Heidmar Marine Forum IV March 29, 2012

INTERTANKO OVERVIEW

JOSEPH ANGELOMANAGING DIRECTOR

INTERTANKOWORKPLAN PRIORITIES

CURRENT MAJOR ISSUESTANKER INCIDENTS

WEB SITE INFORMATION

ANNUAL TANKER EVENT

INTERTANKO

MISSION Provide Leadershipto the Tanker Industry in serving the World

with the SAFE, ENVIRONMENTALLY SOUND AND EFFICIENT seaborne

transportation of oil, gasand chemical products

INTERTANKOPRIMARY GOAL

Lead the CONTINUOUS IMPROVEMENTof the Tanker Industry’s Performance

in striving to achievethe Goals of:

• Zero Fatalities• Zero Pollution

• Zero Detentions

MEMBERSHIP

MEMBERSHIP is open to independent tanker owners and operators of oil and chemical tankers (i.e. non-oil companies and non-state controlled tanker owners) who meet the membership criteria.

ASSOCIATE MEMBERSHIP is available to any entity with an interest in the shipping of oil and chemicals.

MEMBERSHIP

• 230+ Members• 3,200+ Tankers

• 280+ Million DWT• Members in 40+ countries

• MORE THAN 75% OF THE INDEPENDENT TANKER FLEET

• 330+ Associate Members

Graphs-Power-Membership.pptx

WORKPLAN PRIORITIESCORE PURPOSES • SAFETY/TECHNICAL

• SEAFARERS

• ENVIRONMENT

• MARINE OPERATIONS

• REGULATORY/LEGAL

• TANKER INFORMATION

SAFETY/TECHNICAL• Damage stability P • Inert gas P • Shipyard standards P• Class standards P• Fuel quality P• Mercury in crude P • Tanker design• Structural integrity• Machinery/equipment• Fuel switching• Safe tank entry• Gas detection• Biofuels• Cargo properties

SEAFARERS• Criminalization• Crew competence• Shore access • Fair treatment of seafarers• Crew visas• Seafarer Id documents• Accommodation spaces• Cadet berthing• Fatigue• ILO/MLC 2006

ENVIRONMENT• GHG emissions• Ballast water• Reception facilities• Air emissions• Ship recycling• Anti-Fouling• Waste management• Noise pollution• Response management• Hull biofouling• Ship striking mammals

MARINE OPERATIONS• Piracy• Vetting• Port State Control • Chemical operations• Loadlines off South Africa • Lifesaving appliances• Pilotage• Port & Terminals• Navigation issues• Offshore operations• Ship/Ship transfer• ISPS Code • Security Officers• Ship security alert systems• Accident investigations

REGULATORY/LEGAL• Sanctions• Limits of liability• Insurance• Oil spill compensation• Conflict in law• UNCLOS• Legislation• Charter party• FDIP• Demurrage • Intellectual property • Worldscale• Anti-corruption

TANKER INFORMATION• Tanker market• Panel meetings• Web • Sustainability (NEW)• Weekly News• Annual Review/Report• Publications• Presentations• Tanker statistics• Incident analysis • Workshops• Seminars• Bulletins• Global Political/ Economic Environment

EXCOM/COUNCIL ISSUES

High level discussions with OCIMF

Piracy

Greenhouse gas emissions

Sustainability

DISCUSSIONS WITH OCIMF

High Level discussions (Chairmen) – “Best the relationship has ever been”Issues• Greenhouse gas emissions• Piracy – Armed guards• Tanker officer competency and experience• Vetting matters• Mercury in crude oil, safety aspects• Sustainability of the Tanker industry

PIRACY - Somalia• 2010 Statistics (IMB) - 219 attempted incidents

- 49 hijackings (21% of incidents)• 2011 Statistics

- 237 attempted incidents- 28 hijackings (11% of incidents)

• 2012 Statistics (Mar 19)- 36 attempted incidents- 7 hijackings (19% of incidents)

