INTERTANKO Asian Panel Meeting

Singapore 11th April 2011

Anti-Trust/Competition Law Compliance Statement

INTERTANKOs policy is to be firmly committed to maintaining a fair and competitive environment in the world tanker trade, and to adhering to all applicable laws which regulate INTERTANKOs and its members activities in these markets. These laws include the anti-trust/competition laws which the United States, the European Union and many nations of the world have adopted to preserve the free enterprise system, promote competition and protect the public from monopolistic and other restrictive trade practices. INTERTANKOs activities will be conducted in compliance with its Antitrust/Competition Law Guidelines.

Vetting Issues Update

Smart Vetting 1
Vetting Committee objectives & updates:
The One Stop Shop Concept / Terminal Acceptance: We have raised the concept of formation of a common marine assurance system (not methodology), which would be accessible and useable by each party concerned in the screening process. Advising of Non Acceptance: We have raised the issue regarding provision of information to owners to enable them to address what may be identified as outstanding in a prompt manner. Conditions of Class: - Transparency to report or not to report? Major survey of members 53% response validating concerns (submitted to OCIMF GPC discussions)

Smart Vetting 2
Vetting Committee objectives & updates:
Reward Systems to Reduce Inspections: Exploration of establishing further reward systems to benefit good owners. Linking TMSA and the VIQ: Gap analysis undertaken by the vetting committee: Potential benefits from linking TMSA with the VIQ could result in a further shift to more self assessment. SIRE/CDI HVIQ: We have requested SIRE to re-assess the possibilities of harmonising the SIRE & CDI VIQ into a harmonised VIQ.

Smart Vetting 3
Vetting Committee objectives & updates:
Officer Matrix Requirements: SIRE and CDI have advised that they are planning to seek information from owners regarding officer training systems in their respective forthcoming revised VIQs Port State Use of SIRE & CDI reports: We are reviewing the development of systems to increase the current low usage of SIRE and CDI reports by the Port State Control Authorities (Reduce the number of inspections and better target sub-standard ship)

Smart Vetting 4
Vetting Committee objectives & updates:
INTERTANKO Guide for Engaging Independent Ship Inspectors: Raised with SIRE: Potential for greater usage of standard set of guidelines when engaging independent ship inspectors Reporting to Oil/Chemical Companies: We have investigated and provided information to members regarding advice pertaining to discoverability in association with reporting incidents to oil and chemical companies and we are in discussion with OCIMF on this subject

INTERTANKO Benchmarking and Databases

Terminal Vetting Database (TVD)

Quick recap... What Terminal Vetting Tankers are vetted but are sometimes asked to make fast to poor quality berths The vetting process works for ships, so why not for terminals? Why enhance safety at the terminals improve member efficiency by influencing terminals to fix problems maintain industry safety record Who Access to the system is controlled by INTERTANKO and was strictly limited to INTERTANKO Members and Associate Members As of 2010, access granted to all interested parties The Terminal Vetting Database is hosted by www.Q88.com in partnership with INTERTANKO Access is usually set up within one business day

Terminal Vetting Database (TVD) latest statistics

Stats for past 12 months: # reports submitted: 3843 # berths covered: 1792 # reports with low rating: 350 Question containing low ratings:
Condition Apron/Fenders/Dock Accessibility/Communication English Skills Safety Awareness Bollard condition Tug Performance/Condition Condition Chicksans/Hose Dock Lighting Pre-transfer Conference Emergency Preparedness Courtesy Surveyor Safety Awareness 82 76 67 60 59 44 42 42 40 37 31 29

TMSA related

TMSA 2 Gap Analysis Document

http://www.intertanko.com/templates/intertanko/issue.aspx?id=44647

TMSA 2 Benchmarking database

http://www.intertanko.com/templates/Page.aspx?id=46718

Guidance on Change management

http://www.intertanko.com/templates/intertanko/issue.aspx?id=41452

TMSA
Lost Time Indicating Frequency (LTIF) Total Recordable Case Frequency (TRCF)

Benchmarking Based on OCIMFs Marine Injury Reporting Guidelines: - LTI = (Fatalities, Permanent Total Disabilities, Permanent Partial Disabilities, Lost Workday Cases) - TRCF = LTI + lost workday cases + restricted work cases - LTIF (frequency) = LTIs x (1,000,000 / Exposure Hours) - TRCF (frequency) = TRC x (1,000,000/Exposure Hours) Data: - Covers 12-month rolling period
- Input data Confidential

TMSA LTIF AND TRCF

Lost Time Frequency
16 14 12 10 8 6 4 2 0 Entri s
20 18 16 14 12 10 8 6 4 2 0 Entri s

T. Rec. Case Frequency

LTIF Pool Average: 1.39 Entries below pool average: (65%)

TRCF Pool Average: 3.23 Entries below pool average: (68%)

TMSA CREW & OFFICER RETENTION

Crew and Officer Retention Rates formula is modeled upon the "Abelson adjusted turnover rate, modified by INTERTANKO to ensure that the output is a measure of the company percentage retention rate as opposed to a turnover rate.
% Retention Rate (RR) = 100 - [ ({S (UT + BT)} / AE) x 100 ]
S UT BT AE Total Number of terminations from what ever cause Unavoidable Terminations Beneficial Terminations The average number of employees working for the company (12 month rolling period).

