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Latin American Panel October 31, 2012. INTERTANKO OVERVIEW REPORT JOSEPH ANGELO DEPUTY MANAGING DIRECTOR. MEMBERSHIP BUDGET SECRETARIAT CURRENT MAJOR ISSUES TANKER INCIDENTS ANNUAL TANKER EVENT. MEMBERSHIP 230+ Members 3,200+ Tankers 280+ Million DWT Members in 40+ countries - PowerPoint PPT Presentation
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Leading the way; making a difference
Latin American Panel October 31, 2012
INTERTANKO OVERVIEW
REPORTJOSEPH ANGELO
DEPUTY MANAGING DIRECTOR
Leading the way; making a difference
MEMBERSHIPBUDGET
SECRETARIATCURRENT MAJOR ISSUES
TANKER INCIDENTSANNUAL TANKER EVENT
Leading the way; making a difference
MEMBERSHIP230+ Members
3,200+ Tankers
280+ Million DWTMembers in 40+ countries
MORE THAN 75% OF THE INDEPENDENT TANKER FLEET
330+ Associate Members
Leading the way; making a difference
m dwt/number members number ships
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0
58
116
174
232
290
0
680
1,360
2,040
2,720
3,400No. members m dwt No. ships
Leading the way; making a difference
BUDGET 2010 2011 2012 (Actual) (Actual) (Budget)
Total Operating Income (US$) 7,381,600 7,753,228 7,401,925
Total Operating Expenses (US$) 7,062,856 6,886,593 7,373,997
Operating Result 318,744 866,635 27,928
Non-operating Income/expenses -21,179 88,303 -25,000
Result for Year 297,565 954,938 2,928
Leading the way; making a difference
SECRETARIAT21 STAFF MEMBERS IN 4+ OFFICES Oslo (8), London (11), Singapore (1), USA (1) + Brussels
STAFF INCLUDES- Managing Director - Deputy Managing Director & Director of Regulatory Affairs- Technical Director (+ new Technical Manager in London)- Marine Director- General Counsel
Leading the way; making a difference
CURRENT MAJOR ISSUES
SustainabilityFive-Year Strategic Plan
Ballast water managementPiracy
Greenhouse gas emissionsHigh level discussions with OCIMF
Leading the way; making a difference
SustainabilityDeep 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.”
Leading the way; making a difference
Click to edit Master title styleTANKER 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
Leading the way; making a difference
Leading the way; making a difference
Click to edit Master title styleTANKER 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
Leading the way; making a difference
SustainabilityINTERTANKO Council (Nov 2011) agreed that the Secretariat should:1. Engage in a dialogue with OCIMF on the ship’s speed which is currently used in charter party agreements, in an effort to reduce air emissions.2. Engage with stakeholders to brainstorm ways to address the concerns while ensuring there is not an erosion of the safety/quality standards in the current market conditions.
Leading the way; making a difference
INTERTANKO Council (May 2012) agreed to: 1. development of an optimal speed model to show the relationship between the time charter equivalent earnings and CO2 emissions, based on a known freight rate for a specific route and different tanker speeds. 2. expand scope of the WorldScale Committee to include commercial issues that have an impact on tanker operations, including:
• proper promotion of speed optimization• rising fuel costs• broker’s fees• certain charter party clauses regarding purging
and cargo heating; and • possible decoupling the fuel costs from the
commercial transactions.
