1. TANKER Seminar 2004 • Istanbul • 31 May 2004 • Peter M. Swift

2. TANKER SEMINAR 2004 • INTERTANKO Today • Tanker industry – performance and structure • Issues and challenges • Managing the issues • Challenges ahead

3. INTERTANKO today:Vision for the tanker shipping industry:“ A responsible, sustainable and respected industry able to influence its own destiny.”

4. representing responsible oil and chemical tanker owners worldwide • promoting Safer Ships, Cleaner Seas and Free Competition • strict membership criteria based on quality and performance

5. The International Association of Independent Tanker OwnersINTERTANKO • 14 Committees - 4 Regional Panels • Safety & Environment • Technical – incldg. Bunkers, IT • Chemicals, Short Sea, Offshore • Legal, Insurance, Documentary • Vetting, WorldScale • Communications and Public Relations • Publications – Industry Guidelines • Services and advice • www.intertanko.com

6. 230 (+/-) Members 2,200 (+/-) tankers 165 million dwt Average age: 11.8 years 280 (+/-) Associate Members 25 Staff / 8 Consultants The International Association of Independent Tanker OwnersINTERTANKO Oslo London Singapore Washington

7. TANKER SEMINAR 2004 • INTERTANKO Today • Tanker industry – performance and structure • Issues and challenges • Managing the issues • Challenges ahead

8. Increased tanker demand – with extra emphasis on quality Accelerated introduction of new ships Proactive industry on standards and environmental measures Volatile but profitable markets Awakening investor interest 2003 in review

9. Tanker Performance

10. US CIF oil price* - USD • *Costs of oil transported from the Persian Gulf to LOOP

11. Accidental oil spills from tankers1970-2003

12. Accidental pollution from tankers • 1,000 ts

13. Oil into the Sea • Annual Releases, best estimates

14. Tanker incidents1978-03 Number Source: LMIS, Informa, press, INTERTANKO

15. Tanker incidents 2003 - 130

16. Fleet by hull • percentage

17. Continuous improvement - both in safety and environmental performance But not complacent…………….. In a world of “near zero tolerance” for any tanker accident Tanker record

18. Tanker Industry & Market Fundamentals

19. Frontline 15.1 m dwt 62 tankers Teekay 9.7 m dwt 88 ” (13 on order) Mitsui OSK 9.7 m dwt 62 ” (15 " ) World-Wide 7.3 m dwt 28 ” ( 2 " ) Kristen 5.5 m dwt 25 ” ( 3 " ) Genmar 5.1 m dwt 42 ” Tsakos Group 4.9 m dwt 40 ” (15 " ) Dynacom 4.8 m dwt 30 ” (11 " ) AP Møller 3.8 m dwt 31 ” (18 " ) Thenamaris 3.1 m dwt 31 ” ( 8 " ) OMI 2.6 m dwt 33 DS-Schiffahrt 2.3 m dwt 24 ” Stelmar 2.1 m dwt 36 ” ( 5 " ) BP 1.7 m dwt 24 ” (24 " ) Brostrøm 1.4 m dwt 49 ” (18 " ) • Growth in leading operators – • Preference of charterers ?

20. Major oil company fleets

21. Accelerated phase-out Further sales for demolition Increased contracting of new tonnage New entrants (e.g. Chinese interests) Active shipbuilding programme may dampen tanker fleet expansion USD 100 billion invested in oil tankers since 1995 • Tanker supply

22. Tanker phase out - m dwt

23. Sales for decommissioning • m dwt

24. Tanker deliveries - number • number

25. Tanker deliveries, demolition, phase out • m dwt

26. OPEC increasing oil production FSU increasing oil production USA increasing imports / rebuilding strategic stocks CHINA flat domestic oil production, increased imports • Tanker demand

28. Billion tonne-miles created by the transportation of one mbd

29. Seaborne oil trade Source: Fearnleys

30. TANKER SEMINAR 2004 • INTERTANKO Today • Tanker industry – performance and structure • Issues and challenges • Managing the issues • Challenges ahead

