1. Tanker performance and Annex VI compliance Erik.Ranheim@INTERTANKO.com Manager Research and Projects St. Petersburg 25 November 2008 Vostoc Capital’s The 2nd Annual Fuel trading and Bunkering Conference

2. INTERTANKO Trade Association for tanker owners 260 members, 40 countries, 2500 tankers, 300 Associate Members ONTERTANK office 25 persons Representation – IMO, Brussels Washington Information advisory service Meeting place Oslo – London - Washington - Singapore

3. Tanker performance Safety Incidents Pollution Age Hull Emissions/Annex VI

4. Tanker incidents by cause 1978-2006 Number incidents Source: Based on incident reports from Informa

5. Tanker incidents by cause 2006 Source: Based on incident reports from Informa

6. Tanker incidents by size 2006 Jan-Nov 236 Source: Based on incident reports from Informa

7. Tanker incidents by age 2006 Jan-Nov 236 Source: Based on incident reports from Informa

8. Typical tanker incident Source: Based on incident reports from Informa GITTA KOSAN (Isle of Man) London, Nov 4 -- Following received from Stavanger RCC, timed 0000, UTC: Liquid Petroleum Gas Carrier Gitta Kosan (4086 gt, built 1990), in ballast, drifting due to engine problems about 30 miles south of Stavanger. Salvage tug Kaliningradets about five miles from the casualty. Gitta Kosan, Class: Bureau Veritas, 4811 Dwt, IMO No: 8817693, P+I Club:Unknown, Contact: TESMA I.O.M. Ltd, Douglas, Isle of Man, phone 44-1624- 664095, fax 44-1624-664096, Contact: J. Lauritzen A/S, Copenhagen, Denmark, phone 45--33968000, fax 45--33968001)

9. Tanker incidents 2006 Mainly minor without fatalties, pollution serious damage to property 40% port (or port entrance) related 14/236 pollution (mainly very small incidents) Solar 1, cargo 2000 ts of “industrial fuel”, sunk, the Philippines' “worst-ever” oil spill may have been holed by another vessel while illegally off-loading at sea HFO 10 time worse than most crude oils

10. Tanker accidents and trade Source: ITOPF/Fearnleys 1000 ts spilt Bn tonne-miles trade

11. Accidental oil pollution from tankers and tanker trade Source: ITOPF/Fearnleys/INTERTANKO 1000 bn tonne-miles 1000 ts 99.99997% of the oil transported by tankers arrived safely in 1986- 2005, when also including operational pollution Source: ITOPF/Fearnleys/INTERTANKO

12. Accidental pollution from tankers largest accidents Source: ITOPF 1000 ts spilt 4 spills>220,000 ts 6 spills100-144,000 ts 11 spills 50-100,000 ts

13. Largest tankers pollution accidents

14. Accidental pollution from tankers largest accidents and age Source: Informa/INTERTANKO Number incidentsAverage age

15. Accidental pollution from tankers largest accidents and age Source: ITOPF/INTERTANKO Oil pollution – 1000 tsAverage age

16. Total losses, tankers and bulkers Source: Clarkson Number

17. Tanker phase out SH tankers above 5,000 dwt - m dwt Source: INTERTANKO m dwt

18. Phase out SH tankers 5-29,999 dwt Source: INTERTANKO Number

19. Phase out SH tankers 200,000 dwt + Source: INTERTANKO Number ** SH tankers can trade to LOOP and dedicated lightering areas until 2015

20. Tanker fleet by hull Source: INTERTANKO %

21. MARPOL Annex VI Air emissions from Ships

22. MARPOL Annex VI Air emissions from Ships Sulphur cap of 4.5%+ Sulphur Emission Control Areas – SECAs - Baltic 19 May 2006 – North Sea November 2007, + Adriatic, US Gulf, Hong Kong area??? MEPC 53 (July 2005) – Decided Annex VI be revised Intersessional Meeting (November 13-17 2006) – discussion of key issues and draft proposals MEPC 56 (July 2007) & MEPC 57 (March 2008) - consider and approve(?) the revised texts Target date for revision Entry in to Force: 2010 Annex VI as from 19 May 2005

23. MARPOL Annex VI Air emissions from Ships Ensure a solid platform of requirements Be realistic and feasible Seek a long term and positive reduction of air emissions from ships Contribute to a long term and a predictable regulatory regime provide engine manufacturers with the ability to design new engines that could sensibly meet stricter regulations Principles for an INTERTANKO position: 100+ refineries to adapt or 50,000 ships?

24. MARPOL ANNEX VI - emissions Higher fuel costs but: Less fuel consumption Less emissions Cleaner emissions Less sludge No wastes from scrubbers or cleaning Reduced engine maintenance Improved safety Requirements for reduced emissions 1 solution: Cleaner fuels (distillates?):

25. Marine bunkers 215 m ts marine bunker per year 10% to 15% are MDO or MGO, rest 85-90% blends: between 40/60 or 50/50 distillates/resides, i.e. total increase in demand of distillate fuels will be not more than some 50% of the total amount of marine fuels used which means: some 7% in crease in distillate demand if ships change to 100% MDO* (or less as consumption will be reduced) World Petroleum Product mbd year 2005 (BP) m ts/ year Light distillates25.31,090 Middle distillates29.61,436 Fuel oil10.2552 Others17.4758 Total world82.63,837

26. MARPOL ANNEX VI Shipping NOT incinerator for refiners Most important move since ships changed from coal to oil 1.5% sulphur content is obtainable Engine manufacturers; technically workable Reduce human error and safety problems Corporate responsibility and a precautionary approach to challenges comments to INTERTANKO intiative Director Marine Environment division at the IMO comments to INTERTANKO intiative:

27. Gasoline price at the pump

28. Conclusion Safe Environmentally friendly Young Phasing out according to schedule Demanding clients INTERTANKO meets challenges, but Tankers : Speech available on: http://www.intertanko.com No time for complacency