INTERTANKO
Seminar
8th April 2011
INTERTANKO Seminar
Schedule
Friday 8th April 2011
0930
Welcome and introduction
INTERTANKO Overview
Vetting and Benchmarking
Piracy
Environmental Issues
Regional Issues
INTERTANKO Work Plan
Open discussion on all issues
1200-1300 Lunch
Anti-Trust/Competition Law
Compliance Statement
INTERTANKO’s policy is to be firmly committed to maintaining a fair and
competitive environment in the world tanker trade, and to adhering to all
applicable laws which regulate INTERTANKO’s and its members’ activities in
these markets. These laws include the anti-trust/competition laws which the
United States, the European Union and many nations of the world have
adopted to preserve the free enterprise system, promote competition and
protect the public from monopolistic and other restrictive trade practices.
INTERTANKO’s activities will be conducted in compliance with its Antitrust/Competition Law Guidelines.
Tanker Market Overview
The state of the Tanker Industry
• Uncertainty, fundamentals still strong but
high oil price a threat
• Slack in supply of tankers
– slow steaming (ballast)
– Lowering of C/P speed
– Suez Canal less used
– Piracy effect – longer routes/inefficiency
• Reduced Libyan export,
increased Middle East export
Tanker Market
World GDP and oil demand change
%
11
9
GDP growth - IMF
Oil demand growth - IEA
7
Tonne miles growth - Fearnleys
5
3
1
-1
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
-3
Oil/tanker demand correlates with Economic growth
Positive growth projected – but there is still uncertainty
Because the extra barrel is taken from the Middle east, tonne-miles growth is stronger
Source. IMF/BP/IEA/Fearnleys
Tanker Market
Oil price and freight rates 1970-2011
$ per barrel
100
Nominal price Arab Light
Real price Arab Light
Nominal freight rate AG-West
80
Real freight rate AG-West
Deflated by the Consumer Price Index (USD)
CPI* index 1982-84=100
60
40
2011
2010
2008
2009
2006
2007
2005
2003
2004
2001
2002
2000
1998
1999
1996
1997
1995
1993
1994
1991
1992
1990
1988
1989
1986
1987
1985
1983
1984
1982
1980
1981
1978
1979
1977
1975
1976
1973
1974
1972
1970
0
1971
20
Tanker Market
VLCC newbuilding prices and break even rates
m$
$/day
160
45,000
29
Break even rate
140
41,000
Newbuilding prices
18
Source: Clarkson Shipyard Monitor
31
120
37,000
29
41
54
55 70?
100
33,000
215 VLCCs
Based on LRFairplay
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
25,000
1998
60
1997
29,000
1996
80
Tanker Market
a fragmented industry
VLCCs
550
Some 140 owners
NITC
28
NYK
32
Mitsui
Nordic American
Suezmaxes
420
Some 110 owners
17
Euronav
17
Teekay
Aframaxes
890
Some 230 owners
10%
40
AET
7%
60
Teekay
58
Sovco/Novos
43
0
Based on LRFairplay
7%
37
10
20
30
40
50
60
Tanker Demand
Increase in world oil demand
bn tonne-miles
3.0
* *Rest of world
*Middle East
USA
China
World
2.6
2.2
1.8
1.4
1.0
0.6
0.2
-0.2
-0.6
-1.0
-1.4
-1.8
-2.2
Based on Fearnleys
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
-2.6
Tanker Demand
Tanker trade
bn tonne-miles
90,000
80,000
70,000
60,000
50,000
+20%
40,000
+36%
30,000
-38%
20,000
10,000
0
1970s
Based on Fearnleys
1980s
1990s
EST00s
Tanker Demand
Seaborne Oil Trade and Middle East Oil production
mbd
000 bn tonne-miles
24
13,000
21
11,200
Middle East
Oil Prod mbd
18
9,400
Tonne miles
15
7,600
•Asia 80% dependent on Middle
East, Europe 18% and US 17% some 15 mbd crude oil through
Hormuz 2010
12
5,800
Based on Fearnleys/IEA
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
4,000
1970
9
Tanker Demand
Crude oil seaborne trade
38 mbd in 2010
Others
48%
Saudi Arabia
15%
North Africa
12%
Other Persian
Gulf
25%
3057 bn tonne miles in 2010
Saudi Arabia
18%
Others
50%
Other Persian
Gulf
27%
North Africa
5%
Tanker Demand
Oil balance: production - consumption
mbd
20
Middle East
15
Oil
surplus
areas i.e.
exporting
areas
10
FSU
Africa
5
SC America
0
Oil
deficit
areas i.e.
