1. RINA / IMarEST, Isle of Man “TANKER SHIPPING TODAY” 12 January 2010 Peter M Swift, MD INTERTANKO

2. “TANKER SHIPPING TODAY” INTERTANKO Oil shipping Tanker Industry Today and recent performance Key Issues Financial Crisis and tanker markets Information Sharing

3. INTERTANKO Today 260 + members operating ca. 3,100 ships > 75% of the independent oil tanker fleet and > 85% of the chemical carrier fleet 330 + associate members: in oil and chemical tanker related businesses 15 Committees – 5 Regional Panels Principal Offices – London and Oslo Representative Offices in US, Asia and Brussels Observer Status at IMO, IOPC, OECD and UNCTAD International Association of Independent Tanker Owners

4. SHIP OWNEROIL COMPANYSPOKESMAN One of the Rogues of the Oil Tanker Industry Who am I ?

5. Global dependence on oil tanker transportation World Oil Consumption 3.8 billion ts Transported by sea 2.4 billion ts > 60% transported by sea

6. The Tanker Industry Today Tanker Industry’s Goals are aligned to those of the IMO Safe and secure Environmentally responsible Reliable Efficient (Low cost)

7. Investment in New Tonnage - Move to Double Hulls More than USD 500 billion invested since 2000 with the result that ~95% of tanker fleet* double hulled by end 2010 * over 10,000 dwt

8. Average age of tanker fleet above 10,000 dwt Based on LRFairplay Average Age - Years

9. Tanker Incidents and accidental pollution Number incidents Based on data from LMIU, ITOPF + others

10. Accidental oil pollution from tankers Based on ITOPF/Fearnleys 1000 ts spilt 1000 bn tonne miles trade

11. Oil price and freight rate – real and nominal USD per barrel

12. Tanker Shipping’s GREEN Credentials This car, weighing one tonne, uses 1 litre of fuel to move 20 kms This oil tanker uses 1 litre of fuel to move one tonne of cargo 2,500 kms –more than twice as far as 20 years ago

13. Tanker Industry is accustomed to being under the spotlight Watched by: Regulators Politicians Public Licences to trade rigorously applied by: Flag states Classification Societies Insurers Charterers Monitored by: Coastal and Port states

14. Key Issues for Tanker Owners Today Establishing and maintaining an international framework of consistent regulations and standards Delivering best environmental performance Ensuring availability of good people (and quality ships) Ensuring welfare and well-being of ships’ crews Meeting the challenges of Piracy Surviving the financial crisis Sharing Information

15. Establishing an international framework of consistent regulations and standards Shipowners supporting: International rather than unilateral legislation Ratification of IMO (and ILO) Conventions IMO Member State Audit scheme (Flag & Coastal States) Harmonisation and uniformity across Port State Control regimes Development and Application of Common Structural Rules for Tankers Classification societies’ procedural requirements, unified requirements and unified interpretations Greater uniformity in chartering practices and standards

16. Delivering best environmental performance Air emissions - Green House Gases - Exhaust Gas emissions (Annex VI & its revisions) - VOC emissions Spill Prevention and Response Planning Ballast Water management Biofouling Antifouling systems Ship Recycling Port Reception Facilities (adequacy & affordability) Waste management (onboard and ashore) Radiated Noise pollution Cetacean strikes

17. Ensuring availability of good people - recruitment, training and retention Both a quantity and quality challenge ! Recruitment initiatives covering: Raising awareness of the industry: - www.maritimefoundation.com and Careers outreach programmewww.maritimefoundation.com - www.shippingfacts.comwww.shippingfacts.com - www.careers-at-sea.org and DVD: Careers in International Shippingwww.careers-at-sea.org - www.bimco.org/Corporate%20Area/Seascapes.aspxwww.bimco.org/Corporate%20Area/Seascapes.aspx Attracting entrants to the Maritime Professions (IMO: “Go to Sea” and other industry campaigns) Human Resources are respected as an asset, not treated as a cost !