TMSA CREW & OFFICER RETENTION

Crew Retention Rate (Average 93.6%)
100 90 80 70 60 50 40 30 20 10 0
100 90 80 70 60 50 40 30 20 10 0

Officer Retention Rate (Average 91.3%)

Entries

Entries

VIQ Benchmarking
Traffic Light System, incorporating either Red or Green, to indicate if the number of SIRE VIQ observations for your fleet are either above or below the number of SIRE VIQ observations for the collective of the INTERTANKO fleet.
Red = above INTERTANKO fleet average Green = below INTERTANKO fleet average

Fleet Average Deficiency: "Total number of deficiencies per SIRE VIQ chapter, divided by Total number of inspections 12 month rolling period Confidential http://www.intertanko.com/templates/intertanko/issue.aspx?id=4 7207

VIQ Benchmarking
(example output data)
SIRE Chapters Certification & Documentation Crew management Navigation Safety Management Pollution Prevention Structural Condition Cargo & Ballast System Petroleum Cargo & Ballast System Chemical Cargo & Ballast System Gas Mooring Communications Engine & Steering Compartments General Appearance & Condition Petroleum Chemical Gas
Intertanko Fleet Petroleum Average Intertanko Fleet Intertanko Fleet Chemical Average Gas Average

0.5 0.5 0.5 0.5 0.5 0.5 0.5

0.5 0.5 0.5 0.5 0.5 0.5

0.62 0.33 0.8 1.49 0.68 0.06 1.03 0

0.5 0.3 0.56 1.23 0.67 0.17 0 0.71 0 0.56 0.24 1.05 0.51

0.27 0.43 0.84 0.91 0.44 0.25 0 0 0.84 0.41 0.29 0.88 0.36

0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5

0 0.78 0.14 1.05 0.44

Confidential Accident Reporting Platform

CARP database provides a simple functionality allowing the quick & easy updating of accident data. Enable members to input their own incident data in a fully confidential basis whilst allowing INTERTANKO to use the information entered so that: Lessons can be learned and shared. Similar accidents prevented. Standardise accident data and categorisation. Standardise simple accident analysis, root cause, direct cause and corrective actions. Platform Now Available
http://www.intertanko.com/templates/Page.aspx?id=47899

VIFF and PSCIFF

Vetting Inspection Feedback Forms (VIFF)
meets SIRE Inspector Compliance Requirements Launched May 2010

PSC Inspection Feedback Form (PSCIFF)

meets IMO PSCO code of conduct guidelines Launched October 2010 Both provide a means of confidential feedback to INTERTANKO which can then be shared, confidentially, with SIRE or relevant Port State MoU

Environmental Issues

Environmental Issues 1.

GHGs - Ship Energy Efficiency Management Plan

Mandatory application after MEPC 62 (July 2011) Charterers already referencing SEEMP (IMT MESQAC)

2.

Biofouling
Voluntary Guidelines to be adopted MEPC 62

3.

Ballast Water Management

...!!

Environmental Issues Ballast water management

IMO Legislative Status

The BWM Convention will enter into force 12 months after ratification by 30 States, representing 35 per cent of world merchant shipping tonnage. Currently 27 countries representing 25.32% of world merchant shipping tonnage Implementation dates still important...

Environmental Issues Ballast water management Entry into force

Summary of implementation dates: Ship constructed before 2009
BW capacity 1500-5000m3 have treatment system from first intermediate or renewal survey after anniversary date in 2014 BW capacity less than 1500m3 and greater than 5000m3 have to have treatment system from first intermediate or renewal survey after anniversary date in 2016

Ship constructed in or after 2009

BW capacity less than 5000m3 shall have a treatment system installed at its second annual survey and no later than 31/12/2011

Ship constructed after 2009 but before 2012

and with a BW capacity greater than 5000m3 shall have a treatment system from first intermediate or renewal survey after anniversary date in 2016

Ship constructed in or after 2012

with a BW capacity of greater than 5000m3 shall be constructed with a BW treatment system

Environmental Issues Ballast water management The Challenges: Compliant systems for the Convention and regional legislation (i.e. USA - NY, CA x100 to x1000 beyond IMO)
Owner compliance with US or IMO standards

Installation of treatment systems on a large scale

IMO Review:
Installation realities capability of industry to install systems in time frame (2012-2016, ~50,000 ships) Contract realities how many owners planning to install systems (INTERTANKO member survey)

Sampling and testing what will happen after installation?