PIRACY

INTERTANKO FOCUS• Actions members can take to

protect themselves

• Actions we want governments to take to protect our members

FOCUS AREAS - INDUSTRY

• Best Management Practices (BMP)

• Citadels

• Armed guards

BMP4

Three essential requirements that cannot be over emphasized:

• Register with MSCHOA

• Report to UKMTO

• Implement Self Protection Measures

BMP4• Released August 15, 2011 (BMP3 issued 6/2010)• Updates in BMP4 include:

- Revision to the boundaries of the High Risk Area- Clarification of reporting requirements for MSCHOA and UKMTO - New subsection on “Prosecution of Pirates – Assisting Law Enforcement Authorities”, produced with INTERPOL- Guidance on the assistance provided by INTERPOL. - New section on Armed Private Maritime Security Contractors

COMPLIANCE WITH BMP

• MSCHOA – currently issuing regular Monthly Compliance Report to Industry

• Report lists vessels which are not compliant with BMP by either:

1. not Registering with MSCHOA 2. not Reporting to UKMTO 3. having no visible self protection measures

COMPLIANCE WITH BMPIndustry is responding by:• Contacting Shipping Companies on list• Emphasising need for compliance with BMP,

in particular the 3 major elements in order to harden a vessel against attack

• Urging compliance even if armed guards are being carried

• Requesting feed-back as to why vessels are not complying

• Offering advice and support

CITADELS• Since January 2010 there have been 27

recorded incidents of citadels being used by merchant crews under attack

• Reporting suggests that the citadel was decisive in foiling 23 of these attacks

• For 4, not all in citadel and/or no 2-way coms

• Pirates developing tactics to breach citadels

• Advise issued by the military regarding the use of CITADELS on MSCHOA web site

CITADELSIndustry developed guidance on citadels• Describes the construction and use of a Citadel in order

to provide effective protection against determined intrusion

• Guidance does not recommend or endorse the use of a Citadel; aim to present the relevant facts to enable the Ship Owner/Operator to reach a reasoned conclusion as to whether or not to utilise a Citadel

• Guidance has been approved by NATO, EUNAFOR and CMF and is available on their web sites

ARMED GUARDS• 50+ recorded incidents where onboard

armed security teams were involved

• No recorded incidents of vessels with onboard armed security teams being pirated

• Military report use of armed guards rising

• If embarked, military request it is reported

• Military position – decision between shipowners and flag state

ARMED GUARDSINTERTANKO position regarding the use of armed guards

• INTERTANKO believes it is the responsibility of the international navies to ensure the right of free passage on the high seas including the use of vessel protection detachments on merchant ships

• INTERTANKO does not advocate the arming ships' crews

• INTERTANKO believes that the use of private armed guards or private security forces onboard merchant ships has to be a matter for each individual owner or manager to assess as part of their own voyage risk assessment

ARMED GUARDSIMO Maritime Safety Committee• MSC.1/Circ.1405 – Interim Guidance to Shipowners,

Ship Operators and Ship Masters on the use of Privately Contracted Armed Security Personnel on Board Ships in the High Risk Area

• MSC.1/Circ.1406 – Interim Recommendations for Flag States regarding the use of Privately Contracted Armed Security Personnel on Board Ships in the High Risk Area

• MSC.1/Circ.1408 – Interim Recommendations for Port and Coastal States regarding the use of Privately Contracted Armed Security Personnel on Board Ships in the High Risk Area

FOCUS AREAS - GOVTS• Increased "Government Will" to eradicate

piracy off Somalia• Cease the use of mother ships• Increased prosecution of convicted pirates• Increased naval assets in the region• Increased public awareness to drive the

desired increase in "Government Will“• Action to address the root cause of piracy

ashore in Somalia

SOS CAMPAIGN• SaveOurSeafarers (SOS) campaign initiated by

INTERTANKO. Joined by BIMCO, ICS, ITF and INTERCARGO

• Contracted with PR firm to increase public, business and government awareness

• Phase One –

- Ad in Financial Times and World Street Journal- www.SaveOurSeafarers.com web site- Letters to UN SG, Heads of State and EU President- Interviews with press and news media- Press releases after incidents

