Tanker performance

Erik.Ranheim@INTERTANKO.com

Manager Research and Projects

Tanker performance

• High safety• Low pollution• Low age• High earnings

Tanker incidents by cause 1978-2006

Number incidents

0

200

400

600

800

1000War

Hull & Machinery

Fire/Expl

Grounded

Coll/Contact

Misc

Source: Based on incident reports from Informa

Tanker incidents by cause 2006

Source: Based on incident reports from Informa

19%33%

10%24%

15%

Collision

Grounding

Fire/Explosion

Hull &machineryMisc/unknown

Collision

Groundings

Hull & Machinery (total 47, 17 engine, 2 hull)

Miscellaneous

F & E

Reported tanker incidents Jan-Sep

2006 - total 200

Tanker accidents and trade

Source: ITOPF/Fearnleys

0

100

200

300

400

500

600 '000 Tonnes Trade in Tonne miles

Trade in Tonne-miles (Fearnleys)

Pollution rate 1000 ts spilt per bn tonne miles carried

Source: Fearnleys

0.000

0.005

0.010

0.015

0.020

0.025

0.030

0.035

1971-75 1975-80 1981-75 1986-90 1991-95 1996-00 2001-05 2006

Source: ITOPF spills, Fearnleys: Tonne miles

Accidental pollution from tankerslargest accidents

Source: ITOPF

0

100

200

300

400

500

600

1967

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

Independenta

Amoco Cadiz Castillo de Bellver

Exxon Valdez

Odyssey

ABT Summer

Erika

Erika

Prestige

Tasman Spirit

Atlantic Empress

Assimi

1000 ts spilt

Accidental pollution from tankerslargest accidents and age

Source: Informa/INTERTANKO

0

220

440

660

880

1100

78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

0.0

3.2

6.4

9.6

12.8

16.0

Incidents

Age

Number incidents Average age

Accidental pollution from tankerslargest accidents and age

Source: ITOPF/INTERTANKO

Oil pollution – 1000 ts Average age

0

100

200

300

400

500

78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

0.0

3.2

6.4

9.6

12.8

16.0

Accidental pollution

Age

Total losses, tankers and bulkers

Source: Clarkson

Number

0

2

4

6

8

10

12

14

16

18

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Tankers 47

Bulkers 155

TankerMarket

Oil price and VLCC freight rates

Source: ITOPF

0

20

40

60

80

100

120

140

Jan-

98

Jul-9

8

Jan-

99

Jul-9

9

Jan-

00

Jul-0

0

Jan-

01

Jul-0

1

Jan-

02

Jul-0

2

Jan-

03

Jul-0

3

Jan-

04

Jul-0

4

Jan-

05

Jul-0

5

Jan-

06

Jul-0

6

0

10

20

30

40

50

60

70

VLCC rate - PG West

Oil price Arab light

$ per day freight rate $ per barrel oil price

Source: INTERTANKO

Oil price and freight rate

0

10

20

30

40

50

60

70

80

Nominal priceArabian Light

Real PriceArabian Light

Nominal freightrates PG-West

Deflated freightRates PG-West

$/barrel

Source: INTERTANKO

Gasoline price at the pump

$ per litre

0.0

0.3

0.5

0.8

1.0

1.3

1.5

USA Japan Germany UK

Long haul freight,$3.3/bbl

Refining/marketing

Oil price (FOB)OPEC basket Jan2003 IEA table 8Tax

Cost elements making the: gasoline price:

mbd

Source: BP Review

World oil demand - mbd

65

70

75

80

85

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

litres

Source: BP Review

Oil consumption per capita

0

2

4

6

8

10

12

US Japan UK World FSU China Africa

mbd

Oil consumption if world populations consumed oil as Americans

0

50

100

150

200

250

300

350

400

450

500

World oil cons Oil cons. if all consumed as Americans

mbd

s

86 mbd 451 mbd

mbd

Source: Fearnleys/IEA

Seaborne oil trade and Middle East oil production

0

6

12

18

24

0

3,000

6,000

9,000

12,000

Middle East Oil Productionmbd

Tonne miles

'000

bil tm

mbd

Source: IEA

Sources of European oil imports - mbd

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Europe

America

Europe

Middle East

Africa

FSU

OthersSource: IEA

mbd

Source: IEA

Sources of US oil imports - mbd

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

1998 1999 2000 2001 2002 2003 2004 2005 2006

N America

Europe

M. East

Ven/Ecu

Africa

Others

Source: IEA

Source: IEA

Sources of Asian oil imports

3%

6%82%

5%

4%

Indonesia

Middle East

Africa

Others

Asia

Source: IEA

Chinese net oil imports - mbd

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

1999 2000 2001 2001 2002 2003 2004 2005 Pr06 Est07

Products/feedstock

Crude oil

World oil supply - mbd

Source: IEA

0

10

20

30Non-OECDAsiaAmericas

China

Others

FSU

OPEC

mbd

TankerSupply

Source: INTERTANKO

Tanker ordering

'000 dwt

0

2,000

4,000

6,000

8,000

10,000

12,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Aver06

Aver.05

2006

2005

Phase out SH tankers above 5,000 dwt - m dwt

Source: Clarkson

%

0

10

20

30

40

50

60

70

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

MARPOL (min phase out - trading of SHuntil 25 years)EU + no SH after 2010

OPA90

Source: INTERTANKO

Tanker deliveries, scrapping, phase-out

• m dwt

-20

-15

-10

-5

0

5

10

15

20

25

30

35

92 94 96 98 00 02 04 06 08

Phase out*

Deliveries

Demolition

Net change

Net change

*1.6 m dwt is added yearly as conversions

+7%+6%+6%

m dwt

Source: INTERTANKO

VLCC fleet development - number tankers

290

322

354

386

418

450

3,300

3,640

3,980

4,320

4,660

5,000

dwt

number

Number

Tanker fleet double-hull development

Source: Clarkson

%

622

5159

67 68 71 74 77

9478

4941

33 32 29 26 23

0

20

40

60

80

10019

91

1997

End

02

End

03

End

04

End

05

End

06

End

07

End

10*

DH SH/DB/DS

% dwt share*:

* Assumes phase out according to regulations (rounded upwards, 25 years after 2010.

mbd

Source: INTERTANKO

VLCC fleet development - number tankers

400

450

500

550

600

End 92 93 94 95 96 97 98 99 00 01 02 03 04 05 P06 P07 P08 P09

Conclusion

• High performance• Weaker demand development• Strong fleet increase• Reduced earnings