1. Oil Shipping Today Peter M Swift January 2005 Propeller Club, London

2. Global primary energy consumption by fuel million tonnes oil equivalents Source: BP

3. World oil supply 1900-2005 mbd

4. Crude oil seaborne trade

5. Oil consumption per capita (Litres/day - 2003)

6. The world needs tankers

7. Tanker Fleet Ownership Source: SSY Consultancy & Research Ltd

8. AS AN INDUSTRY WE MAY NOT BE LOVED BUT WE ARE NEEDED World Oil Consumption 3.6 billion ts World Oil Consumption 3.6 billion ts Transported by sea 2.2 billion ts Transported by sea 2.2 billion ts 60% transported by sea. 60% transported by sea.

9. Regular supply critical

10. Daily VLCC spot rates

11. Source: INTERTANKO

12. Oil price and tanker freight rate 1970-2004

13. War in Palestine Korean War Suez Canal Zone Conflict Suez Canal Closure 1973 Oil Crisis Suez canal reopens Market Doldrums Kuwait 1990-1 Asian Financial Crisis

14. Source: E.A. Gibson Shipbrokers 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 95 96 97 99 2001 2002 2004 Years $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 $5.50 $6.00 Freight cost ($/bbl) $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 $55 $60 Crude oil price ($/bbl) FreightOil Price Freight and Oil Price Movement - 1950-2004 Suez Crisis '67 M E war '73 M E war OPEC price power Kuwait occupation After Erika

15. Gasoline price at the pump

16. Oil pollution into the sea Maritime sources

17. Torrey Canyon - Resulting in IOPFC Torrey Canyon Built 1959 in the USA. 60,000 dwt,, Li. Flagged Later jumboised to 120,000 dwt Owned by Union Oil Left Kuwait 19 February 1967 Cargo 120,000 ts of BP oil for Milford Haven Passed Scilly Isles 18 March 08.15 am Discovered plotting error at 08.40 am Re-plotted position 2.8 nm from the Seven Stones reef Course was changed too late Hits Pollard's Rock in the Seven Stones reef at 17 knots Rips open 6 tanks. 31,000,000 gallons of oil leaked Oil spread along the sea between England and France

18. Amoco Cadiz - 1978 - Resulting in Marpol PL/SBT, etc. The 1974 built Amoco Cadiz carrying 227,000 tonnes of crude oil ran aground off the small port of Portsall off the coast of Brittany, France at 10:00 p.m. on March 16, 1978. The whole cargo spilled out as the breakers spilt the vessel in two, progressively polluting 360 km of shoreline from Brest to Saint Brieuc. At the time this was the largest oil spill by tanker ever registered. The French Government along with damaged villages prosecuted the Amoco company in the United States. After 14 years of difficult proceedings they obtained 1,257 m Francs (190 m Euros), half the claimed amount.

19. Exxon Valdez - 1989 - Resulting in OPA 90 Left the Alyeska Pipeline Terminal at 9:12 p.m. on March 23,1989. Loaded with 1.264 m barrels of North Slope crude oil bound for Long Beach North Slope crude oil had safely transited Prince William Sound 8,700 times in the 12 years At 12:04 a.m on March 24, 1989 Exxon Valdez grounded on Bligh Reef Prince William Sound and 11 cargo tanks were punctured.. Some11 million gallons or 257,000 barrels or 38,800 metric tones was spilt. 200 miles of shore line were heavily or moderately oiled 1,100 miles were lightly/very lightly oiled. Exxon spent about $2.1 billion on the cleanup effort.

