1. Leading the way; making a difference Sustainability of the Oil Transportation Industry China Oil Transportation Safety Conference Nanjing September 2012 Tim Wilkins Regional Manager Asia-Pacific INTERTANKO International Association of Independent Tanker Owners

2. Leading the way; making a difference INTERTANKO INTERTANKO is a non-governmental organization established in 1970 to represent the interests of independent tanker operators at the international, regional, national and local levels Staff of 21 with offices in London, Oslo, Washington, Singapore and Brussels NGO status at the International Maritime Organization (IMO) and the International Oil Spill Compensation Fund. Consultative status at the United Nations Conference on Trade and Development.

3. Leading the way; making a difference MISSION Provide Leadership to the Tanker Industry in serving the World with the SAFE, ENVIRONMENTALLY SOUND and EFFICIENT seaborne transportation of oil, gas and chemical products INTERTANKO

4. Leading the way; making a difference MEMBERSHIP is open to independent tanker owners and operators of oil and chemical tankers (i.e. non-oil companies and non-state controlled tanker owners) who meet the membership criteria. ASSOCIATE MEMBERSHIP is available to any entity with an interest in the shipping of oil and chemicals. INTERTANKO

5. Leading the way; making a difference 250+ Members 3,300+ Tankers 285+ Million DWT Members in 40+ countries MORE THAN 75 % OF THE INDEPENDENT TANKER FLEET 300+ Associate Members INTERTANKO

6. Leading the way; making a difference Economics Profit & loss Cost saving Terms and conditions Trade growth Safety and environment Oil pollution GHG emission ANNEX VI Ballast water World society Free market and trade Economy and welfare Rules and regulations Law and politics Sustainable Sustainability - the balancing acts Free competition/ Fair trade Administering Natural resources Stewardship Profitability & efficiency versus safety and pollution prevention

7. Leading the way; making a difference 1. 1.Sustainable Industry i. i.Tanker demand ii. ii.Tanker supply 2. 2.Sustainable Performance i. i.Safety & Environment INTERTANKO Political Socio- Cultural Environmental Technological Economic Sustainability of the Oil Transportation Industry

8. Leading the way; making a difference 1.Sustainable Industry i.Tanker demand ii.Tanker supply

9. Leading the way; making a difference % growth World GDP. Oil demand and seaborne trade growth

10. Leading the way; making a difference mbd Oil production and seaborne trade growth bn tonne-miles Source: Fearnleys/ Platou

11. Leading the way; making a difference mbd Source: INTERTANKO/IEA Other Asia:0.24 L America:0.17 Africa:0.16 FSU0.13 Mexico/Canada-0.22 Europe-0.33 Middle East0.21 USA-0.01 China0.36 Others:0.06 Total0.77 Main Changes: Area mbd World increase in oil demand: China, ME, USA & ROW

12. Leading the way; making a difference mbd Oil import to selected areas

13. Leading the way; making a difference mbd 27.3% 16.5% 31,8% 8.5% 7.3% 4.8% 3.8% Oil price and freight rate

14. Leading the way; making a difference Tanker demand Arab light oil price 1990-2004$20.0 per barrel 2005-2012$73.0 per barrel now$110.0 per barrel Energy efficiency measures accelerated Oil is in the process of losing its almost total domination as a transportation fuel The US oil import the lowest since 1998 China’s growth rate curbed Still – positive growth and Increased dependency on the Middle East

15. Leading the way; making a difference 1.Sustainable Industry i.Tanker demand ii.Tanker supply

16. Leading the way; making a difference Tanker trends – fleet, VLCC price, oil demand and tonne-mile indices

17. Leading the way; making a difference m dwtnumber Projected Tanker Fleet Development 1992-2013

18. Leading the way; making a difference Tanker deliveries and removals m dwt

19. Leading the way; making a difference Tanker phase out, deliveries, scrapping tankers 10,000 dwt + balance(surplus) assuming various demand increases m dwt

20. Leading the way; making a difference 2.Sustainable Performance i.Safety & Environment

21. Leading the way; making a difference Number spills above 700 tonnes Source: INTERTANKO/ITOPF Number 1980s 9.3 1970s 25.2 1990s 7.8 2000s 3.3 Safety and Environment 2010-2011 2.5

22. Leading the way; making a difference Accidental oil pollution into the sea spills per tonne-miles 1970-2011 Source: INTERTANKO/ITOPF Tonnes spilt per bn tonne miles oil transportation Safety and Environment

23. Leading the way; making a difference Tanker incidents by cause 1978-2012 Number incidents Source: Based on incidents reports from Informa superposed with ITOPF statistics Safety and Environment

24. Leading the way; making a difference Safety and Environment Environmental performance Ballast Water Management Achieving compliance with discharge standards Air Emission Reductions Global switch to cleaner fuels Greenhouse Gas Emission Reductions SEEMP and EEDI: exceeding CO2 target emissions Slow steaming...?

25. Leading the way; making a difference Historical VLCC hire and bunker costs

26. Leading the way; making a difference 1. 1.Sustainable Industry i. i.Tanker demand ii. ii.Tanker supply 2. 2.Sustainable Performance i. i.Safety & Environment INTERTANKO Political Socio- Cultural Environmental Technological Economic Sustainability of the Oil Transportation Industry The industry is sustainable and has demonstrated this, but for how much longer will it remain so?

27. Leading the way; making a difference It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money — that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot — it can’t be done. The Common Law of Business Balance John Ruskin (1819-1900) thank you intertanko.com