THE PRESTIGE FACTOR

California Land CommissionPrevention First 2004

Dragos RautaINTERTANKO

. . . and the industry initiatives

The The International Association of Independent Tanker OwnersInternational Association of Independent Tanker Owners

INTERTANKOINTERTANKO

• 230 (+/-)230 (+/-) Members from 40 Members from 40 countriescountries

2,200 (+/-) tankers2,200 (+/-) tankers165 million dwt165 million dwt Average age: 11.8 yearsAverage age: 11.8 years

• 280 (+/-) 280 (+/-) Associate MembersAssociate Members

• 25 Staff / 8 Consultants25 Staff / 8 Consultants

Oslo

London

Washington

Singapore

M/T ERIKA 12/12/1999

M/T PRESTIGE 11/XX/2002

M/T IEVOLI SUN 10/31/2000

Tanker phase out - m dwt

0

10

20

30

40

50

60

70

MARPOL*

EU

OPA90

Phase out year

Phase out sche me s SH tanke rs 5-29,999

0

50

100

150

200

250

300

-02 03 04 05 06 07 08 09 10 11 12 13 14 15

MARPOL

EU

OPA90

Phase out year

No

Phase out schemes SH tankers 30-60,000 dwt

0

20

40

60

80

100

120

-02 03 04 05 06 07 08 09 10 11 12 13 14 15

MARPOL

EU

OPA90**

Phas e out year

No

Phase out schemes SH tankers 60-79,999

0

10

20

30

40

50

-02 03 04 05 06 07 08 09 10 11 12 13 14 15

MARPOL

EU

OPA90**

Phas e out year

No

Phase out schemes SH tankers 80-119,999

0102030405060708090

-02 03 04 05 06 07 08 09 10 11 12 13 14 15

MARPOL

EU

OPA90

Phas e out year

No

Phase out schemes SH tankers120-199,999

0

10

20

30

40

50

-02 03 04 05 06 07 08 09 10 11 12 13 14 15

MARPOL

EU

OPA90**

Phas e out year

No

Phase out schemes SH tankers 200,000 dwt +

020406080

100120140

-02 03 04 05 06 07 08 09 10 11 12 13 14 15

MARPOL

EU

OPA90**

Phas e out year

No

As by existing fleet on June 1, 2004

Fleet by hullpercentage

622

6074

83

9478

4940

2617

49

0

20

40

60

80

100

1991 1997 End 02 End 03 End 05 End 10

SH* share (%)

DH share (%)

End 05, all tankers built 1982 and earlier goneEnd 10, all tankers built 1987 and earlier gonetrading beyond 2010 s ubject to adm inis trations

* Including DB and DS tankers

Tanker deliveries, demolition, phase out m dwt

-20

-15

-10

-5

0

5

10

15

20

25

30

35

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

MARPOL* 43.7

Demolition

Deliveries 79.2

Net change

EU phase-out 86.2 m dwt*subject to administrations

TANKER DESIGN- more sophisticated design - common rules for tanker construction- North Sea wave spectrum- higher strength criteria- designed for at least 25 years

Ship Construction- quality of construction- monitoring - scheme for construction survey

Source: Thenamaris Ship Management

Suezmax tanker during construction

Maintenance

- different routines all good but . . - common threads between them - guideliens to set:

- the standard procedures- frequency to be applied

INSPECTION

• Height to climb 7 miles• Area to survey 3.2m sq. ft• Length of weld 750 miles• Length longitudinals 36 miles• Bottom area 115,000 sq. ft• 1 % pitting = 85,000 pits

People

the distances and surface which ship surveyors had to cover for inspection are enormous

INSPECTION

ACCESSHorizontal passageways in place of

vertical ladders on transverse webs

VIEW OF TYPICAL UNDER DECK WALKWAY LOCATED 2 METERS BELOW MAIN DECK COMPRISING OF EXTENDED LONGITUDINAL

VLCC cargo tank walkway

Notice oversized longitudinals as access walkway for inspection and the walk way platforms around the web frames

Oversized longitudinals

Walk way

LONGITUDINAL STINGER ON CL BHD AT 5.8m BELOW DECK FOR TYPICAL SUEZMAX

ADDITIONAL STRINGERS MINIMIZING HEIGHT AND GIVING EXTRA STRENGTH

UNDER DECK LONGITUDINAL BALCONY (WALKWAY) IN CARGO & SIDE BALLAST TANKS

Walkway in ballast tank using oversized longitudinal fitted with railing

Source: Thenamaris Ship Management

There is no higher investment than on the people who take care of the ships to ensure proper operation and proper maintenance