20. Nakhodka -1997 - Resulting in proposals to IMO, class and IOPFC * Built 1970, Ru. Flagged * Cargo of 19,000 ts of heavy oil * En-route from Shanghai, China to Petropavlovsk, Russia. * Stranded on the coast of Antou, Mikuni town, Fukui prefecture, Japan A total of 25.14 billion yen in compensation was paid to about 6,000 claimants

21. Erika – 1999 - Resulting in Marpol revisions and accelerated phase-out and first of the EU measures

22. Prestige – 2001 - Resulting in action by EU and later IMO on phase-out and more

23. New Carissa Grounded Coos Bay, Oregon in 1999 After several salvage attempts the ship’s bow broke away from the stern and was eventually sunk by naval gunfire and a torpedo.. A COURT SETTLEMENT was reached June 2004 in the New Carissa grounding case. The 44,527dwt wood chip carrier ran aground north of Coos Bay, Oregon state on 4 February 1999, spilling more than 200 ts of fuel oil. US District Judge Garr King ruled on Wednesday that the US government must pay the ship’s owner Green Atlas Shipping of Panama and its Japanese subsidiary Taiheiyo Kaiun, $4M because it was negligent in not making available the latest navigation guides for the area. In return, Green Atlas must pay $4M to cover environmental clean-up costs and $6.5M in respect of costs incurred during the US Coast Guard’s attempts to remove the vessel.

24. Selendang Ayu Grounded and broke in two outside the Island Unalaska Dec 2004 The container On December 7, the crew of the M/V Selendang Ayu reported that they had lost power and were adrift off Unalaska Island. Efforts to tow the vessel failed and it went aground and broke apart between Skan Bay and Spray Cape at approximately 6pm, December 8. The Selendang Ayu carried approximately 424,000 gallons of Intermediate Fuel Oil (IFO 380) and 18,000 gallons of Marine Diesel (PDF).

25. Principal Challenges for Oil Shipping Industry Today 1.Meeting society’s expectations - our licence to trade - regulation versus self-regulation

26. The world expects us to have 0 accidents. Even though 99.9997% of oil is delivered safely It takes only one accident to change the industry

27. The image ?

28. OWNER CHARTERERCLASS IMAGE PROBLEM ! The Rogues of the Tanker Industry

29. Principal Challenges for Oil Shipping Industry Today 2.Governance structure for the industry -International versus national/regional legislation

30. CHALLENGES TO INDUSTRY GOVERNANCE International vs. local, national and regional Liability – EU Penal Sanctions vs. International Conventions Safety & Environment – EU (Post Erika & Prestige) vs. IMO/Marpol & SOLAS Sulphur Levels / Air Emissions – EU, USA vs. IMO Security – MTSA vs. ISPS Ballast Water Management – US et al vs. IMO

31. Principal Challenges for Oil Shipping Industry Today 2.Governance structure for the industry -International versus national/regional legislation - Role of Flag States

32. Tanker Fleet by Flag Source: SSY Consultancy & Research Ltd

33. The good, the bad and … all legitimate

34. Flag State Guidelines - industry advice

35. Principal Challenges for Oil Shipping Industry Today 2.Governance structure for the industry -International versus national/regional legislation - Role of Flag States - Role of Classification Societies

36. Tripartite Dialogue on Newbuilding Standards IACS Joint Tanker Project Common Structural Rules 2005

37. Principal Challenges for Oil Shipping Industry Today 2.Governance structure for the industry -International versus national/regional legislation - Role of Flag States - Role of Classification Societies - Role of Coastal States

38. Principal Challenges for Oil Shipping Industry Today 3.Challenges to international Liability regimes, and the Increasing Criminalisation of Seafarers

39. Principal Challenges for Oil Shipping Industry Today 4.Environmental challenges: - inadequate reception facilities - ballast water management - air emissions (engine and cargo) - environmentally-sound recycling - and many more

40. Oil Shipping Today

41. Tanker incidents: 1978-03 Source: LMIS, Informa, press, INTERTANKO Number

42. Development of tanker oil spills Source: ITOPF. Number of spills above 700 tonnes.

43. Accidental oil pollution from tankers and tanker trade Source: ITOPF, Fearnleys 1000 bn tm m ts spilt

44. Port State Control Percentage of inspected ships detained

45. Fleet by hull percentage

46. “Oil should travel first class” - that is the aim of the oil shipping industry

47. Thank you www.intertanko.com www.shippingfacts.com