1. INTERTANKO Market Seminar Hong Kong - 4 November 2002 Tim Huxley, Clarkson Hong Kong The Pros and Cons of Building Ships in China Giles Lane, Clarkson, Singapore The Prospects in the Tanker Market with Focus on Asia Erik Ranheim, INTERTANKO The State of the Industry

2. Japan's devastated banks On the agenda YUKOS’ OIL PRODUCTION UP 18.0% IN THE FIRST 9 MONTHS OF 2002 Mikhail Khodorkovsky Chairman and CEO YUKOS Oil Company

3. The state of the industry  S tatus  P erformance  M arket

4. The state of the industry Status  V ital to world economy  A nonymous  I mproved relations to other industry players

5. Accountable to Society

6. World largest companies $ bn market value

7. Largest charteres - cargo tonnes

8. Oil companies reducing fleets

9. A proficient oil transportation system means shared responsibility All market participants must focus on their main activity

10. Oil transportation=shared risk venture  C argo/ b unker properties  L iability for pollution  S afe port/ U nder K eel C larence  S ecurity  T raffic C ontrol S ystems/ P ilotage

11. Performance

12. Accidental oil pollution reduced by 78% 2 nd /1 st part 90s 99.998% of the oil arrives safely

13. No major spill since Erika

14. US oil spills into the sea - gallons

15. US oil spills into the sea - number

16. Continuous decline in tanker incidents

17. Tanker incident by cause 1978-2002

18. 132 tanker incidents 2001

19. Port State Control All ships versus tankers

20. Port State Control- detention ratio All ships versus tankers

21. Market

22. The state of the market  V olatile freight market, declining prices  T onnage balance relatively tight, high scrapping  F undametals uncertain

23. Tanker spot rate trends VLCC 280,000 dwt, AG-West until end Oct. It all depends on your perspective

24. Supply

25. Modernisation tankers

26. ERIKA I – Phase out

27. Tanker deliveries and deletions

28. Tanker recycling by receiver country

29. Demand

30. Crude oil seaborne trade - Indices

31. OPEC/non-OPEC crude oil production 1971-2002 (Proj.)

32. Europe

34. European crude oil imports - mbd

35. FSU oil exports

36. N Sea oil production, mbd

37. USA

39. US crude oil production and net crude oil imports 1983-2003 (est.), monthly Source: EIA

40. US Imports from Persian Gulf – mbd/%

41. Oil consumption in selected Asian countries

42. Seaborne chemical trades - mil tonnes Source: Drewry

43. Prospects

44. Morgan Stanley Capital Index 1990-2002

45. ..added uncertainty.... Cheney Report…US National Energy Policy..

46. Source: BMW WWWsite Oil - a Sunset Industry? The Future is Here Today ” P owered with S un and w ater The BMW 750hL, the youngest member of the BMW hydrogen vehicle family”

47. Source: Fearnleys, IEA, INTERTANKO Will the strong growth continue?

48. Medium term oil trade development  M ore short haul oil, FSU, W Africa, Mexico (-N Sea)  US oil production decline halted – long term up?  I ncrease in trade depend on Asia  O verall OECD oil demand flat  S hort-term, cheap capacity lies in the Middle East  IEA : The pace of economic activity is the single most important driver of energy demand, but Politicians may set a different scenario