Leading the way; making a difference
TC equivalent and emission at various speeds
$/day
7.0 8.0 9.0 10.0 11.0 12.0 13.0 14.0 15.0 16.0 17.00
8,000
16,000
24,000
32,000
40,000
0
3,000
6,000
9,000
12,000
15,000
CO2 emission
TCE Laden
TCE Ballast
Speed
Assumed market $12,000 per day bunker price $600 per tonne
Tonnes CO2 emisson
Leading the way; making a difference
EXCOM (Sept 2012):• acknowledged tanker owners contributed to the problems
by over-ordering;• agreed that current market levels could actually endanger
the supply chain element of safe, sustainable transportation of oil, products and chemicals;
• agreed that INTERTANKO should explore mechanisms to redress the risk/reward balance for owners with a view of ensuring future sustainability of the industry as a whole and a transparent, balanced and functioning tanker market; and
• focus will be on engagement with all stakeholders, including brokers, charterers and oil companies
Leading the way; making a difference
Five-Year Strategic Plan• Scenario planning looking at macro environment
and influences• Key influences:
Market conditionsGeo-political situation worldwideEnvironmental concerns• Most likely scenario for the next five years –
Strong environmental concerns within an unstable geopolitical situation
Leading the way; making a difference
Five-Year Strategic PlanMajor Issues• Sustainability • Human Element • Tanker safety and performance• Greenhouse Gas Emission reduction• Air emissions reduction• Ballast water management • Maritime security threats
Leading the way; making a difference
Five-Year Strategic PlanDesired OutcomesSustainability• Members have access to tools, models and
information to enable them to continue operating
Tanker Safety & Performance• Members proactively positioned for top
performance with regard to safety & performance
Leading the way; making a difference
Five-Year Strategic PlanDesired OutcomesHuman Element • Criminalization of seafarers• Visas and shore access• Seafarer welfare and fair treatment• Competence• Availability
Leading the way; making a difference
Five-Year Strategic PlanGreenhouse Gas Emission Reduction• Members’ new tankers meet, preferably exceed,
required EEDI values and CO2 emission reductions targets
• Development of solid industry practices and a monitoring system relevant to GHG emission reductions from tankers in operation, in cooperation with other stakeholders such as OCIMF, allowing Members’ tanker fleets to achieve & demonstrate increases in efficiency
• While legislation on MBMs is not justified at this time, if it were to be implemented, the Association will support/ promote the most practical and transparent MBM alternative at IMO, but not at regional level
Leading the way; making a difference
Five-Year Strategic PlanDesired outcomesAir Emission Reduction• Promote global switch to MGO• Members fully advised on best choices for compliance
with ECA requirements (and on how to assess/select scrubbers)
• Revised EU Sulphur Directive aligned w/MARPOL
Ballast Water Management• Members able to achieve compliance with current and
future discharge standards (both regionally and internationally)
Leading the way; making a difference
Five-Year Strategic PlanDesired outcomesGlobal Maritime Security Threats• Members suitably informed to protect vessels
and crew from maritime security threats• Key stakeholders develop policies and positions
benefiting the whole industry to ensure freedom of navigation
• Members suitably informed of sanctions that affect their trading patterns to enable them to make informed decisions on lawful trade
Leading the way; making a difference
Greenhouse gas emissionsEnergy Efficiency Design Index (EEDI)• Amendments to the MARPOL Convention • Enter into force Jan 1, 2013 for new ships• Provisions for 4 year waiver• Method of compliance??
Ship Energy Efficiency Management Plan (SEEMP)
• Applies to new and existing ships• Ship-specific plan developed by the ship owner• INTERTANKO guide on Tanker EEMP
Leading the way; making a difference
Greenhouse gas emissionsINTERTANKO 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
Leading the way; making a difference
Greenhouse gas emissionsMarket Based Measures (MBMs)• Governments believe EEDI is not enough• Nine proposals under consideration at IMO• Fund, Emission Trading Scheme (ETS),
Efficiency incentive scheme
INTERTANKO Policy on MBMs• MBMs are not justified at this time• If an MBM should be required:
1. Fund is simplest and most transparent2. Not in favor of an ETS
Leading the way; making a difference
High level discussions with OCIMF• Greenhouse gas emissions
• Piracy – Armed guards
• Tanker officer competency and experience
• Vetting matters
• Mercury in crude oil, safety aspects
• Sustainability of the Tanker industry
Leading the way; making a difference
Source: INTERTANKO, based on incident reports from LMIU and pollution figures from ITOPF
Tanker incidents - all tanker types and sizes
Number incidents 1,000 ts oil spilt
Accidental oil pollution from tankers was record low in 2010 and again in 2011
1978
19
80
1982
19
84
1986
19
88
1990
19
92
1994
19
96
1998
20
00
2002
20
04
2006
20
08
2010
20
12
0
210
420
630
840
1050
0
120
240
360
480
600
Miscellaneous Fire/Expl
Hull & Machinery Grounded
Coll/Contact Oil pollution
Information is based on reports from Lloyd's Mar-itime Information Unit and The International Tanker Owners Pollution Federation2012 is a projection based on 228 days
Leading the way; making a difference
ANNUAL TANKER EVENT
Venue – Grand Hotel, Oslo, Norway
Dates – May 28 – 31, 2013
Events: Executive Committee MeetingCouncil Dinner and MeetingAnnual General MeetingGala DinnerTanker SeminarWorkshops
Leading the way; making a difference
THANKYOU!!WWW.INTERTANKO.COM