importing
areas
China
-5
N America
Europe
-10
Asia - Pacific ex China
Source: INTERTANKO / IEA
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
-15
Tanker Demand
Middle East Oil production Jan - 2000 to Feb - 2011
mbd
24
End April
2004
$61,600/day
Source: IEA
23
Primo July 2008
$181,600/day
End Feb
2011
$14,000/
day
Mid Jan
2003
$91,000/
day
24 Nov
2011
$92,000/
day
22
20 July 2006
$87,000/day
Primo Jan
2007
$27,000/day
21
Primo
Sept
2009
$5,000/
day
20
8 July 2003
VLCC AGJapan
$14,000/day
19
Primo July 2003 VLCC AG-Japan
$7,000/day
Based on Fearnleys/IEA
01/01/11
01/07/10
01/01/10
01/07/09
01/01/09
01/07/08
01/01/08
01/07/07
01/01/07
01/07/06
01/01/06
01/07/05
01/01/05
01/07/04
01/01/04
01/07/03
01/01/03
01/07/02
01/01/02
01/07/01
01/01/01
01/07/00
01/01/00
18
Tanker Demand
Trade movements
mbd
60,000
Rest of world 47%
US
Europe
Japan
Rest of World
50,000
40,000
Rest of world 26%
30,000
20,000
10,000
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
0
Based on BP
Tanker Supply
Tanker fleet development
m dwt
number
545
6,400
491
5,780
Assumed max
phase out,
orderbook March
2009, include
437
chemical tankers
dwt
Number
5,160
Tanker fleet increase 2003-2013 some 75%
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
3,300
1996
275
1995
3,920
1994
329
1993
4,540
1992
383
Tanker Supply
Tanker phase out, deliveries, scrapping tankers 10,000 dwt
+ balance assuming various demand increases
m dwt
95
Max phase out
Deletions
75
Assumed market balance end 2008
Delveries
Surplus zero
trade grow th
Surplus 2.5%
trade grow th
Surplus 4%
trade grow th
Surplus 6%
trade grow th
55
35
Minus 2% growth
in 2009 and the
above scenarios
later
15
-5
Assumed removal
of double hull
tankers
-25
-02
03
04
05
06
07
08
09
10
11
12
13
14
15
year
Conclusions
Oil demand, tonne-mile, and tanker fleet indices
155
150
145
140
Oil demand index
Tonne miles crude tanker index
135
Tanker fleet index
130
125
120
115
110
105
Tanker fleet increase
2002-2010: 46%
100
Source: IEA, Fearnleys, INTERTANKO
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
95
Conclusions
• Despite disruptions, fundamentals still strong, but
….
• The dust has not settled neither from the financial
crises nor the Japanese earthquake/tsunami, and
the Arab insurgency continuous
• Tanker deliveries high next two years and the fleet
is young
Conclusions
Strategic tanker consideration
• China expected drive demand and the Middle
East has the reserves
• Successful Green House Gas reduction will mean
reduced oil consumption
• Market balance set to weaken the next couple of
years
• Costs reduction needs carful risk management
Conclusions
Average age tanker fleet above 10,000 dwt
Years
16
14
12
10
8
Based on LRFairplay
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
6
Vetting Issues Update
Smart Vetting 1
• Vetting Committee objectives & updates:
– The One Stop Shop Concept / Terminal Acceptance: We
have raised the concept of formation of a common marine
assurance “system” (not methodology), which would be
accessible and useable by each party concerned in the
screening process.
– Advising of Non Acceptance: We have raised the issue
regarding provision of information to owners to enable them
to address what may be identified as outstanding in a prompt
manner.
– Conditions of Class: - Transparency to report or not to
report? Major survey of members 53% response validating
concerns (submitted to OCIMF GPC discussions)
Smart Vetting 2
• Vetting Committee objectives & updates:
– Reward Systems to Reduce Inspections: Exploration of
establishing further reward systems to benefit good owners.
– Linking TMSA and the VIQ: Gap analysis undertaken by the
vetting committee: Potential benefits from linking TMSA with
the VIQ could result in a further shift to more self
assessment.
– SIRE/CDI HVIQ: We have requested SIRE to re-assess the
possibilities of harmonising the SIRE & CDI VIQ into a
harmonised VIQ.
Smart Vetting 3
• Vetting Committee objectives & updates:
– Officer Matrix Requirements: SIRE and CDI have advised
that they are planning to seek information from owners
regarding officer training systems in their respective
forthcoming revised VIQ’s
– Port State Use of SIRE & CDI reports: We are reviewing
the development of systems to increase the current low
usage of SIRE and CDI reports by the Port State Control
Authorities (Reduce the number of inspections and better
target sub-standard ship)
Smart Vetting 4
• Vetting Committee objectives & updates:
– INTERTANKO Guide for Engaging Independent Ship
Inspectors: Raised with SIRE: Potential for greater usage of
standard set of guidelines when engaging independent ship
inspectors
– Reporting to Oil/Chemical Companies: We have
investigated and provided information to members regarding
advice pertaining to “discoverability” in association with
reporting incidents to oil and chemical companies and we are
in discussion with OCIMF on this subject
INTERTANKO Benchmarking and
Databases
Terminal Vetting Database (TVD)
Quick recap...
