1. 76 th. ANDREW LAING LECTURE TANKER BUSINESS TODAY 1 May 2008 Peter M Swift, MD INTERTANKO

2. TANKER BUSINESS TODAY INTERTANKO Industry Today – Fleet & Performance Key Challenges

3. INTERTANKO Today 290 + members operating ca. 2950 ships > 80% of the independent oil tanker fleet and > 85% of the chemical carrier fleet 330 + associate members: in oil and chemical tanker related businesses 15 Committees – 5 Regional Panels Principal Offices – London and Oslo Representative Offices in US, Asia and Brussels Observer Status at IMO, IOPC, OECD and UNCTAD

4. INTERTANKO – The Voice of the Tanker Industry MISSION To provide leadership to the Tanker Industry in serving the world with safe, environmentally sound and efficient seaborne transportation of oil, gas and chemical products. VISION FOR THE TANKER INDUSTRY A responsible, sustainable, respected Tanker Industry, committed to continuous improvement and constructively influencing its future. ONE OF THE ASSOCIATIONS PRIMARY GOALS Lead the continuous improvement of the Tanker Industrys performance in striving to achieve the goals of: Zero fatalities, Zero pollution, Zero detentions

5. SHIP OWNEROIL COMPANYSPOKESMAN The Rogues of the Oil Tanker Industry

6. The image ? Perception or Reality

7. Global dependence on oil tanker transportation World Oil Consumption 3.8 billion ts Transported by sea 2.4 billion ts > 60% transported by sea

8. The Tanker Industry Today Tanker Industrys Goals: aligned to those of the IMO Safe and secure Environmentally responsible Reliable Efficient (Low cost)

9. Tanker Industry is accustomed to being under the spotlight Watched by: Regulators Politicians Public Licences to trade rigorously applied by: Flag states Classification Societies Insurers Charterers Monitored by: Coastal and Port states

10. Investment in New Tonnage - Move to Double Hulls More than USD 500 billion invested since 2000 with the result that ~95% of tanker fleet double hulled in 2010 Assumed all SH tankers phased out by 2010

11. Tanker fleet development m dwt number

12. Average age tankers above 10,000 dwt (1970-2007) Years 6 8 10 12 14 16 1970197319761979198219851988199119941997200020032006

13. Future for Single Hulls Options today Conversion to - DH Tanker - FSU/FPSO - Bulk Carrier Recycling Continued Trading Subject to (i) Flag state and (ii) Coastal state acceptability after 2010 But now uncertainty over -Korea -Japan -China -India -Others

14. 2007 Oil imports - single/double hull 000 dwt Source: Fearnleys

15. Tanker incidents 2007 by type and accidental pollution 1000 ts oil pollutionNo. incidents Source: INTERTANKO/LMIU/ITOPF/various

16. Accidental oil pollution into the sea Source: ITOPF/Fearnleys 1000 ts spilt bntonne-m -45% -33% -82% Reduction per tonne miles

17. Reported tanker incidents Number Source: INTERTANKO/LMIU/various

18. Tanker incidents 2007 by type Source: INTERTANKO/LMIU/various

19. Tanker incidents 2007 by age Incidents/no tankers: 325 incidents 13% 21% 33%

20. Tanker incidents: engine related No Source: INTERTANKO/LMIU/various 0102030405060 2002 2003 2004 2005 2006 2007 1970s 1980s 1990s 2000s NK Built: 2007 incidents by % of fleet per decade of build:

21. INTERTANKOS Poseidon Challenge encourages all parties to commit to: - continuous improvement - working with all partners

22. Key challenges for tanker industry - not unique to the sector Maintain an international framework of consistent, high standards Deliver best environmental performance Ensure availability of good people and quality ships

23. Regulation vs. Self Regulation Acting in parallel ! Promoting self-regulation Adopting best practices Producing industry guidelines Developing programmes, procedures, etc. Support effective regulations

24. Effective Regulation Developed at the global level, wherever appropriate (consistent with existing law) Fit for purpose (provides solutions) Properly considered (stakeholders involved) Impact(s) fully assessed (economic and social) If adopted, implemented uniformly and promptly

25. Upholding International Regulation and customary international law Supporting IMO with active participation Encouraging ratification of IMO (and ILO) Conventions Also engaged in US (Washington), Europe (Brussels) and elsewhere

26. Acting together - examples Pilotage in international straits as per IMO recommendations Development of a Marine Electronic Highway Establishment of a lifeboat user group with manufacturers to seek remedies for shortcomings Campaign to ensure availability of safety-related information on the characteristics of dangerous cargoes Development of Incident Information exchanges Development of guidelines on tanker maintenance and repair procedures

27. Consistency in International Standards - examples FLAGS Administrations - IMO Member State Audit scheme plus transparency in findings Development of Common Structural Rules for Tankers Tripartite dialogue between international shipbuilders, classification societies and shipowners Harmonisation uniformity in procedures across Port State Control regimes

28. Tanker Industrys Environmental Agenda - Highlights Anti-fouling Systems Ballast Water Management Biofouling Ship Recycling Port Reception Facilities Waste Management Marine Noise Pollution Whale Strikes Spill Prevention and Response Planning VOC reductions Atmospheric Pollution - Revision of MARPOL Annex VI Green House Gas Emissions Environmental Benchmarking

29. Green House Gas Emissions - issues Reduction options Technical and commercial feasibility assessments Carbon (CO2) indexing Design Index (New); Operational Index (existing) Market Mechanisms (Economic Instruments) Emissions Trading, Carbon Levy (Fuel tax), Incentive Schemes Research New and existing ships, energy saving; hull, machinery One litre of fuel on a modern VLCC (Very Large Crude Carrier) moving one tonne of cargo more than 2,500 kilometres - more than twice as far as 20 years ago

30. Environmental Benchmarking Establishing our Environmental Credentials Examples Pollution to ocean – cargo, bunkers, lubes, etc. Pollution to atmosphere – VOCs, bunker management Management of wastes – including Annex V Ballast water management Antifouling usage Biofouling management Recyclability – Green Passport, HM List Noise pollution CO2 performance

31. The People Challenge Availability and Quality Issues But a guiding principle: Human Resources are respected as an asset, not treated as a cost !

32. The People Challenges - recruitment, training and retention Raising awareness (www.maritimefoundation.com)www.maritimefoundation.com Co-operation with educators/trainers Policies for cadet berths and training facilities on all new ships Developing industry standards for Tanker Officer Training, (TOTS), covering proficiency and experience Caring for crews welfare and well-being

33. Our crews welfare and well-being Speaking out against unjustified criminalisation Campaigning for improved conditions for shore access when security constraints active Working to reduce multiple and overlapping inspections Promoting solutions to lessen technical and operational burden of equipment, systems and associated paperwork Prepared guidelines for safe handling of cargoes and fuels, tank cleaning and entry, and more Developed guidelines on implementing ILO Convention on work and rest hours Promoting higher standards of accommodation as industry norms; (including e.g. broadband, etc.)

34. Tanker Industry Today Proud of our people, proud of our ships Proud of our performance – but not complacent !

35. THANK YOU Proud of our people, Proud of our ships For more information, please visit: www.intertanko.com www.poseidonchallenge.com www.shippingfacts.com www.maritimefoundation.com

36. Tanker phase out, deliveries, scrapping tankers 5,000 dwt+ assuming various demand increases m dwt