Intertanko North European Panel Meeting

31st March 2009

Our Purpose & Organisation

Engage in activities of mutual concern relating to transportation by tanker and marine terminalling of crude oil, liquefied natural gas, liquefied petroleum gas, their derivatives and related organic compounds, with special reference to the protection of the marine environment and the promotion of safety in marine operations.

• 72 members in voluntary association • Executive Committee directs

standing committees and a full-time secretariat supporting the work of the Marine Forum

Our Members

• Abu Dhabi Company for Onshore Oil Operations (ADCO)

• Abu Dhabi Marine Operating Company (ADMA OPCO)

• Abu Dhabi National Oil Company (ADNOC)• Addax Oryx Group• Administracion Nacional de Combustibles

Alcohol y Portland (ANCAP)• Bakri International Energy Company Ltd • BG LNG Services LLC• BHP Billiton Ltd• BP Shipping• Cargill Ocean Transportation• Centrica PLC• Chevron Shipping Company LLC• Compania Espanola de Petroleos SA

(CEPSA)• ConocoPhillips Shipping LLC• Emirates National Oil Company• EnCana Corporation• Enel Trade FTL

• Engen Petroleum Ltd• Eni SpA• Erg Med SpA• Essar Oil Ltd• Excelerate Energy• Greater Nile Petroleum Ltd.• Hess Corporation• Husky Energy• Indian Oil Corporation• Ineos Manufacturing Scotland Ltd• International Marine Transportation Ltd• Koch Supply & Trading LP• Kuwait Oil Company (KOC)• LUKOIL Oil Company• Lyondell-Basell• Maersk Oil• Marathon Petroleum Co LLC• Marquard & Bahls AG• Motor Oil (Hellas) Corinth Refineries SA• Murco Petroleum Ltd

Our Members

• National Iranian Tanker Company• Neste Oil Corporation• Nexen Inc• Nigeria LNG• Occidental Petroleum LLC.• OMV Refining & Marketing GmbH• PDV Marina SA• Petro-Canada• Petroleo Brasileiro SA (PETROBRAS) • Petroleos de Portugal PETROGAL SA• Petroleos Mexicanos (PEMEX)• Petroleum Industry Marine Association

of Japan (PIMA)• Petronas Sungai Udang Port Sdn Bhd• Petron Corporation • Preem Petroleum AB • Primorsk Oil Terminal• Qatar General Petroleum Corporation

• Reliance Industries Ltd• Repsol YPF Trading Y Transporte SA• SARAS SpA• Saudi Arabian Oil Company

(Saudi Aramco)• Sempra LNG• Shell International Trading and

Shipping Company Ltd• Sonangol USA• Sonatrach SpA• StatoilHydro ASA• Sunoco Logistics Partners LP• Talisman Energy UK Ltd• Tasweeq• Tesoro Maritime Company • Total SA• Valero Marketing & Supply Co • Vermillion Energy Resources

OCIMF Committee Structure

Executive Committee (ExCom)Executive Committee (ExCom)

General PurposesCommittee (GPC)

General PurposesCommittee (GPC)

Legal Committee

Legal Committee

Ports and TerminalsCommittee (PTC)

Ports and TerminalsCommittee (PTC)

IMO ObserverDelegation

IMO ObserverDelegation

Marine Technical Sub-Committee

(MTSC)

Marine Technical Sub-Committee

(MTSC)

Navigation and RoutingSub-Committee

(NaRSuC)

Navigation and RoutingSub-Committee

(NaRSuC)

SIRE Focus GroupSIRE Focus Group

ICESub-Committee (ICE)

ICESub-Committee (ICE)

Western Terminal Forum (WTF)

Western Terminal Forum (WTF)

Offshore TerminalForum (OTF)

Offshore TerminalForum (OTF)

European/EasternTerminal Forum

(EETF)

European/EasternTerminal Forum

(EETF)

Asia/PacificTerminal Forum

(APTF)

Asia/PacificTerminal Forum

(APTF)