Environmental Issues Ballast Water Treatment

Concern expressed over treatment systems to meet 2012 deadline INTERTANKO Environmental Committee & ISTEC Questionnaire: 1. Policy who and how many systems? 2. Practicality installing and using BWT systems

INTERTANKO Ballast Water Treatment Systems Guide

Regional Issues

Regional Issues China Oil Pollution Regulations Regulations on the Prevention and Control of Ship-Induced Pollution of the Marine Environment Latest requirements effective 1st February 2011 Relating to discharge of ship and cargo generated wastes as well as the use of port reception facilities
Compulsory Discharge (as per European Directive no exemption?) Pollutant receiving certificate required before ship is allowed to clear port Administration:

Regional Issues China Oil Pollution Regulations Regulations on the Prevention and Control of Ship-Induced Pollution of the Marine Environment Administration:
Prior to Waste Discharge PRF / Ship Agreement PRF Obtain Permit of Operation from MSA

After Waste Discharge

PRF provides Ship with PRD signed by Master

Ship applies MSA PRC using PRD

For International vessels, all waste to be discharged prior to port clearance and PRC from MSA shown to port authority

Regional Issues China Oil Pollution Regulations Regulations on the Prevention and Control of Ship-Induced Pollution of the Marine Environment INTERTANKO Observations and Queries
Does the ship operator have to gain a Pollution Receiving Certificate each time the ship leaves port or on a periodic basis (annually)? Does the contract have to be with one reception facility (contractor) or can it be more than one? What are the limits of fees? Is there a threshold at which compulsory discharge does not apply? e.g. if waste quantities minimal as per EU Directive?

Regional Issues Japan Earthquake and Tsunami

Precautions for vessels trading into Japan ports?

Information gathering on radiation levels Crew protection and precautions? Equipment required? Ship/port interface?

Inspections and analysis by ports after vessel has traded to a Japanese port?
Which ports? What level of radiation is being deemed abnormal?

thank you

For more information please visit www.intertanko.com tim.wilkins@intertanko.com

Tanker Market Overview

Tanker Market Oil price and freight rates 1970-2011

$ per barrel
100
eal price rab ight

inal freight rate

eal freight rate

eflated b the ns er rice nde * inde 19 2100

20

19 0

19 1

19 2

19 7

19 9

1970

1971

1972

1977

1979

1990

1991

1992

1997

1999

2000

2001

2002

2007

2009

2010

2011

197

197

197

197

197

199

199

199

199

199

200

200

200

200

200

19

19

19

19

19

 

inal price

 

rab ight -West

-West

Tanker Demand Increase in world oil demand

bn tonne-miles
. . . . . . . . - . - . - . - . - . - . - . est of world iddle ast ina World

Based on Fearnleys

Tanker Demand Tanker trade

bn tonne-miles
, , , , ,

+20%
,

+36%
, , ,

-38%

Based on Fearnleys

Tanker Demand Seaborne Oil Trade and Middle East Oil production
mbd 000 bn tonne-miles
000

00

Middle East Oil Prod mbd

00

Tonne m es
00

Asia 0% dependent on Middle East Europe % and US % some mbd crude oil through Hormuz 0 0
0 0 0 0 0 000

00

000 00 00 00 00

Based on Fearnleys/IEA

Tanker Supply Tanker fleet development

m dwt
5 5

number
00

Assumed max phase out, orderbook March 2009, include chemical tankers

57 0

dwt umber 37 51 0

3 3

5 0

32

3 20

275 2 3 5 7 2000 2001 2002 2003 2005 2007 2010 2011 2012 2013 200 200 200 200 1 1 1 1 1 1 1 1

3 300

Tanker fleet increase 2003-2013 some 75%

Tanker Supply
Tanker phase out, deliveries, scrapping tankers 10,000 dwt + balance assuming various demand increases
m dwt
95

Ma phase out 75 eletions elveries

35

15

Minus 2% growth in 2009 and the above scenarios later

ssumed removal o double hull tankers

02 03 04 05 06 07 08 09 10 11 12 13 14 15

25

year

55

Surplus zero trade grow th Surplus 2 5% trade grow th Surplus 4% trade grow th Surplus 6% trade grow th

ssumed market balance end 2008

 

 

thank you

For more information please visit www.intertanko.com tim.wilkins@intertanko.com