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China Logistics 20 October 2005

China Logistics 20 October 2005. Erik.Ranheim@INTERTANKO.com Manager Research and Projects Oil Import to China – In the light of the general Oil & Tanker market. Oil Import to China seen in the Light of General oil & Tanker Markets.

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China Logistics 20 October 2005

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  1. China Logistics 20 October 2005 Erik.Ranheim@INTERTANKO.com Manager Research and Projects Oil Import to China – In the light of the general Oil & Tanker market

  2. Oil Import to China seen in the Light of General oil & Tanker Markets • Tanker Fleet Development& the Phase out of Single Hull Tankers • The development of Tanker Demand& the Main Tanker Trades • Freight Rate Development • Tanker Market Prospects

  3. Tanker Demand…

  4. Trade development 1996-2004 Ship supply has caught up % Source: Clarkson Research

  5. China and the Global picture Litre per capita per day

  6. China Crude & product net imports 1999-2006 mbd Source: IEA

  7. China Crude & product net imports 1999-2006 mbd Source: IEA/BP

  8. Tanker trade development 1972-2006 Billion tonne-mile transported Source: Fearnleys/INTERTANKO

  9. Seaborne oil trade- crude oil plus products1970-2004 Bn tonne miles mbd Source: Fearnleys/BP

  10. Tanker trade development 2000-2005 Liftings to China m tonnes 39% 34% 36% 59% 63% 60% Source: Fearnleys/INTERTANKO

  11. VLCC fixtures Total no East 103 no Source: Clarkson

  12. Oil consumption and refinery capacity World China mbd mbd

  13. Tanker fleet development

  14. Tanker contracting by segment m dwt

  15. Sales for decommissioning tanker and combined carriers No 19 m dwt m dwt 4.1 m dwt 10 months

  16. Tanker fleet development m dwt number

  17. Tanker fleet development m dwt number

  18. Phase out SH tankers VLCCs470 units – 170 SH/DB/DS - 97 on order No Phase outyear

  19. Phase out SH tankers Suezmaxes325 units - 73 SH/DB/DS – 65 on order No Phase outyear

  20. Phase out SH tankers Aframaxes650 units – 180 SH/DB/DS – 160 on order No Phase outyear

  21. Phase out SH tankers Panamaxes270 units – SH/DB/DS 96 – 110 deliveries No Phase outyear

  22. Tanker fleet development m dwt

  23. Tanker newbuilding prices m dwt number

  24. Breaken even rate and priceBreak even normal level in a perfect market $ per day • * 8% required rate of return • * Operating costs $7,00 per day 2% increase annually. • * $ 1m, 2m, 3m, 4m ESP costs • $10 m residual value • Average rate • Ras Tanura Y’hama/price • 1999 13,397 $68.3 • 2000 54,497 $72.0 • 2001 32,852 $74.8 • 2002 19,655 $65.7 • 2003 41,558 $65.4 • 2004 91,872 $90.8 • 2005 41,290 $119.2 $ 43,300 $ 42,420 $ 36,560 $ 30,670 $ m

  25. Freight market

  26. Middle East oil production and VLCC freight rates AG-East mbd $ per day

  27. Freight market $ per day Cycles/Wilde cards • Cyclical, • Traditionally driven by supply side- overordering • Since 2001 disruptions and tight supply oil supply • Hurricans • Strikes (Venezuela) • Political unrest, Iraq, Nigeria’ • Congestion (Bosporous) • Phase out (also political?)

  28. Oil price and freight market $/bbl

  29. Conclusion • Supply increase of 6-7% • Watch world economy – oil demand • Cyclical - abnormal with three high peaks in a row .., but • Great uncertainty, dramatic things may happen - therefore keep your options open

  30. now is NOTthe time to take this position

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