Task ForcesTask Forces Task ForcesTask Forces

OCIMF Secretariat

Phil DaviesDirector

Phil DaviesDirector

Jane FairweatherExecutive Administrator

Jane FairweatherExecutive Administrator

Pauline GilbertAccounts Administrator

Pauline GilbertAccounts Administrator

Oliver PointonSIRE Compliance

Manager

Oliver PointonSIRE Compliance

Manager

David SavageSIRE Training & Development

Manager

David SavageSIRE Training & Development

Manager

Geoff SnowOCIMF Programme

Manager

Geoff SnowOCIMF Programme

Manager

Bill CrabbsSenior Technical

Adviser

Bill CrabbsSenior Technical

Adviser

Philip PascoeGeneral Counsel

Philip PascoeGeneral Counsel

Mike SittsDeputy Director,

Chief Representative to

IMO

Mike SittsDeputy Director,

Chief Representative to

IMO

Lauren McGeeAdvisers’ & Conference

Facilities Administrator

Lauren McGeeAdvisers’ & Conference

Facilities Administrator

Rebecca Harrison

SIRE Inspector Accreditation Administrator

Rebecca Harrison

SIRE Inspector Accreditation Administrator

Aziz Benbelkacem

OCIMF & IT Systems

Administrator

Aziz Benbelkacem

OCIMF & IT Systems

Administrator

Cliff ProctorTechnical Adviser

(Engineering)

Cliff ProctorTechnical Adviser

(Engineering)

Ian SoadyTechnical Adviser

(Offshore)

Ian SoadyTechnical Adviser

(Offshore)

Shaikh RahimTechnical Adviser

(Nautical)

Shaikh RahimTechnical Adviser

(Nautical)

Our Objectives

StandardsTo identify safety and environmental issues facing the oil tanker and terminal industries, and develop and publish recommended standards that will serve as technical benchmarks.

RegulatoryTo contribute to the development of international conventions and regulations that enhance the safe construction and operation of oil tankers and terminals, working with the IMO and other regulatory bodies, both regional and national.

EnforcementTo encourage flag States, port States and classification societies in their enforcement of international conventions and regulations.

PromulgationTo facilitate access by charterers and authorities to data on tankers relating to safety and pollution prevention, through the Ship Inspection Report (SIRE) Programme and the Tanker Management Self Assessment Programme (TMSA).

ConsultationTo promote ratification and implementation of international compensation conventions.

PromotionTo actively promote OCIMF’s role in the development of safety and environmental guidelines and recommendations, harnessing the skills and experience of OCIMF members and holding industry events addressing the issues.

SIRE Status

• 46 report submitting companies

• >17,000 reports less the 12 months old on 6,550 tankers

• ~1,300 new inspection reports per month

• ~2.6 inspections/vessel/year

• ~5000 reports requested per month

• Electronic 24/7 access via WebSERM2

• Expansion of SIRE to barges and small ships

SIRE

OCIMF – TMSA2

TMSAGeographical Distribution of subscribers

Piracy - Maersk Regensburg

Piracy - Advocacy

• High Level Contact through;– IMO– EU– NATO– US Government

• MARAD• DOD• USCG

• Assigned Personnel to EUNAVFOR

Piracy - Industry

• Facilitated Joint Naval Forces Somalia Piracy Workshop – December 18th

• Follow-up Workshop planned for March 17th 2009.

Piracy – Best Practices

• Developed Piracy Guide with Intertanko, SIGTTO & Intercargo

• Need to ensure ALL vessels have access to Best Practices.

MARPOL Annex VI & Climate Change

• OCIMF supports the approach chosen by the IMO MEPC 57 when amending the MARPOL Convention, Annex VI, on the prevention of air pollution from ships.

• OCIMF welcomes the IMO commitment to adopt, by 2009, an international binding framework aimed at reducing greenhouse gas (GHG) emissions from shipping operations.

IMO – Greenhouse Gas Reduction

OCIMF participates in IMO's Working Groups on Greenhouse Gas Emissions from Ships and we support IMO’s assessment that this regulatory framework should be:

– effective in contributing to the reduction of total global GHG emissions; – binding and equally applicable to all flag states; – based on a goal-based approach and not prescribe specific methods;– based on sustainable environmental development without penalizing

global trade and growth;– able to limit - or at least - effectively minimize competitive distortion; – cost-effective;– supportive of promoting and facilitating technical innovation and R&D in

the entire shipping sector;– accommodating to leading technologies in the field of energy efficiency;– practical, transparent, fraud free and easy to administer.

Current Progress @ IMO

• IMO OSLO Intercessional Meeting made progress in regard to:– Design Index; This index will establish the minimum fuel-efficiency requirements at

the design stage of ships. – Operational Index; This index was adopted in July 2005 and has been used by a

number of flag States and industry organisations to evaluate and improve the performance of their fleet with regard to CO2 emissions.

– Merits of Market Based Instruments (bunker levy and ETS) were considered.

• MEPC 58 (October 08); GHG central to the agenda:– Design Index; Completed work on the development of the Design Index. Shipyards

are encouraged to implement index voluntarily and bring results back to MEPC 59 where code will be finalised.

