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API TANKER CONFERENCE NATURAL DISASTER RESPONSE AND RECOVERY

IMPACTS OF HURRICANES KATRINA AND RITA ON THE TANKER OWNER JOSEPH ANGELO JUNE 27, 2006. API TANKER CONFERENCE NATURAL DISASTER RESPONSE AND RECOVERY. CRUDE/PRODUCT SUPPLY LIGHTERING AFRAMAX TANKERS JONES ACT WAIVERS OSRO AVAILABILITY DEMURRAGE.

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API TANKER CONFERENCE NATURAL DISASTER RESPONSE AND RECOVERY

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  1. IMPACTS OF HURRICANES KATRINA AND RITAON THE TANKER OWNER JOSEPH ANGELOJUNE 27, 2006 API TANKER CONFERENCENATURAL DISASTER RESPONSEAND RECOVERY

  2. CRUDE/PRODUCT SUPPLY LIGHTERING AFRAMAX TANKERS JONES ACT WAIVERS OSRO AVAILABILITY DEMURRAGE

  3. KATRINA/RITA – A BLIP ON THE OIL PRICE TREND? $/bbl

  4. US CONSUMES 25% OF WORLD OIL GULF COAST HAS 47% OF US REFINING CAPACITY AREA HAS 30% OF US CRUDE OIL PRODUCTION US GULF REGION IS DELIVERY POINT FOR 50% OF US CRUDE AND PRODUCT IMPORTS CRUDE/PRODUCT SUPPLY

  5. US CRUDE PRODUCTION Lost oil production

  6. VLCC SPOT FIXTURES NUMBER Source: H. Clarkson

  7. CRUDE FREIGHT RATES USD/day

  8. US GASOLINE IMPORTS by 4 week averages – mb/d Mb/d

  9. PRODUCT FREIGHT RATES USD/day

  10. REPORTED CRIPPLING OF 2MBD OF REFINING CAPACITY CLEAN TANKER RATES FOR MEDIUM RANGE VESSELS BETWEEN EUROPE AND THE US ROSE FROM WS 250 TO WS 465 SOME SHIFT IN TRADE FROM DRY OBOs AND CRUDE CARRIERS TO CLEAN PRODUCTS VENEZUELA SAID IT WOULD SEND FOUR ADDITIONAL SHIPMENTS OF GASOLINE IN SEPTEMBER, TOTALLY OVER 960,000 BARRELS KATRINA EFFECTS ON OIL PRODUCTS

  11. NO MAJOR SHIPPING DISRUPTIONS EFFECT WAS GREATEST ON THE PRODUCT TANKERS SHOWED VULNERABILITY OF US OIL SUPPLY SYSTEM STRETCHED ALREADY TIGHT OIL MARKET TO ITS LIMITS GENERAL CONCLUSIONS ON SUPPLY

  12. GREATER IMPACTS FROM RITA SOME 3 DAYS OF DELAYS OFFSHORE DUE TO RESIDUAL SWELL FROM KATRINA RITA CAUSED POWER LOSS TO REFINERIES LOCATED IN PORT AUTHUR/BEAUMONT AND MISSISSIPPI RIVER AREAS UP TO 3 WEEKS AWAITING DISCHARGE IN PORT AUTHUR LIGHTERING

  13. IMPACT MAINLY ON MEXICO/VENEZUELA OIL SHIPMENTS TO US GULF COAST REFINERY OUTAGES RESULTED IN REDUCED DEMAND MEXICAN CRUDE WAS SENT TO EUROPE AND ASIA IN VLCCS OR SUEZMAX HOWEVER, OVERALL BULLISH TANKER MARKET OFFSET NEGATIVE FACTORS AFRAMAX

  14. TWO SEPARATE PERIODS – ONE AFTER KATRINA, THE SECOND AFTER RITA BLANKET WAIVERS GRANTED 5-6 CARGO SHIPMENTS - EACH WAIVER NO DISPUTE WITH FIRST WAIVER – PIPELINES DOWN US FLAG TANKERS AVAILABLE AFTER RITA IRS RULING – WAIVER MOVEMENTS WERE NOT SUBJECT TO US TAX JONES ACT WAIVERS

  15. AFTER KATRINA, OSRO ASSETS MOVED TO AREA FOR SPILL/RESPONSE INCIDENTS IMPACT ON AMPD AND MMPD COVERAGE MSRC AND NRC TOOK LEAD MMPD SOLVED WITH CG “BLESSING” THAT LOCATION OF ASSETS MET RESPONSE TIME AMPD COVERAGE WAS “SOLVED” WITH LOCATION OF NRC OSV IN THE AREA OSRO AVAILABILITY

  16. WEATHER RELATED HURRICANE DELAYS - NO MAJOR DISPUTES - HALF LAY TIME CONSEQUENTIAL DELAYS AFTER HURRICANE PASSED - TERMINALS NOT FULLY OPERATIONAL - CHARTERERS SEEKING HALF LAY TIME - OWNERS DISPUTE DEMURRAGE

  17. NO MAJOR SHIPPING DISRUPTIONS MINOR IMPACTS RELATED TO: - WAITING TIMES TO DISCHARGE - TEMPORARY INCREASE IN RATES - JONES ACT WAIVERS - CONCERN WITH MMPD/AMPD COVERAGE - RESOLVING DEMURRAGE DISPUTES CONCLUSIONS

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