Effective Risk Management

INTERTANKO Tokyo
May 15, 2009

Charles W. Parks
Vice President - Marine
Tesoro Corporation

The Tesoro System

Kenai, Alaska
72 mbpd
Key product: Jet

Tesoro System Highlights

Martinez, Ca
166 mbpd
Key products:
CARB Gasoline &
CARB Diesel

Los Angeles, Ca
97 mbpd
Key products: CARB
Gasoline & CARB Diesel

7 Refineries
664 mbpd total crude capacity
Retail network of over 870 sites
5,600 Employees

Anacortes, Wa
120 mbpd
Key product:
Gasoline

Salt Lake City, Utah

58 mbpd
Key products:
Gasoline & Diesel

Calgary
Office
Auburn Office
Kapolei, Hawaii
93 mbpd
Key product: Jet

Long
Beach
Office

Corporate Office

RETAIL BRANDS
Singapore
Office

Mandan, ND
58 mbpd
Key products:
Gasoline & Diesel

Tesoro Today

2008
Fortune 150

# 91

Global 500

# 388

Revenues

$ 28 billion

Operating Income

$ 471 million

Refining & Marketing

100%

Tesoro Marine 2008 Statistics

# of cargo transfers

4,400

Total barrels moved

315 million

Vessels vetted

740

Rejection rate

4.1%

Poor SIRE reports

Past experience with vessel/owner

Inadequate mooring system

Spills
Volume spilled

3
Trace

Tesoro Time Chartered Fleet

2 Suezmax

3 Aframax

5 MRs

10 Barges (U.S. West Coast & Hawaii)

- All are double hull -

Vetting Importance
Protection of people
Protection of the environment
Financial exposure
Business disruption
Our relationship with stakeholders
Our reputation as a publicly owned company
In Alaska we are the oil spill plan holder

Vetting Importance
We dont think we know how to operate your
tankers better than you do,
BUT,
Not all tankers are the same
Not all crews are the same
Not all operators/managers are the same

Not all owners are the same

Vetting Infrastructure

Two tiered vetting system

Corporate level
Local level

Experienced mariners
Captain Tim Plummer Head of Operations & Vetting
Vetting Superintendent based at Tesoro headquarters
(Captain Debra Cobb)
Tesoro Marine Superintendent at each waterborne refinery
location

Tesoro Assessment & Ship Clearance (TASC) system

Centralized data capture
Links to SIRE, Q88, LMIU, industry databases

Vessel performance feedback

OCIMF member and SIRE submitting participant

Vetting Process
Vetting requests are submitted in TASC
Detailed review of:
Tesoro Vessel Questionnaire - owners submit questionnaires via
Q-88 (www.Q88.com)
Lloyds MIU
SIRE

U.S. Coast Guard PSIX

Equasis & Tokyo MOU
Internal Facility Feedback & Facility specific acceptability
Draft, mooring, KTM, DWT, LOA, Beam, etc.

Vetting Process
Facility specific recommendation is made to approve
or reject
Final determination to approve or reject is made and

sent to requestor

General Criteria
Key criteria in Tesoro system
Hawaii SPM (official dwt, BMA, draft)

Alaska (draft, cargo volume, mooring)

Puget Sound (dwt)
San Francisco (draft, KTM)

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Summary

We really dont think we know how to

operate your tankers better than you do,
but we have a lot on the line as well.

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