– Operational Index; Work continued on developing an IMO Best Practice guide for Fuel Efficiency.

– Market Based Instruments; Deferred until MEPC 59

• Intercessional Meeting – March 2009 – Develop the Shipboard energy Management Plan, SEMP. For adoption at MEPC 59.

MEPC 59 – Market Based Instruments

• Working Group at MEPC 59 will be focused on building a framework for a possible Maritime MBI for presentation at the post Kyoto summit in Copenhagen, November 2009.

• Options Include:– Bunker Levy – This has been discussed both in Oslo and at MEPC 58. There is little

support outside of Denmark for any form of direct, or indirect taxation on fuel.– Greenhouse Gas Pollution Compensation Fund – Similar to tax, is based upon

bunkers consumed during year with a contribution based on CO2 produced paid into an International fund. Seen as a back door approach to a levy.

– Emissions Trading – All submissions too date have been made by EU member states. OCIMF generally supports Emission Trading as the most efficient means to reduce GHG if Operational & Technical solutions are not considered to effectively meet reduction targets. OCIMF would prefer an IMO developed framework for future International or Regional ETS.

• A fundamental difference between the two schemes is that for the ETS there is a direct link to the market price of carbon and that the revenues will directly fund CO2 reductions whereas with the GHG Compensation Fund, there is no certainty on where the funds will be directed or how they will be spent. There is a danger that the compensation funds could be allocated according to political drivers and without achieving the environmental objective.

OCIMF Activities

• OCIMF has developed an Energy Efficiency & Fuel Management Plan to provide operators with a basis for assessing, modifying, and improving their management systems, with the aim of maximising energy efficiency and thus reducing GHG emissions.

• Within the plan vessel operators are encouraged to establish and maintain procedures to measure and limit the use of energy in their operations. These should include provisions for:

– Minimising energy waste.– Promoting energy efficiency awareness.– Implementing vessel and voyage energy strategies to minimise energy usage.– Promoting co-operation with charterers and others to facilitate energy efficient

operations.

Overall

OCIMF remains committed to the development of an effective and sustainable international solution which achieves the objective of reducing ship emissions, ensuring that shipping remains the

greenest form of transport. 

EU Issues

Maritime transport is by definition of an international nature. To preserve the competitiveness of the

European ports and fleet, EU requirements should remain harmonised with the IMO.

Upcoming review of the Marine Fuels Directive:• With agreement at IMO level, the planned revision of the

Marine Fuels Directive should remain in line with the IMO decisions and therefore be used to quickly implement the amendments of the MARPOL Annex VI within the EU.

– The 0.1% Sulphur ‘at berth’ is particularly problematic.– OCIMF believes this provision should be reviewed before it

enters into effect on 1st January, 2010.

The fair treatment of seafarers must be ensured, maritime jobs must remain attractive:

– MEPs must also take this concern into consideration when reviewing the Criminal sanctions Directive.

Lifeboat Safety

• Significant Concern that incidents continue to occur.

• Three Incidents with OCIMF members in last 3 months 2008 – 4 Injuries / 3 Boats destroyed.

• Industry & IMO need to move faster to resolve.

Lifeboat Safety - Advocacy

• IMO DE• Inter Industry

Lifeboat Working Group

• OCIMF MTSC

Lifeboat Booklet

• Developed as Practical Guidance for Seafarers.

• Intertanko participation & assistance.

• OCIMF Next Steps– Development of

Standard Hook– Improved/Standard

Cockpit Ergonomics.– System Certification

Current OCIMF Priority Issues at IMO

• Comprehensive Review of the STCW Convention and Code• Measures to Prevent Accidents with Lifeboats• Measures to Prevent Explosions on Oil and Chemical

Tankers• MARPOL Annex VI and NOX Technical Code revision• Green House Gas Emissions• MARPOL STS Regulation - new Chapter 8• Ballast Water Convention• MSDS• E-Navigation Strategy• Goal Based Construction Standards• Performance Standards for Protective Coatings

27

Mercury In Crude - Shipping Issues

• Mercury in Crude/Condensate will be lost during transshipment in a number of ways– Adsorption - Hg adhering to the sides of the tank.– Mercury vapors – Hg is very volatile and will be

driven into the vapour space especially while carrying a high pour crude oil which requires heating.

– Drop Out – Hg may drop to the bottom of the tank and remain. Industry standard included sludge removal in dirty tankers every 2-5 years.

– Current waste disposal practices do not reflect the presence of Hg.

28

Crudes in the Far East with High Hg.

