“TANKERS TODAY”The Propeller Club, London

21 April 2004Anders Baardvik, Executive Manager

- The International Association of Independent Tanker Owners -- The International Association of Independent Tanker Owners -

Some figures…• 227 Members• 2,198 tankers• 165 million dwt• 37 countries• 70% of independent fleet • 271 Associate Members

INTERTANKO Membership

• 25 Strong SecretariatManaging Director, Dr. Peter M. Swift

• London, Oslo, Washington & Singapore• 14 Committees and Working Groups and 4

Regional Panels• 60 Work Items on the Agenda

INTERTANKO

• Aims to be present and participate in all fora where decisions are made that will have an effect on the industry

• Seat as NGO at the International Maritime Organization - IMO

• Partnership agreements with USCG, AMSA and close links to EMSA and MCA, OCIMF, IACS, Round Table, EC, EP, Green Award, EQASIS, HELMEPA, Paris MoU, Tokyo MoU, Viña del Mar, CDI, ITOPF etc…

INTERTANKO

• 1934International Tanker Owners Association

• 1967“Torrey Canyon”

• 1969TOVALOP and CRISTAL (ITOPF)

• 1970INTERTANKO is dead, long live INTERTANKO

• World wide presence

A little bit of history

• Assist and encourage our members to continuously improve

• Establish membership in INTERTANKO as a symbol of quality, i.a. through strict membership criteria:– Certified and implemented ISM system– All tankers classified by IACS member– All tankers entered in a P&I Club– Satisfactory oil pollution response plans and

insurance cover

Commitment to Quality

• Seek international solutions• Oppose unilateral legislation• Develop regional strength and influence

through regional panels and representation• Build relations with regulators and

monitoring authorities, as well as other industry associations and all links in the Chain of Responsibility

The Strategy

Chain of ResponsibilityChain of Responsibility

Working together

SHIPOWNER

SHIPYARDS

INSURERS

TRAFFICMANAGEMENT

CARGO OWNER

CHARTERER

PORTS & TERMINALS

CLASSSOCIETIES

FLAG STATES

Accidental oil spills from tankers 1970-2003

0

100

200

300

400

500

600

70

72

74

76

78

80

82

84

86

88

90

92

94

96

98

00

02

Tonne miles

0

2,000

4,000

6,000

8,000

10,000

12,000

Trade in Tonne-miles Source: Fearnleys)

Pollution tonnes Source. ITOPF

Tonnes

Development of tanker oil spills

Source: ITOPF 2003

0

5

10

15

20

25

30

35

1970 72 74 76 78 1980 82 84 86 88 1990 92 94 96 98 2000 2002

Spills per Year 10 Year average1970-79

24.2 spills per year on average

1980-898.9 spills per year

on average1990-99

7.3 spills per yearon average

Tanker incidents – improving record

0

100

200

300

400

500

78 80 82 84 86 88 90 92 94 96 98 00 02

CollisionFire/ExplFounderedHull & MachineryMisc WarGrounded

Oil into the Sea Annual Releases, best estimates

Average 1990-1999, '1000 ts

Natural seeps

Extraction of oil

Tanker accidents

Tanker operation

Other transportation

River and run-offs

Other shipping

Other consumption related

Source: National Academy of Science

47%

21%

11%

8%

3%

3%

99.99% of cargoes reach their destination without incident

0

100

200

300

400

500

78 80 82 84 86 88 90 92 94 96 98 00 02

CollisionFire/ExplFounderedHull & MachineryMisc WarGrounded

Exxon Valdez – Erika - Prestige

Erika: December 1999

• European Commission aggressive

• EU Ministers hesitant

• Wish to work through IMO

Prestige: November 2002

• European Commission aggressive

• EU Ministers even more aggressive

• No inclination to work through IMO

Erika: December 1999

• European Commission aggressive

• EU Ministers hesitant

• Wish to work through IMO

Prestige: November 2002

• European Commission aggressive

• EU Ministers even more aggressive

• No inclination to work through IMO

Other regulations in the pipeline

• Particularly Sensitive Sea Areas - PSSA

• Criminalisation of operators and crew

• ISPS – International Ship and Port Facility Security Code

• IOPC Funds

1986 1988 1990 1992 1994 199620

40

60

80

100

120

140

WS

Rate

s

First Gulf War

Tanker Market HistoryKey Events

Start of Delivery of 100VLCC Newbuildings

Ordered During Gulf War

Asian EconomicMiracle

Nearly 100 VLCCs TakenOut of Service for Floating Storage

Daily VLCC spot rates

0

10

20

30

40

50

60

70

80

902-J

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3

2-M

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03

2-M

ay-0

3

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03

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ep

-03

000 $

/day

Short-term disruptions

Strikes in Venezuela Congestion in Bosporus Political unrest in Nigeria Reconstruction in Iraq Japanese nuclear plant maintenance Weather delays in US Gulf and Baltic Sea Phase-out situation unclear Increased consumption in China

Cost elements - Gasoline price at the pump

0.0

1.0

2.0

3.0

4.0

5.0

USA Japan Germany UK

Long haul freight, $3/bbl

Marketing etc

Oil price $30/bbl

Tax

Cost elements making the: gasoline price:

$ per gallon

REALITY

REALITY

REALITY

Image Building

• Will help build an emotional barrier to negative press and inoculate against the effects of disaster

• Will help build international credibility and investor confidence

• Will increase political influence

• Will create a sense of commitment and belonging in an otherwise fragmented industry

Image Building

• Is it necessary?

• Is the industry ready?

THANK YOU