Vetting Oil Tanker

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Seminario Vetting ConfitarmaMarine Safety and Vetting

Rome

07/11/2011

Kuwait Petroleum International


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Agenda

About Kuwait Petroleum International

KPI Vetting Department

OCIMF objectives and guidelines

Ship quality chain of responsibility and reasons to go for quality

Management of an increasing risk

How the risk is evaluated

How Oil Majors vet

Where are the shipping risks

Arriving at the decision

Conclusions & Questions


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About Kuwait Petroleum International

Kuwait Petroleum International is the international marketing arm of Kuwait Petroleum

Corporation.

Our business encompasses the marketing and sales, research, refining and manufacturing of

petroleum products, predominantly in Europe and the Far East.

Our activities are underpinned by strong ethical values that demonstrate the greatest concern

for safety and care of the environment.

KPI Markets

Aviation

RoadDiesel

Retail

Direct

Lubricants


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KPI European OUs & Terminals

Kuwait Petroleum Italia

Kuwait Petroleum Spain

Kuwait Petroleum Aviation

Kuwait Petroleum Europoort

Kuwait Petroleum BelgiumKuwait Petroleum Denmark

OK Q8Genova

Livorno

Milazzo

Venice

Koper

Le Havre

Avonmouth Rotterdam

Sundsval

Halmstad

Goteborg

Vastervick

StochkolmAntwerp

Arhus

Aalborg

Esbjerg


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KPI Vetting Department

All vessels offered to KPI Affiliates for loading or discharging of crude oils,feedstocks, intermediates, products and any hazarous chemicals are required to be

in compliance with the KPI Vessel Acceptance Policy (and Marine Minimum Safety

Criteria)

KPI has elected to provide centralised vetting activities on behalf of its Affiliates.

Operating guidelines in the Vessel acceptance procedure to ensure that such

objective is met in the most effective way by ensuring that all vessels calling at a of

KPI terminal, including the ones on behalf of third parties, always meet the

standards of quality and safety laid down by KPI


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Vessel screening process

A vessel screening is a process of examination and evaluation referring to the performance

background of the vessel as resulting from following databases:

Ship Inspection REport (SIRE) system. Oil Companies being part of OCIMF (Oil Companies

International Marine Forum) share via the joint database reports of inspections carried out

on vessels. Such inspections are performed by OCIMF accredited inspectors and are carried

out according to a standard format and a uniform inspection procedure developed by the

Organisation and periodically reviewd. Such standards are settled in the Vessel InspectionQuestionnaire (VIQ)

Cemical Distribution Institutereports database (for Chemical and gas carriers)

Lloyds List. An intelligence online service offering information on vessels, Companies, Port

State Controls, vessel incidents, casualties, detentions as well as credit reports

KPI Vetting database. History of performance records with the KPI Affiliates

Being Kuwait Petroleum member of OCIMF, the evaluation process is based on a mixed

approach: screenings + inspections performed by our contracted inspectors


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About OCIMF mission and objectives

Helping to improve the safe and environmentally responsible operation of oil tankers and

terminals since 1970

Being the foremost authority on oil tankers, terminals and offshore suport vessels

Promoting continuous improvement in standards of design and operation

Standards. To identify safety and environmental issues facing oil tanker, barge, terminal and

offshore marine operations and develop and publish recommended standards that will serve

as technical benchmarks

Regulatory. To contribute to the developoment of international conventions and regulations

that enhance the safe construction and operation of oil tankers, barges, offshore support

vessels and terminals, working with the IMO and other regulatory bodies, both regional and

national

Enforcement and Consultation. To encourage Flag States, Port States and Classification

Societies in their nforcement of international conventions and regulationsPromotion. To actively promote OCIMFs role in the development of safety and

environmental guidelines and recommendations, harmessing the skills and experience of

OCIMF members and holding industry events addressing the issues

Promulgation. To facilitate access by charterers and authorities to data on tankers, barges

and offshore support vessels relating to safety and pollution prevention, through the SIRE


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ShipsQuality: The Chain of Responsibility

Enforcement of Regulations is made by IMO and

Flag States

Responsibility to ensure compliance with national laws and regulations

Implement IMO Conventions

Establish an Administration to conduct surveys, casualty investigations and issue safe

manning documents, seafarerscertificates, etc..

Port State Control

Provide for control procedures on ships calling at foreign ports (SOLAS 74, Loadline 66,

MARPOL 73/78Role extended to cover operational requirements in addition to some flag states

responsibilities

Port States required to inspect 25% of all ships calling at their ports (50% in Asia/Pacific

Region)

Classification Societies

Ensure ships are built to adequate strength and maintained to meet Class Rules

Increasingly delegate responsibilities from Flag States to conduct statuory surveys and issue

cerfificate

Adherence is made by

Ship Operators

Hold prime responsibility for ensuring that shipsquality, seaworthiness, Manning levels and

competence meet IMO Convention requirements


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Reasons to go for quality and risks

Why

A single pollution incident can have devastating consequences to even the largest Oil

Company

Public opinion

Political pressure

Financial liability

Commercial realityInfluence of tanker casualties

Increase the knowledge of actual vessel condition

The Shipping risk

Owned vessels

- Least risk

- Greatest controlTime Chartered Vessels

- Better than spotbut fails short of owning

Voyage Spot Chartered Vessels

- Most voyages

- Greatest risk

- Least knowledge of quality by the charterer


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Risk management

How do Oil Majors evaluate the risk?

Through proper risk assessment teams: Vetting departments

How do Oil Majors evaluate vet?

All Oil Majors have theri own quality assurance schemes

Schemes vary due to company size, scope and diversity of activities, attitude to marine risks

and use of real time information and the quality of analysis

Some may use 3 rd party Vetting

All companies input/extract reports from OCIMF database

Determination of vessel utilisation is solely at each companysdiscretion

Liability concerns dictate how individual companies approache the vetting issue

Increasing use of auto-vetting


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Arriving at the decision

Combination of some or all elements

Acceptance matrixGuidelines/Minimum Marine Safety Criteria

Substantiated positive information

The SIRE Inspection Report

A decision to utilise a particular vessel means that the risk has been analysed and

deemed to be acceptable


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Conclusion & Questions

What is a suitable SIRE report (age, conditions, product)?

Do you access CDI?

Do you compare with other Majorsvetting policy?

How often do you inspect T/C or COA vessels?

Do you consider INCOTERMS in your evaluation process?

Do you screen vessels each and every time they are nominated for employment?

Do you rate vesselsperformance?

Is other Majorsapproval needed for your vessel approval?


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Thank you for your attention

Vetting Oil Tanker

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