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Key Concerns Facing the Tanker Industry

Key Concerns Facing the Tanker Industry. Tanker Outlook 2006 Singapore 26 th September 2006 Tim Wilkins Regional Manager Asia Pacific. Introduction. 1. Perspective – Where we are today 2. Key Concerns (Challenges): - Environmental – the new ‘License to Trade’? - Technical

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Key Concerns Facing the Tanker Industry

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  1. Key Concerns Facing the Tanker Industry Tanker Outlook 2006 Singapore 26th September 2006 Tim Wilkins Regional Manager Asia Pacific

  2. Introduction 1. Perspective – Where we are today 2. Key Concerns (Challenges): - Environmental – the new ‘License to Trade’? - Technical - Human Element - Political

  3. Perspective • We can already say that 2006 will be a profitable year for tanker owners, certainly better than expected • With the exception of 2002, it has also been a good decade • Prestige – Two tier market / Maritime Safety Package • Venezuela strike – US oil form further a field • Bosporus Problems – Congestion / Night transits • Hurricanes in Gulf of Mexico – Oil Production Facility and Refinery closures • Nigeria and Iraq – Hostilities forcing market disturbance • Prudhoe Bay - Partial closure of North America’s largest oil field

  4. Perspective • Concerns from a market perspective, despite growing oil demand predictions: • US and Chinese market sustainability/slow-down • Reduced demand due to high oil prices • Increasing tanker fleet • But 2006 was better than expected: • Iranian Tanker Storage • Prudhoe Bay • Market becoming accustomed to special driving forces • Additional considerations for the future?

  5. Perspective Zero Tolerance Common Structural Rules Ship Recycling Revisions to MARPOL Annex II Human Element Oil Dependency Charterer Relations Air Emissions Ballast Treatment Systems Regional Regulation Seafarer Competency Criminality Zero Discharge

  6. Environmental Ship Recycling A New Mandatory Convention in 2009 - Improved Recycling Facilities Safety and Environmental Management Systems 40-60% rate reduction? - Requirements for Ship Owners Greenpassport and Hazardous Materials Inventory ($200,000) Gas-free / tank cleaning ($250,000?) Pre-cleaning?

  7. Environmental Ship Recycling Current lack of recycling activity

  8. Environmental Ship Recycling A New Mandatory Convention combined with increase in phase out tonnage…

  9. Environmental Ballast Water Management Treatment Systems Regional legislation and limited ability to comply Air Emissions MARPOL Annex VI Changes proposed, lower SOx (0.5%/1%/1.5%) more SECAs Regional requirements (SECAs), EU, California The next step; particulates, GHGs, VOCs Bunker Prices & Bunker Quality Cargo Generated Engine Generated

  10. Technical Common Structural Rules Robustness and Durability – before and after CSR? Vetting (Charterer relations) Technical Inspections Freight and Demurrage Terminals MARPOL Annex II Chemical tanker markets – CoF for ships loading IBC cargoes

  11. Human element • Seafarer Recruitment and Training • Concern over decreasing qualified crew • In-house training incentives • Canadian C-15 Bill • Seafarers to prove their innocence • Ship Sourced Pollution Directive • INTERTANKO while condemning illegal discharges, strongly objects to criminalising accidental pollution • Need clarity in law AND consistency with international law • Penalties should be proportionate AND have parity with other similar offences • (ashore) • Suspects must be treated fairly AND in accordance with basic human rights • States should comply with their obligations to provide reception facilities AND • Places of Refuge

  12. Political • Ship Sourced Pollution Directive • Destroys “no blame” cultures • Discourages openness and frank reporting • Deters salvors in circumstances when we need them most • Deflects focus for proper casualty investigation and denies benefits of same • Destroys and damages morale of seafarers and others • Dissuades new recruits and accelerates departure of experienced staff • Drives responsible people and companies from the business • Is this what the legislators and society are seeking ?

  13. Comments • Key Concerns for Tanker Operators – Key Concerns for Analysts? • “Market becoming accustomed to special driving forces” • - Driven by a need to change environmental and safety performance • Two-tier system – developing countries versus developed • Regional and International Regulation • Urge to move away from oil dependency

  14. www.intertanko.com thank you…

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