NWS Cond

60.4 0.01

25-200Dampier

Laminara

58.5 0.031ppb

FPSO (1.4)

Crude Name

API S %wt

HG ppb

Load PortBrunei Cond

72.6 0.0110ppb

Brunei Light

40.3 0.0625ppb

Seria Term

Champion

25.4

Seria Term

Nanhai Light

39.7 0.06

3 ppbHuizhou FPSO

Malamapaya

52.2 0.1300ppb

Terminal

300

Minas

35 0.08

13ppb Dumai

Arun Cond

57.2 0.01250 ppb

Blang LancangSenipah

50.8 0.03

125 ppb

Senipah

Tapis

45.5 0.02

25ppb

Tapis OT

Bach Ho

40.4 0.03

58ppb

Bach Ho OT

Tantawan

41.8 0.03230

FPSO

Rang Dong

38.5 0.05112ppb

FPSO

Miri

29.6 0.072 ppb

Miri OT

Labuan

30.6 0.031 ppb

Labuan

Ruby

34.3 0.027ppb

FPSO

Erawan

54.3 0.011980

FPSO

Benchamas

41.3 0.03500

FPSO

Belida

45.3 0.07

7ppb

FPSO

Anoa

45.9 0.07

16ppb

FPSO

Attaka/Badak

42.3 0.09

6ppb

Santan

Bayu Undan

55.9 0.007

30ppbFPSO

Bintulu Cond

66.2 0.04

1 ppb

Bintulu

Bongkot

50 0.01900

FPSO

Barrow

37.7 0.04

10ppb

Barrow Term

Thevenard

40.7 0.054ppb

Barrow Term

Sembilang

35.7 0.05

5 ppb

FPSO

Bontang Mix50.8 0.03

10ppbKumul Term

Mckee43.5 0.33

On Shore25 ppb

Maui Cond51.4 0.01

On Shore2 ppb

Kapuni Cond62.7 0.01

On Shore42 ppb

Maui Crude43.1 0.06

2 ppb

WestPort

Pattani

1125

FPSO

Sleb35.3 0.08

8ppb

Seria Term

Ardjuna35.2 0.09

5 ppb

FPSO

Sepinggan30.7 0.103

5 ppb FPSO

Kerapu44.7 0.04

42 pbb

FPSO

Kaji39.2 0.02

7ppb

FPSO

West Seno38 0.12

FPSO

Terengganu Con

41.8 0.05

10ppb

Masa OT

Varanus44.0 0.04

1ppbFPSO

41.1 0.03

Black Lion

37 Low

2ppb

FPSO

Onshore

B3 B17

B93 B86 B91

B84B84

B92 B89

B94 B91

B50

B22 B22

B25a

Belanak

43.3 0.019

400ppb

FPSO

B75 B25 B75B75 B50a

A2

A20A24

A17

A14

B5

B41 B69

A34

A35 A34

A31

B29

Lalang

39.7 0.05

67 ppb

FPSO

B47

B**

B29 B52

B46

Kutubu

44.7 0.058 ppb

Kumul Term

B42B53B23

B95

B95 B95 B95

B111

Ref #

3 ppb

3ppb

Hg content over 50 ppb

Hg Hot Spots

CVX Equity Crude

29

Scope of Mercury Issue

• Mercury is co-produced with crude oil and gas in some formations. We have many potential gaps in our knowledge regarding its behavior as it travels through our processes.

Tank bottomsProduced waterCutting and drilling mud

Process equipmentPipelineHg Specs on Gas

Vapour spaceTank bottomsWaste Disposal

Emission limitsPPE maintenanceProduct Specs

MRU waste Other waste streamsDisposal options

Hg speciation changes. Question is………..

where, what & how much

OCIMF PublicationsNew Publications• Mooring Equipment Guidelines (10/08) Published• Lifeboat Safety Booklet (10/08) Published• FPSO Competency Assessment (11/08) Published• Piracy – The East Africa/Somalia Situation (01/09) Published• LPG & LNG Manifolds (In Progress) SIGTTO Taking Lead• Offshore Hose Guidelines (03/09) Under Review• Tandem Mooring Guidelines (03/09) Under Review• Multi Buoy Moorings (03/09) Under

Development• Effective Mooring (04/09) Under Development• Guide To Perils At Sea And Salvage (06/09) ICS/OCIMF• Piracy & Armed Robbery (06/09) Under Development

A Voice for Safety

www.OCIMF.com

Oil Companies International Marine Forum 29 Queen Anne's Gate, London, SW1H 9BU

Tel: +44 (0) 20 7654 1200Fax: +44 (0) 20 7654 1205