What
• Terminal Vetting
– Tankers are vetted but are sometimes asked to make fast to poor quality
berths
– The vetting process works for ships, so why not for terminals?
Why
• enhance safety at the terminals
• improve member efficiency by influencing terminals to ‘fix’ problems
• maintain industry safety record
Who
• Access to the system is controlled by INTERTANKO and was strictly limited to
INTERTANKO Members and Associate Members
• As of 2010, access granted to all interested parties
• The Terminal Vetting Database is hosted by www.Q88.com in partnership with
INTERTANKO
• Access is usually set up within one business day
Terminal Vetting Database (TVD) – latest statistics
Stats for past 12 months:
# reports submitted:
3843
# berths covered:
1792
# reports with low rating: 350
Question containing low ratings:
•
•
•
•
•
•
•
•
•
•
•
•
Condition Apron/Fenders/Dock
Accessibility/Communication
English Skills
Safety Awareness
Bollard condition
Tug Performance/Condition
Condition Chicksans/Hose
Dock Lighting
Pre-transfer Conference
Emergency Preparedness
Courtesy
Surveyor Safety Awareness
82
76
67
60
59
44
42
42
40
37
31
29
TMSA related
• TMSA 2 Gap Analysis Document
http://www.intertanko.com/templates/intertanko/issue.aspx?id=44647
• TMSA 2 Benchmarking database
http://www.intertanko.com/templates/Page.aspx?id=46718
• Guidance on Change management
http://www.intertanko.com/templates/intertanko/issue.aspx?id=41452
TMSA
LTIF AND TRCF
Lost Time Frequency
T. Rec. Case Frequency
20
18
16
14
12
10
8
6
4
2
0
16
14
12
10
8
6
4
2
0
Entries
LTIF Pool Average: 1.39
Entries below pool average:
(65%)
Entries
TRCF Pool Average: 3.23
Entries below pool average:
(68%)
TMSA
CREW & OFFICER RETENTION
Crew Retention Rate
(Average 93.6%)
100
90
80
70
60
50
40
30
20
10
0
Officer Retention Rate
(Average 91.3%)
100
90
80
70
60
50
40
30
20
10
0
Entries
Entries
VIQ Benchmarking
• Traffic Light System, incorporating either Red or Green, to
indicate if the number of SIRE VIQ observations for your fleet
are either above or below the number of SIRE VIQ observations
for the collective of the INTERTANKO fleet.
Red = above INTERTANKO fleet average
Green = below INTERTANKO fleet average
• Fleet Average Deficiency:
"Total number of deficiencies per SIRE VIQ chapter, divided by
Total number of inspections“
• 12 month rolling period
• Confidential
http://www.intertanko.com/templates/intertanko/issue.aspx?id=4
7207
VIQ Benchmarking
(example output data)
SIRE Chapters
Petroleum
Chemical
Gas
Intertanko Fleet
Petroleum Average
Intertanko Fleet Intertanko Fleet
Chemical Average Gas Average
Certification & Documentation
0.5
0.5
0.62
0.5
0.27
Crew management
0.5
0.5
0.33
0.3
0.43
Navigation
0.5
0.5
0.8
0.56
0.84
Safety Management
0.5
0.5
1.49
1.23
0.91
Pollution Prevention
0.5
0.5
0.68
0.67
0.44
Structural Condition
0.5
0.5
0.06
0.17
0.25
Cargo & Ballast System Petroleum
0.5
1.03
0
0
0
0.71
0
0.5
0
0
0.84
Cargo & Ballast System Chemical
Cargo & Ballast System Gas
Mooring
0.5
0.5
0.78
0.56
0.41
Communications
0.5
0.5
0.14
0.24
0.29
Engine & Steering Compartments
0.5
0.5
1.05
1.05
0.88
General Appearance & Condition
0.5
0.5
0.44
0.51
0.36
Confidential Accident Reporting Platform
CARP database provides a simple functionality allowing the
quick & easy updating of accident data.
Enable members to input their own incident data in a fully
confidential basis whilst allowing INTERTANKO to use the
information entered so that:
•
•
•
•
Lessons can be learned and shared.
Similar accidents prevented.
Standardise accident data and categorisation.
Standardise simple accident analysis, root cause, direct
cause and corrective actions.
