API TANKER CONFERENCE NATURAL DISASTER RESPONSE AND RECOVERY IMPACTS OF HURRICANES KATRINA AND RITA ON THE TANKER OWNER JOSEPH ANGELO JUNE 27, 2006

CRUDE/PRODUCT SUPPLY LIGHTERING AFRAMAX TANKERS JONES ACT WAIVERS OSRO AVAILABILITY DEMURRAGE

KATRINA/RITA – A BLIP ON THE OIL PRICE TREND? $/bbl

CRUDE/PRODUCT SUPPLY US CONSUMES 25% OF WORLD OILUS CONSUMES 25% OF WORLD OIL GULF COAST HAS 47% OF US REFINING CAPACITYGULF COAST HAS 47% OF US REFINING CAPACITY AREA HAS 30% OF US CRUDE OIL PRODUCTIONAREA HAS 30% OF US CRUDE OIL PRODUCTION US GULF REGION IS DELIVERY POINT FOR 50% OF US CRUDE AND PRODUCT IMPORTSUS GULF REGION IS DELIVERY POINT FOR 50% OF US CRUDE AND PRODUCT IMPORTS

US CRUDE PRODUCTION Lost oil production

VLCC SPOT FIXTURES Source: H. Clarkson NUMBER

CRUDE FREIGHT RATES USD/day

US GASOLINE IMPORTS by 4 week averages – mb/d Mb/d

PRODUCT FREIGHT RATES USD/day

KATRINA EFFECTS ON OIL PRODUCTS REPORTED CRIPPLING OF 2MBD OF REFINING CAPACITYREPORTED CRIPPLING OF 2MBD OF REFINING CAPACITY CLEAN TANKER RATES FOR MEDIUM RANGE VESSELS BETWEEN EUROPE AND THE US ROSE FROM WS 250 TO WS 465CLEAN TANKER RATES FOR MEDIUM RANGE VESSELS BETWEEN EUROPE AND THE US ROSE FROM WS 250 TO WS 465 SOME SHIFT IN TRADE FROM DRY OBOs AND CRUDE CARRIERS TO CLEAN PRODUCTSSOME SHIFT IN TRADE FROM DRY OBOs AND CRUDE CARRIERS TO CLEAN PRODUCTS VENEZUELA SAID IT WOULD SEND FOUR ADDITIONAL SHIPMENTS OF GASOLINE IN SEPTEMBER, TOTALLY OVER 960,000 BARRELSVENEZUELA SAID IT WOULD SEND FOUR ADDITIONAL SHIPMENTS OF GASOLINE IN SEPTEMBER, TOTALLY OVER 960,000 BARRELS

GENERAL CONCLUSIONS ON SUPPLY NO MAJOR SHIPPING DISRUPTIONSNO MAJOR SHIPPING DISRUPTIONS EFFECT WAS GREATEST ON THE PRODUCT TANKERSEFFECT WAS GREATEST ON THE PRODUCT TANKERS SHOWED VULNERABILITY OF US OIL SUPPLY SYSTEMSHOWED VULNERABILITY OF US OIL SUPPLY SYSTEM STRETCHED ALREADY TIGHT OIL MARKET TO ITS LIMITSSTRETCHED ALREADY TIGHT OIL MARKET TO ITS LIMITS

LIGHTERING GREATER IMPACTS FROM RITAGREATER IMPACTS FROM RITA SOME 3 DAYS OF DELAYS OFFSHORE DUE TO RESIDUAL SWELL FROM KATRINASOME 3 DAYS OF DELAYS OFFSHORE DUE TO RESIDUAL SWELL FROM KATRINA RITA CAUSED POWER LOSS TO REFINERIES LOCATED IN PORT AUTHUR/BEAUMONT AND MISSISSIPPI RIVER AREASRITA CAUSED POWER LOSS TO REFINERIES LOCATED IN PORT AUTHUR/BEAUMONT AND MISSISSIPPI RIVER AREAS UP TO 3 WEEKS AWAITING DISCHARGE IN PORT AUTHURUP TO 3 WEEKS AWAITING DISCHARGE IN PORT AUTHUR

AFRAMAX IMPACT MAINLY ON MEXICO/VENEZUELA OIL SHIPMENTS TO US GULF COASTIMPACT MAINLY ON MEXICO/VENEZUELA OIL SHIPMENTS TO US GULF COAST REFINERY OUTAGES RESULTED IN REDUCED DEMANDREFINERY OUTAGES RESULTED IN REDUCED DEMAND MEXICAN CRUDE WAS SENT TO EUROPE AND ASIA IN VLCCS OR SUEZMAXMEXICAN CRUDE WAS SENT TO EUROPE AND ASIA IN VLCCS OR SUEZMAX HOWEVER, OVERALL BULLISH TANKER MARKET OFFSET NEGATIVE FACTORSHOWEVER, OVERALL BULLISH TANKER MARKET OFFSET NEGATIVE FACTORS

JONES ACT WAIVERS TWO SEPARATE PERIODS – ONE AFTER KATRINA, THE SECOND AFTER RITATWO SEPARATE PERIODS – ONE AFTER KATRINA, THE SECOND AFTER RITA BLANKET WAIVERS GRANTEDBLANKET WAIVERS GRANTED 5-6 CARGO SHIPMENTS - EACH WAIVER5-6 CARGO SHIPMENTS - EACH WAIVER NO DISPUTE WITH FIRST WAIVER – PIPELINES DOWNNO DISPUTE WITH FIRST WAIVER – PIPELINES DOWN US FLAG TANKERS AVAILABLE AFTER RITAUS FLAG TANKERS AVAILABLE AFTER RITA IRS RULING – WAIVER MOVEMENTS WERE NOT SUBJECT TO US TAXIRS RULING – WAIVER MOVEMENTS WERE NOT SUBJECT TO US TAX

OSRO AVAILABILITY AFTER KATRINA, OSRO ASSETS MOVED TO AREA FOR SPILL/RESPONSE INCIDENTSAFTER KATRINA, OSRO ASSETS MOVED TO AREA FOR SPILL/RESPONSE INCIDENTS IMPACT ON AMPD AND MMPD COVERAGEIMPACT ON AMPD AND MMPD COVERAGE MSRC AND NRC TOOK LEADMSRC AND NRC TOOK LEAD MMPD SOLVED WITH CG “BLESSING” THAT LOCATION OF ASSETS MET RESPONSE TIMEMMPD SOLVED WITH CG “BLESSING” THAT LOCATION OF ASSETS MET RESPONSE TIME AMPD COVERAGE WAS “SOLVED” WITH LOCATION OF NRC OSV IN THE AREAAMPD COVERAGE WAS “SOLVED” WITH LOCATION OF NRC OSV IN THE AREA

DEMURRAGE WEATHER RELATED HURRICANE DELAYSWEATHER RELATED HURRICANE DELAYS - NO MAJOR DISPUTES - HALF LAY TIME CONSEQUENTIAL DELAYS AFTER HURRICANE PASSEDCONSEQUENTIAL DELAYS AFTER HURRICANE PASSED - TERMINALS NOT FULLY OPERATIONAL - CHARTERERS SEEKING HALF LAY TIME - OWNERS DISPUTE

CONCLUSIONS NO MAJOR SHIPPING DISRUPTIONSNO MAJOR SHIPPING DISRUPTIONS MINOR IMPACTS RELATED TO:MINOR IMPACTS RELATED TO: - WAITING TIMES TO DISCHARGE - TEMPORARY INCREASE IN RATES - JONES ACT WAIVERS - CONCERN WITH MMPD/AMPD COVERAGE - RESOLVING DEMURRAGE DISPUTES