31. International versus Regional legislation Maritime Regulatory Structures Liability and criminalisation Environmental concerns Security • Tanker Issues & Challenges

32. Security – MTSA vs. ISPS Liability – EU Penal Sanctions vs. International Conventions Safety & Environment – EU (Post Erika & Prestige) vs. IMO/Marpol & SOLAS Sulphur Levels – EU, USA vs. IMO EU + US Agendas ! Regional versus international developments

33. Are they working ? IMO Flag administrations Classification Societies Port State Control Others: P and I, commercial vetting Maritime Regulatory Structures

34. LIABILITY and CRIMINALISATIONIncreasingliabilities of shipowners & othersExtended criminalisationPenal Sanctionsled by politicians or by the public ?

36. Anti-Foulings (Convention – consistent standards) VOC Recovery (in port and at sea) Sulphur Levels (in Fuel) / Air emissions Ship Recycling (Voluntary vs. Regulatory) Water Ballast Management (Practical solutions) • Environmental Challenges

37. Visas (US and elsewhere) Seafarer identity cards ISPS deadline Non-compliant ports Security costs Other……………………… Links to Piracy and Armed Robbery ? Security Challenges

39. TANKER SEMINAR 2004 • INTERTANKO Today • Tanker industry – performance and structure • Issues and challenges • Managing the issues • Challenges ahead

40. PARTNERSHIP: Working closely with regulators and legislators Responsible parties working together...... SHIPOWNER CLASS SOCIETIES CHARTERER SHIPYARDS CARGO OWNER INSURERS PORTS & TERMINALS BANKS & INVESTORS FLAG STATES

41. Convention Ratification: AFS Convention (2001) Annex VI (Air Emissions) (1997) HNS Convention (1996) OPRC-HNS Protocol (2000) Bunkers Convention (2001) Places of Refuge Reception Facilities Port and infrastructure security The same commitment from politicians and regulators ?

42. CONVENTION : MARPOL Annex VI: Prevention of Air Pollution from Ships (Sept. 1997) RATIFIED BY : Bahamas, Bangladesh, Barbados, Denmark, Germany, Greece, Liberia, Marshall Islands, Norway, Panama, Singapore, Spain, Sweden, Vanuatu and now by Samoa • Annex VI – Success at last !

43. Places of Refuge A Solution Waiting to be Implemented Erika II Package – December 2000 Requires Each Member State to Draw up Emergency Plans for Hosting Ships in Distress in Places of Refuge

44. Summary: PSC is actively supported by industry More needs to be done to ensure harmonised standards Greater sharing of inspection records would be beneficial It is an imperative that the integrity of PSC is maintained Better targeting would result from additional analysis of PSC records Important lessons can be learned by analysing PSC performance Used as membership criteria by associations Used in assessments by charterers, insurers and others Support for EQUASIS • PSC – an industry perspective

45. Need to ensure: Harmonised standards and training of inspectors Better / more rational targeting Consistency in grounds for detention, naming of charterer, appeals procedure, etc. Development of rewards / incentives • PSC Operational Issues • – the shipowners’ perspective

46. Ideas to ensure integrity of system: Regular and open dialogue between responsible owners and PSC officials Development of ”best practices” within PSC regimes, e.g. With leadership from Paris MoU Appropriate mechansims for confidential feedback Reports back to IMO of PSC performance • Operational Issues in relation to PSC • – the shipowners’ perspective

47. Need to ensure integrity of system: ”Overly enthusiastic” inspectors ”Selective” targeting ”Soft option or easy” targeting ”Malpractice” - self interest or third party interest BUT Not all owners are ”guilt free” • PSC Operational Issues – the shipowners’ perspective

48. The ROUND TABLE of international shipping associations

49. Examples of Round Table cooperation: • Improved dialogue with IACS • Tripartite meetings of owners, builders and class • Flag State guidelines • Industry guidelines on Recycling • The “image” of shipping

50. Industry Leadership - Flag State Guidelines