Platform Now Available
http://www.intertanko.com/templates/Page.aspx?id=47899
VIFF and PSCIFF
• “Vetting Inspection Feedback Forms” (VIFF)
– meets SIRE Inspector Compliance Requirements
– Launched May 2010
• “PSC Inspection Feedback Form” (PSCIFF)
– meets IMO PSCO code of conduct guidelines
– Launched October 2010
Both provide a means of confidential feedback to
INTERTANKO which can then be shared, confidentially,
with SIRE or relevant Port State MoU
Environmental Issues
Environmental Issues
1.
GHGs - Ship Energy Efficiency Management Plan
•
•
2.
Mandatory application after MEPC 62 (July 2011)
Charterers already referencing SEEMP (IMT MESQAC)
Biofouling
•
3.
Voluntary Guidelines to be adopted MEPC 62
Ballast Water Management
•
...!!
Environmental Issues
Ballast Water Management
IMO BWM Convention
•
•
•
•
The BWM Convention will enter into
force 12 months after ratification by 30
States, representing 35 per cent of world
merchant shipping tonnage.
As at 2 March 2010: 21 countries
representing 22.63% of world merchant
shipping tonnage
Slowing of ratification, but...
Implementation dates still important due
to retroactive application
Environmental Issues
Ballast Water Treatment
IMO BWM Convention
Summary of implementation dates:
Ship constructed before 2009
BW capacity 1500-5000m3 – have treatment system from first intermediate or renewal survey after
anniversary date in 2014
BW capacity less than 1500m3 and greater than 5000m3 – have to have treatment system from
first intermediate or renewal survey after anniversary date in 2016
Ship constructed in or after 2009
BW capacity less than 5000m3 shall have a treatment system installed at its second annual survey
and no later than 31/12/2011
Ship constructed after 2009 but before 2012
and with a BW capacity greater than 5000m3 shall have a treatment system from first intermediate
or renewal survey after anniversary date in 2016
Ship constructed in or after 2012
with a BW capacity of greater than 5000m3 shall be constructed with a BW treatment system
Environmental Issues
Ballast Water Treatment
Concern expressed over treatment systems to meet 2012 deadline
INTERTANKO Environmental Committee & ISTEC
need to find solutions to assist members and seek evidence that
systems will work in practice
Environmental Issues
Ballast Water Treatment
IMO BWM Convention
• States continue to implement IMO Convention, e.g. Norway
• Other States seek to go beyond IMO Convention, e.g. USA
• Implementation issues arising: Ballast Water Record Book
format
• IMO list of Guidelines continues to be important but overlooked
by operators:
Guidelines for Ballast Water Sampling
Guidelines for Ballast Water Management and Development of
Ballast Water Management Plans
Guidelines for Ballast Water Exchange
Guidelines for Ballast Water Exchange Design and Construction
Standards
Guidelines for Sediment Control on Ships
Regional Issues
Regional Issues
China Oil Pollution Regulations
Regulations on the Prevention and Control of Ship-Induced
Pollution of the Marine Environment
• Latest requirements effective 1st February 2011
• Relating to discharge of ship and cargo generated wastes
as well as the use of port reception facilities
– Compulsory Discharge (as per European Directive – no
exemption?)
– Pollutant receiving certificate required before ship is allowed to
clear port
– Administration:
Regional Issues
China Oil Pollution Regulations
Regulations on the Prevention and Control of Ship-Induced
Pollution of the Marine Environment
• Administration:
Prior to Waste
Discharge
PRF / Ship
Agreement
PRF Obtain Permit of
Operation from MSA
After Waste
Discharge
PRF provides Ship with
PRD – signed by Master
Ship applies MSA
PRC using PRD
• For International vessels, all waste to be discharged prior
to port clearance and PRC from MSA shown to port
authority
Regional Issues
China Oil Pollution Regulations
Regulations on the Prevention and Control of Ship-Induced
Pollution of the Marine Environment
INTERTANKO Observations and Queries
•
Does the ship operator have to gain a Pollution Receiving
Certificate each time the ship leaves port or on a periodic
basis (annually)?
•
Does the contract have to be with one reception facility
(contractor) or can it be more than one?
•
What are the limits of fees?
•
Is there a threshold at which compulsory discharge does not
apply? e.g. if waste quantities minimal as per EU Directive?
Regional Issues
Japan Earthquake and Tsunami
•
Precautions for vessels trading into Japan ports?
–
Information gathering on radiation levels
–
Crew protection and precautions?
–
Equipment required?
–
Ship/port interface?
•
Inspections and analysis by ports after vessel has traded to a
Japanese port?
–
Which ports?
–
What level of radiation is being deemed abnormal?
thank you
For more information please visit
www.intertanko.com
tim.wilkins@intertanko.com