1. Tanker performance Instituto Iberoamericano de Derecho Maritimo XII Congress/XX Anniversary Seville 14 November 2007 Erik.Ranheim@INTERTANKO.com Manager Research and Projects, INTERTANKO

2. International Association of Independent Tanker Owners A non-governmental organization established in Oslo in 1970 to represent tanker owners Membership: 280 members 40+ countries 2,800+ tankers 226 million dwt 75% of independent tanker fleet 300 Associate Members Oslo – London - Singapore – Washington Spokesman – information service – meeting place INTERTANKO

3. MISSION “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 and respected Tanker Industry, committed to continuous improvement and constructively influencing its future.” 2. INTERTANKO

4. Tanker challenges Carrying the world’s most strategic raw material from some of the most politically tense areas in the world Carrying liquids and gases that pollute and are potentially hazardous Operating in a very volatile and uncertain market.

5. Introduction to the tanker industry

6. Seaborne Crude Oil Trade Flows 2006

7. Seaborne oil trade and Middle East oil production mbd Source: Fearnleys/IEA '000 bil tm

8. VLCC spot and break-even rates $ per day freight rate

9. Tanker shipping cost efficient Oil prices and tanker rates – real and nominal $/barrel

10. Tanker shipping cost efficient US CIF oil price/freight costs - $/barrel 43% 5% 6% 7% 6% 5% 4%

11. Tanker shipping cost efficient Gasoline price at the pump Euro per litre

12. Tanker ownership m dwt Current value fleet :~ $200 bn Freight income 2006:~ $45 bn

13. Tanker contracting by segment Source: Clarkson Shipyard Monitor m USD m dwt

14. Tanker fleet, orderbook and phase out tankers above 25,000 dwt m dwt 84 m dwt 138 m dwt 339 m dwt

15. Tanker phase out, deliveries, scrapping tankers >25,000 dwt, assume 2.5% trade growth m dwt

16. Tanker fleet by hull% * Assumes phase out according to regulations and trading until the age of 25 years after 2010 except that 10 SH aframaxes/VLCCs/suezmaxes are assumed to be removed in addition to phase out 2008-2010 (conversions).

17. Source: IEA World oil demand increase - mbd mbd Increase 2008 Rest of world: Other Asia: 0.19 mbd Latin America: 0.16 mbd Africa: 0.11 mbd Europe: 0.21 mbd Others 0.4 0mbd Total 1.94 mbd

18. Tanker safety and the environment

19. Tanker trade and accidental oil spills 99.99998% of the cargo arrives safely1000 ts spilt bntonne-m Amoco Cadiz 78 – 223 4 Independenta 79 - 95 Atlantic Empress 79 – 287 1 Exxon Valdez 89 – 37 Haven 91 - 144 ABT Summer 91 – 260 2

20. Tanker incidents – all sizes all types No incidents‘000 ts oil spills

21. Tanker incidents by cause 1978-1Q07 Number incidents Source: Based on incident reports from Lloyd’s Maritime Information Service Oil pollution – 1000 ts 31% 10% 20% 27% 12% Erika Baltic Carrier Prestige Tasman Spirit Al Samidoon DBL 152 Bright Artemis

22. Tanker incidents by cause 2006 Source: Based on incident reports from Informa

23. Total losses, tankers and bulkers Source: Clarkson Number

24. Trends – Co2 emission, energy use, global trade Source: Fearnleys/INTERTANKO Index

25. World CO 2 emission

26. Shipping and the environment Fuelled by the dirtiest part of the barrel resulting in emissions of : SOx NOx un-combusted hydrocarbon Heavy metals Soot

27. Reducing harmful emissions from ships Onboard abatement technology –Scrubbers, filters, separators, catalysts SECAs/NECAs –Sulphur/Nitrogen Emission Control Areas Type and quality of fuel –Heavy fuel oil = a blending of refinery residues and distillate (up to 30% dist.) –Distillates = gasoil and diesel

28. Parties in the current regulatory and governance structures Paris MoU 1x2x3

29. Regulatory changes Accidents Political interference -driven Bureaucracy-drivenSelf-regulation UnlikelyMistrust of shipping

30. Ideal regulatory/governance system Global, simple, clear regulations created by competent people based on knowledge and analysis Strong, effective, regular controls by responsible bodies Port State - Control of last resort? Centralised comprehensive accident registration, investigation and analysis Transparency – obligation to report incidents

31. Tankers perform Tankers serve the major oil companies, which today are some of the most difficult clients in the world to satisfy, and tanker owners are under a great deal of pressure from the authorities. Zero tolerance for oil spills