18. Ensuring availability of good people - recruitment, training and retention Both a quantity and quality challenge ! Training and retention initiatives covering: Provision of Cadet berths and training facilities on ALL new ships and maximum utilisation of cadet berths on existing ships Revision of STCW Convention Development of Tanker Officer Training Standards (TOTS), covering proficiency and experience, as the industry standard Establishment of Seafarer Focus Groups to provide feedback of experiences

19. Ensuring welfare and well-being of ships’ crews Initiatives covering: Unjustified criminalisation Support for IMO-ILO guidelines on Fair Treatment of Seafarers (in event of Maritime Accident) Improved conditions for shore leave and access Reduction in number of inspections Less bureaucracy and associated paperwork Guidelines for safe handling of cargoes and fuels, tank cleaning and entry Greater clarity in Operating Manuals Guidelines on implementing ILO Convention on “work and rest hours” Higher standards of accommodation as industry “norms” (including e.g. broadband, etc.)

20. Meeting the challenges of Piracy Gulf of Aden / Somali Basin Guidance: Register Company and Ship with MSCHOA Plan for Transit Following Best Management Practices (V2) Report regularly to UKMTO Dubai (or MARLO) A problem in many regions, including South China Sea, Somali Basin and Gulf of Aden, Gulf of Guinea and South America !

21. Meeting the challenges – through commitment to: - continuous improvement - working with all partners

22. Acting together - examples Pilotage in international straits as per IMO recommendations Development of a Marine Electronic Highway Establishment of a lifeboat user group with manufacturers to seek remedies for shortcomings Campaign to ensure availability of safety-related information on the characteristics of dangerous cargoes Development of Incident Information exchanges Development of guidelines on tanker maintenance and repair procedures

23. Surviving the financial crisis ! Demand : World oil trade Supply : Ships on Order & Fleet development Shipbuilding capacity Tanker market

24. World Trade & GDP Source: Clarksons (September 2009)

25. World Oil Demand vs. GDP Source: Clarksons (September 2009)

26. Seaborne Crude Imports Source: Clarksons (September 2009)

27. Total Oil Products Imports Source: Clarksons (September 2009)

28. Orderbook Development (All ship types) Source: Clarksons (September 2009)

29. Tanker Fleet Development 0 50 100 150 200 250 300 350 400 450 500 550 197019721974197619781980 1982 1984198619881990199219941996199820002002 2004200620082010 2012 deadweight (million) 10-24 tanker handy MR Panamax Aframax Suezmax VLCC Source: Clarksons (September 2009)

30. Orderbook by ship type (as % existing fleet) Source: Clarksons (September 2009)

31. Shipbuilding output and forecast Source: Worldyards/INTERTANKO Aug 09 m cgt

32. Shipbuilding output potential Source: Worldyards/INTERTANKO Aug 09 m cgt Worldwide estimates in m cgt - small and big ships (Aug 09)

33. Shipyard output potential - surplus Implications ? Distressed sales / lower prices Quality and standards maintained or weakened Pressure on suppliers and sub-contractors Greater customer focus & customisation and government interventions ?

34. Source: Baltic Exchange/INTERTANKO USD/day Average tanker freight rates (based on Baltic Exchange rates)

35. Tanker sales for demolition and VLCC freight rate Source: INTERTANKO m dwt USD / day * Until week ending 4 September ** Sales for demolition until 4 September *** Clarkson Freight rate AG-Japan week ending 4 September

36. Tanker deliveries, removals, max phase-out [All tankers > 25,000 dwt] m dwt Assumed balanced market end 2008

37. Lower Freight Rates & Fleet surpluses Implications ? Challenge to maintain quality and standards Challenge to meet the issues of the day

38. Sharing information – Accidents, incidents and near-misses Ideally this should involve all stakeholders: –Owners –Builders –Classification Societies –Insurers –Administrations (Flags) –IMO Maximising feedback, learning lessons and preventing re-occurrence

39. Tanker Incidents and accidental pollution Number incidents Based on data from LMIU, ITOPF + others

40. Sharing Information – Tanker incidents in 2009 Based on data from LMIU + others

41. Tanker hull & machinery incidents Number of MACHINERY incidents Based on data from LMIU, ITOPF + others Year<10 years10-24 years>25 yearsTotal Average age 200241532217.5 20033831418.4 20042721118.8 200592053417.6 2006121733214.3 2007202534813.2 20082524105915.6 20091822 135316.7 Total931384227315.6

42. Thank you Gura mie eu For more information, please visit: www.intertanko.com www.maritimefoundation.com www.poseidonchallenge.com www.shippingfacts.com