1. LATIN AMERICAN PANEL PANAMA 8-9 February 2007 Peter M. Swift

2. ISSUES OVERVIEW AGENDA: Fleet developments - Oil and Chemical fleets - Incident record (2006) EU Issues - Ship Source Pollution Directive (Status report) - Maritime Safety Package III - Green paper on future maritime policy for the EU - EU Competition Rules US Issues - California Air Resources Board Air Emission Standards - Massachusetts lawsuit - Lawsuit on Ballast Water discharges Panama Canal Expansion & Toll increases Other issues - IACS Early Warning System - ISGOTT revision - Port State Control / EQUASIS data analysis - Human Element in Shipping Committee - INTERTANKO Databases and Benchmarking systems 2007 Annual Meeting and Tanker Event

3. Tanker fleet development m dwt No Assumptions for period until 2009: Scheduled phase out for the period: 15.5 m dwt including 4.2 m dwt that should already have been phased out earlier than 2007 Assumed removals 2007 – 2009: 29 m dwt (including conversion + other demolition)

4. Record ordering - despite high prices (mdwt)

5. Demolition: slowed in recent years (mdwt) 0 5 10 15 20 25 30 8485868788899091929394959697989900010203040506 Others/NK Bangladesh Pakistan India Taiwan Korea China

6. Average age steadily reducing (tankers above 10,000 dwt) Years 6 8 10 12 14 16 1970197319761979198219851988199119941997200020032006

7. Double-hull percentage rising steadily %

8. (Single Hull) Tanker Phase Out - an “uncertainty” post 2010 m dwt Assumptions : MARPOL phase out allows for trading until the age of 25 years old, max 2015 The EU alternative does not allow SH trading after 2010. DB/DS can trade until the age of 25 years old, but here cut off 2015 0 10 20 30 40 50 60 70 200320042005 2006 200720082009 2010 2011201220132014 2015 MARPOL (min phase out - trading of SH until 25 years) EU + no SH after 2010 OPA90

9. Chemical Carrier Fleet 70% of fleet double hull, almost all of remainder double bottom or double side – average age 11.5 years, Large order book (37% of existing fleet by dwt), Significant changes to MARPOL Annex II from Jan 2007, principally in carriage of veg oils – several uncertainties.

10. Chemical tanker fleet by hullnumber

11. Chemical tanker fleet and age distribution m dwt

12. Reclassification of Annex II products Type of changeReclassified from/toProducts and volumes Re-categorisation of vegoils, soft oils and fats D to IMO type 2, or IMO type 3 with DH meeting operational requirements Palm oil 27 m ts Soybean oil 10 m ts Sunflowerseed 3 m ts+ Other veg oils 3 m ts+ Tallow + fatty acids+ 2 m ts+ Total approximately 50 m ts Other products with no previous requirements on ship type IBC ch. 18 to IMO type 3Methanol 17 m ts MTBE 5.5 m ts UAN 5 m ts MEG/TEG/DEG 5 m ts Methyl ethyl ketone, ethyl acetate 1 m ts Change of ship type requirements IMO type 3 to type 2Xylenes >5 m ts Acrylonitrile <1 m ts No requirementsNo changeMolasses 5 m ts Ethanol 3 m ts

13. Major exporters of vegetable oils m ts

14. Further information available at www.intertanko.com November 2006 The Revisions to MARPOL Annex II (entry into force 1/1/2007) A Practical Guide

15. Changes in the pipeline Chemical Carriers: Proposals from the Inter-industry Group to amend SOLAS to provide for the application of inert gas to new oil tankers of less than 20,000 DWT and to new chemical tankers. Review of Dangerous Cargo Endorsements through STW.

16. Accidental oil spill from tankers and tanker trade m ts m bn tonne miles

17. Reported tanker incidents reducing – until 2005/6 !! Number

18. Tanker incidents 2006 by type

19. EU Issues Ship Source Pollution Directive (Status report) Maritime Safety Package III Green paper on future maritime policy for the EU EU Competition Rules

20. Maritime Safety Package III Revision of Port State Control Directive Vessel Traffic Monitoring Directive Athens Convention + extension Accident Investigation Directive Civil Liability / Financial Guarantees Flag State Audit / Related Issues Revision of Classification Society Directive

21. EU Issues Ship Source Pollution Directive (Status report) Maritime Safety Package III Green paper on future maritime policy for the EU (Maritime space/ocean interests) EU Competition Rules

22. US Issues California Air Resources Board Air Emission Standards Massachusetts lawsuit Lawsuit on Ballast Water discharges

23. Panama Canal Expansion Project details Referendum 22 October 2006 (78% yes) 7 years to complete (completion 2014 for the Centennial of the PC opening) New Dimensions for third lane: 49 metres (160 ft) Beam 366 metres (1,200 ft) LOA 15 metres (50 ft) Draught Up to about 170,000 DWT (12,000 TEU)

24. Panama Canal Tolls current & proposed Current and future tariffs: Tankers Current: 5/2007:5/2008:5/2009: L: $2.96 $3.29 (+11%)$3.70 (+12.5%)$3.98 (+7.6%) B: $2.35 $2.61 (+11%)$2,94 (+12.6%)$3.18 (+7.5%) (based on 1st 10,000 PC/UMS net tonnage)

25. Panama Canal Tolls Proposals for increases over next 3 years Initial industry observations: Significantly higher than expected increases for next 3 years - with only 3 months notice. [Expected 3.5% real annual hike] Affects existing contracts and spot market Uncertainty/ weakens confidence over future business planning [Planned increases for post 2009?] Large upfront increases for doubtful (?) future benefits [Mostly capacity debottlenecking and extra 0.3-0.5 m. draft] Industry seeks gradual & predictable increases

26. Other Issues IACS Early Warning System Port State Control / EQUASIS data analysis ISGOTT revision Human Element in Shipping Committee INTERTANKO Databases and Benchmarking systems (TVD, TMSA, Op costs/performance, STS)

27. ISGOTT The International Safety Guide for Oil Tankers and Terminals Fifth Edition (2006) Principal changes are the recommendations covering: Operating procedures with the introduction of the ISM Code Operating procedures for Tank Cleaning – moving to “Inerted” or “Not Inerted”

28. Other Issues IACS Early Warning System Port State Control / EQUASIS data analysis ISGOTT revision Human Element in Shipping Committee (Initially Availability, Training and Compliance) INTERTANKO Databases and Benchmarking systems (TVD, TMSA, Op costs/performance, STS)

29. Annual Meeting & Tanker Event 2007 Houston ’07 March 25 Golf tournament Associate Members’ meeting 26-27 ExCom, Council 26-27 Tanker Event 28 Poseidon Challenge AGM 29 Tanker Chartering seminar

30. Annual Meeting & Tanker Event 2007 Monday 26 March Executive Committee Meeting Council Meeting Vetting Seminar Casual Dinner Focus Sessions - Technical Issues - Air emissions - Common Structural Rules - Chemicals & Biofuels - LNG Market

31. Annual Meeting & Tanker Event 2007 Tuesday 27 March Council meeting wrap-up Opening – Keynote speakers Tanker & Oil Market session Informal dinner

32. Annual Meeting & Tanker Event 2007 Wednesday 28 March Poseidon Challenge day Annual General Meeting Gala Dinner

33. Muchas Gracias For more information, please visit: www.intertanko.com www.shippingfacts.com www.maritimefoundation.com