tanker fleet m dwt Source: INTERTANKO, Fearnleys Seaborne oil trade bn tonne miles

Tanker fleet growth m dwt number

The tanker market facing Financial and economic “crisis” Abating demand Demand primarily powered by China Probable cancellation of contracts Increasing fleet Scrapping up … … as conversions to dry bulk halted

Global Financial Crisis Tanker Fleet Removals Source: INTERTANKO m dwt Conversions Small Aframax Suezmax VLCC ? ?

Investment in new tankers Some $ 370 billion invested since 2000 with the result that 96% of tanker fleet double hulled in 2010* *Assuming only DB/DS tankers continue to trade beyond 2010, some SH tanker will most probably continue until the age of 25 years old

Single-hull phase-out regulation U.S. OPA 90 DH for new tankers SH phase-out by 2010 (by 2015 LOOP and lightering areas) IMO – MARPOL DH for new tankers SH phase-out from 2005 through 2010 SH phase-out by 25 years or by 2015 (whichever earlier) - subject to flag/port administration IMO – MARPOL 13H Bans HGO as cargo in SH tankers

SH trading beyond 2010 ? AustraliaNo ChinaNo EU No Mexico No Romania No S KoreaNo* PhilippinesNo* UAE No* (*No official note sent to IMO yet) BahamasYes BarbadosYes Liberia Yes Marshall Isl.Yes Panama FlagYes Japan Yes SingaporeYes India Yes Hong KongYes** (** Max. 20 years old) Flag/Port State positions re MARPOL 13G trading up to the age of 25 years United States N/A (OPA90)

Tanker deliveries, removals, max phase-out All tankers > 25,000 dwt m dwt Assumed balanced market end 2007

Critical tanker issues Maintaining an international framework of consistent, high standards and regulations Delivering best environmental performance Ensuring availability of qualified and motivated seafarers (and quality ships) to ensure high quality and environmental friendly tanker transportation

“Proud of our People” Human Resources Our greatest asset

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Tanker deliveries, removals, max phase-out 25,000 – 59,999 dwt m dwt Assumed balanced market end 2007

Tanker deliveries, removals, max phase-out Panamaxes 60,000 – 79,000 dwt m dwt Assumed balanced market end 2007

Tanker deliveries, removals, max phase-out Aframaxes 80,000 – 119,999 dwt m dwt Assumed balanced market end 2007

Tanker deliveries, removals, max phase-out Suezmaxes 120,000 – 199,999 dwt m dwt Assumed balanced market end 2007

Tanker deliveries, removals, max phase-out VLCCs 200,000 dwt + m dwt Assumed balanced market end 2007