MANNING AND OPERATION

Unfortunately, we see that more and more Governments treat tanker officers as criminals

Publications – Industry Guides

• Guide to bunkering of ships for the purposes of Annex VI to MARPOL

• A Guide for correct entries in the Oil Record Book

• A Guide to Crude Oil Washing and Cargo Heating Criteria• Tanker Specification Awareness Guide

• A Guide to the Vetting Process, 5th. Edition

• A Guide to Tanker Charters (2001)

• Tanker Bills of Lading - A Practical Guide

• Awareness Guide to Incident Management and Media Response

Membership Criteria :

• All tank vessels classed with IACS society

• Owner with reputable P&I club

• Effective ISM Code

• Good Port State Control record•All INTERTANKO members’ tankers shall have a audited Emergency Response Service in place for the determination of stability and strength in a damaged condition.(1 January 2004)

Port State Control – detentions by year of build

Tanker detentions 2003 by year of buildcompared to total tanker fleet

6%

12%

17%

31%

17%

7% 8%7% 8%

13%15%

11%

18%

27%

0%

5%

10%

15%

20%

25%

30%

35%

<1970 1971-1975

1976-1980

1981-1985

1986-1990

1991-1995

1996-2003

tanker detentions

total fleet (1,000 dwt+)

Tanker incidents1978-03

0

200

400

600

800

1000

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

Grounded

War

Misc

Hull&Machinery

Fire/Expl

Collision

Source: LMIS, Informa, press, INTERTANKO

Number

US oil spills from tankers – extremely reduced

0

2

4

6

8

10

12

14

73 75 77 79 81 83 85 87 89 91 93 95 97 99 01

mill

ion

gal

lon

s

Port State Control – detentions

Port State Control detentions - 2003

156 150

1,760

179

1,574

20

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Tokyo MoU USCG Paris MoU

Num

ber

All ships

Tankers

Tanker industryTanker industryPERCEPTIONPERCEPTION

Tanker industryTanker industryREALITYREALITY

• The marine transportation of crude oil, oil and chemical products is essential to our everyday lives

• Shipping is environmentally friendly

• Shipping is efficient and reliable

• The tanker industry does have a good record – is responsible and is committed to continuous improvement

US CIF oil price* - USD

0

5

10

15

20

25

30

35

2000 2001 2002 2003 Max 03

Freight Costs

Fob SpotDubai

*Costs of oil transported from the Persian Gulf to LOOP

cost consumer can barely perceive on top of price at the pump

Places of RefugePlaces of RefugeA Solution Waiting to be ImplementedA Solution Waiting to be Implemented

Erika II Package – December 2000Erika II Package – December 2000

Requires Each Member State to Draw up Requires Each Member State to Draw up Emergency Plans for Hosting Ships in Emergency Plans for Hosting Ships in Distress in Places of RefugeDistress in Places of Refuge

LIABILITY and CRIMINALISATION

Increasing liabilities of shipowners & others

Extended criminalisation

Penal Sanctions

led by politicians or by the public ?

ACCIDENT INVESTIGATION

• the value of learning from failures and accidents cannot be over-emphasised

• rigorous and comprehensive accident investigations

• in-service experience of structural, mechanical and human failures, and near-miss reporting in ship operations, should be the norm . . . . .

• without the assignment of blame, and in as free and open a manner as is possible

We know but not mind been watched . .

. . although we would wishthe perception be closer tothe reality of all conditions of trade . .

M/T LIMBURG

Ships must be built, maintained and manned for hurricanes that leave shore sites in ruins!

. . and the terrible dangers to which ships and seafareres are exposed.

. . . . pollution . . . . but from unseen sources.

The U.S. Environmental Protection Agency (EPA) estimates that American households generate 193 million gallons of used oil annually, some of which is improperly disposed. The EPA estimates that households improperly dump the equivalent of 17 Exxon Valdez oil spills, every year!The California Office of Spill Prevention and Response Press Release, June 2003

• http://www.dfg.ca.gov/ospr/organizational/admin/news/2003news/june26-2003.pdf

Responsible parties working together......Responsible parties working together......

SHIPOWNER

SHIPYARDS

INSURERS

BANKS &INVESTORS

CARGO OWNER

CHARTERER

PORTS & TERMINALS

CLASSSOCIETIES

FLAG STATES

PARTNERSHIP:Working closely with regulators and legislators

Thank you !

Safe Transport, Clean Seas and Free Competition

www.intertanko.com