DPP INSA CHAIRMAN Johnson W. Sutjipto

1. I N S A INDONESIAN NATIONAL SHIPOWNERS’ ASSOCIATION INVESTMENT OPPORTUNITY IN SHIPPING AFTER THE ISSUANCE OF PRESIDENTIAL INSTRUCTION NO. 5 OF 2005 AND THE ENACTMENT OF LAW NO. 17 OF 2008 ON SHIPPING INDUSTRY DPP INSA CHAIRMAN Johnson W. Sutjipto INSA-P&I CLUB Investment Opportunity

2. SUBSTANTIAL GROWTH IN THE NEXT DECADE INTERNALLY Archipelago Country Large Population Base Emerging Middle Income Group Substantial Natural Resources INSA-P&I CLUB Investment Opportunity

3. GOVERNMENT REGULATION Cabotage Principle Presidential Decree No. 5 Year 2005 issued on 28 March 2005 also known as INPRES 5 Followed by Transportation Ministry Decree KM 71 Year 2005 INSA-P&I CLUB Investment Opportunity

4. ROAD MAP CABOTAGE FOR 13 TYPES COMMODITIES OF DOMESTIC CARGO + OFFSHORE ACTIVITIES Sumber : Ditjen Perla

5. LEGAL BASIS UndangUndang “Pelayaran” No. 17 Tahun 2008 Shipping Law No. 17 Effective 7 May 2008 INSA-P&I CLUB Investment Opportunity

6. Mandatory Flag Requirements UU No 17 article No 8 : ALL DOMESTIC SEA TRANSPORTATION MANDATORY TO BE CARRIED BY INDONESIAN FLAGGED VESSELS ALL FOREIGN FLAGS VESSELS ARE NOT ALLOWED TO CARRY ANY DOMESTIC CARGO WITHIN INDONESIAN WATER INSA-P&I CLUB Investment Opportunity

7. A. DOMESTIC SEA TRANSPORTATION Notes : - Data Per 3rd Quarter 2008 - From DitjenPerla INSA-P&I CLUB Investment Opportunity

8. B. IMPORT/ EXPORT SEA TRANSPORTATION Notes:- Data Per 3rd Quarter 2008 - from DitjenPerla INSA-P&I CLUB Investment Opportunity

9. ESTIMATED SEA FREIGHT DEFICIT TO FOREIGN VESSELS If based on sea freight of USD 20 / mTONfor domestic trade and sea freight of USD 50 / mTonfor import/ export trade, we get: Domestic Freight: Import/ Export Freight: *) Data per 3rd Quarter 2008 INSA-P&I CLUB Investment Opportunity

10. New Coal Powered Power Plants Downstream : Oil and Gas Upstream : Oil and Gas All the above requires a substantial number of vessels for their logistic transportation needs SUBSTANTIAL GROWTH IN THE NEXT DECADE FOCUS : ENERGY SECTOR INSA-P&I CLUB Investment Opportunity

11. COAL POWER STATION Sumber : PT. PLN. INSA-P&I CLUB Investment Opportunity

12. COAL POWER STATION Sumber PLN INSA-P&I CLUB Investment Opportunity

13. COAL POWER STATION Sumber : DitjenHubla INSA-P&I CLUB Investment Opportunity

14. Requirement & Availability For Coal Transpotation Vessels and Barges Vessels Requirement 21 units • Requirement13 units • Available11 units 2008 2010 Barges Requirement 800sets • Requirement700sets • Available 600 sets 2008 2010 Sumber : DitjenHubla & DPP INSA INSA-P&I CLUB Investment Opportunity

15. OIL and GAS : Downstream USAHA HILIR (DOWNSTREAM) PENGOLAHAN (REFINERY) PENGANGKUTAN (TRANSPORTATION) PENYIMPANAN (STORAGE) NIAGA (TRADE) INSA-P&I CLUB Investment Opportunity

16. LIST OF VESSELSCHARTERED BY PERTAMINA Sumber : Pertamina INSA-P&I CLUB Investment Opportunity

17. OIL and GAS : Downstream CHARTER HIRE PAID BY PT. PERTAMINA • National Flag : 32% (79 Vessels) • Foreign Flag : 68% (56 Vessels - FundsOutflow) • Total yearly charter paid: US$ 402 Million • Yearly Outflow : USD 274 Million INSA-P&I CLUB Investment Opportunity

18. USAHA MINYAK DAN GAS BUMI OIL and GAS : Upstream USAHA HULU (UPSTREAM) EXPLORASI (EXPLORATION) EXPLOITASI (PRODUCTION) INSA-P&I CLUB Investment Opportunity

19. Vessels Required In The OIL and GAS Upstream Sector and Investment Value E: Exploration P: Production / Eksploitation INSA-P&I CLUB Investment Opportunity Sumber : DPP INSA

20. ….continue E: Exploration P: Production / Exploitation INSA-P&I CLUB Investment Opportunity Sumber : DPP INSA

21. National Flag : 25% (573 Vessels) Foreign Flag : 75% (52 Vessels - Funds Outflow) Total yearly charter paid: US$ 1.5 Billion Yearly Outflow : USD 1.125 Billion OIL and GAS : Upstream CHARTER HIRE PAID BY OIL COMPANIES Percentage of Charter Hire based on Flag 25% Foreign Flag National Flag 75% Sumber : BP MIGAS INSA-P&I CLUB Investment Opportunity

22. VESSEL MARKET PRICES ■ Vessel Prices is at its lowest in the last few years ■ Huge number of new buildings at a substantial discount ■ Perfect time to invest ! INSA-P&I CLUB Investment Opportunity

23. CHALLENGE • Funding is not so readily available during this period after the global economy crisis • To Ractify Arrest of Ship Convention • Limited quality and quantity of human resources on board the vessels INSA-P&I CLUB Investment Opportunity

24. CHALLENGE 4. Need More Support From Shipper : • Indonesian Export generally sold at FOB term • Indonesian Import generally bought at CIF term • Limited Human Resources knowledge on “BOOMZAKEN” related to L/C, Insurance, Customs and Export & Import Trade 5. Secure more long term contract between end user / cargo owner and the Indonesian Shipping Company. Much needed long term contract on the following commodities such as: • Oil & Gas, Coal, CPO and Offshore Activities Long term contract can be used as guarantee for financing from banking for shipping companies fleets expansion INSA-P&I CLUB Investment Opportunity

25. INSA’S COMMITMENT • INSA available to assist and provide necessary • information regarding: • Existing Regulations • Development of National Fleet • Investment Opportunity Questions may be directed via email to INSA Email address: info@insa.or.id INSA-P&I CLUB Investment Opportunity

26. THANK YOU MERAH PUTIH PASTI BISA ! What we need is COMMITMENT !!! INSA-P&I CLUB Investment Opportunity