SOS CAMPAIGN

• Phase Two –- Social media (Blog, Twitter, Facebook, etc)- Actively engage policy makers- Further ads, press releases and interviews- Seek high profile name to assist in cause

• Wider industry involvement, now includes support from 30 maritime associations/organizations

• Steering committee established to brainstorm ideas, prioritize work items and manage budget

• Phase Three - More focus on high level politicians

RECENT DEVELOPMENT

• Feb 23 – London Somalia Conference• Hosted by UK PM David Cameron• 40+ senior government leaders• Focus on seven areas, including piracy

Major Concern – Cameron statement

“…creating an international task force to discourage the payment of ransoms to pirates and other groups to eliminate the profit motive…”

GREENHOUSE GAS • Energy Efficiency Design Index (EEDI)

Amendments to the MARPOL Convention Enter into force Jan 1, 2013 for new ships

• Ship Energy Efficiency Management Plan (SEEMP) Applies to new and existing shipsShip-specific plan developed by the ship ownerINTERTANKO guide on Tanker EEMP

• Market Based Measures (MBMs)Governments believe EEDI is not enoughNine proposals under consideration at IMOFund, ETS, Efficiency incentive scheme

GREENHOUSE GAS

• Policy on implementation of IMO Energy Efficiency Design Index (EEDI) requirements

- 4 year waiver – Apply equally to all new ships- Method of compliance – Improved hull design, propulsion efficiency and energy optimisation, rather than predominantly on reduced speed designs

• Policy on Market Based Measures (MBM) – MBMs are not justified at this time

SUSTAINABILITY• Deep concern that the current tanker market rates

are consistently below ship owners’ operating costs.

• INTERTANKO’s Chairman, Capt Graham Westgarth

“If these rate levels continue for a long period, this could lead to a situation where sustainability of the oil transportation industry is threatened.”

“Our Members operate tankers to the highest standards and will continue to do so. Operating for a prolonged period in an environment where tanker owners are not even covering their operating costs is obviously not a situation that can be maintained.”

TANKER MARKET

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

VLCC AG-Japan, 250,000 ts

Suezmax Wafr-US 130,000 ts

Aframax N Sea-UKCont, 80,000 ts

Product Caribs-US, 38,000 ts

$/day

TANKER SUPPLY19

92

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

275

329

383

437

491

545

3,300

3,920

4,540

5,160

5,780

6,400

dwt Number

numberm dwt

TANKER SUPPLY

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015-25

-5

15

35

55

75

95Last phase out

Deletions

Delveries

Surplus zero trade growth

Surplus 2.5% trade growth

Surplus 4% trade growth

Surplus 6% trade growth

year

Assumed market balance end 2008

Minus 2% growth in 2009 and the above scenarios later

Assumed removal of double hull tankers

m dwt

Under above assumptions, 6% growth is necessary to regain same market balance in 2014 as in 2008

Tanker Incidents and accidental pollutionIncludes all tankers types and sizes

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

0

210

420

630

840

1050

0

120

240

360

480

600

Fire/Expl Miscellaneous

Hull & Machinery Grounded

Coll/Contact Oil pollution

No. of incidents ‘’000 tons pollution

Information based on reports from Lloyd's Maritime Iin-formation Unit and The International Tanker Owners Pollution Federation

WEB SITE INFORMATION

Databases• Terminal vetting

• Port information (port costs, reception facilities)

• Vetting inspection feedback

• PSC inspection feedback

• Confidential Accident Reporting (CARP)

WEB SITE INFORMATION

Benchmarking (comparison with INTERTANKO fleet)

• Vessel inspection questionnaire (VIQ)

• TMSA 2

• Crew/officer retention

• Lost time indictor

ANNUAL TANKER EVENT

• Venue – Singapore • May 9 – Council dinner

• May 10 – Council meeting

• May 11 – Tanker Seminar- Tanker market

- Piracy

- Technical session

THANKYOU!!

WWW.INTERTANKO.COM