saudi arabia 2010 maritime humoud a. al-ajlan ceo, nscsa maritime saudi arabia 2010 1 june 2010...

SAUDI ARABIA 2010Maritime

Humoud A. Al-AjlanCEO, NSCSA

Maritime Saudi Arabia 20101 June 2010

TANKERS STRATEGY & ECONOMICS

The National Shipping Company of Saudi Arabia (NSCSA)


CONTENTS

Contents Slide

Structure & Growth Strategy 2-4

Tanker Market Outlook 5

-Tanker Demand 6-9

-Tanker Supply 10-14

VLCC Earnings, Orderbook & Newbuilding prices 15

Current Tanker Owners 16

Tanker Owners’ Newbuilding 17

Tanker Outlook Summary 18-19


The National Shipping Company of Saudi Arabia (NSCSA)

1


ORGANIZATION STRUCTURE

2

CHEMICAL TRANSPORT

GENERAL CARGO

IS ORGANIZED IN 4 BUSINESS

UNITS

SHIPMANAGEMENT

OIL

and

GA

S

OIL & GAS


PROFITABLE OPERATION

1672

2595

1703165116021638

1446

961

362

317

521565 451490750

156438428 441 423

369

0

500

1000

1500

2000

2500

3000

2003 2004 2005 2006 2007 2008 2009

Revenue

Op.Income

Net Income

SA

R M

illi

on

s

3


42584485 4834

5997

7797

981910,339

0

2000

4000

6000

8000

10000

12000

2003 2004 2005 2006 2007 2008 2009

Total Asset

SA

R M

illio

ns

CONSOLIDATED TOTAL ASSETS

4


Tanker Market Outlook

5


80.0

83.0

86.0

89.0

92.0

95.0

2007 2008 2009 2010 2011 2012 2013 2014 2015

Million Barrels per Day

Source: IEA Oil Market Report, November 2009 & February 2010, US EIA AEO (Early Release) December 2009, McQuilling Estimates

Recent forecasts suggest 1.23 million barrels per day increase in 2010 over 2009

2008 demand levels will not be exceeded until 2011 but…

Recent IEA estimates an increased demand in 2010 based on improved IMF outlook (+1.6 million barrels per day)

TANKER DEMAND

Oil Demand Recovery

6


TANKER DEMAND

Crude 2009 Tanker Demand

57.2% of tons of crude and residual product cargo demand transported by tankers

This marine fraction is slowly increasing with time

2009 marked the first year more cargo was transported by Aframax tankers than VLCCs

Aframax 898 million tons VLCC 878 million tons

Balance 20 million tons

VLCC still dominates on ton-mile basis

1,407 billion ton-miles5,666 billion ton-miles(4,259) billion ton-miles

Non-Seaborne Transport,

42.8%

Panamax, 3.3%

VLCC, 20.7%

Suezmax, 12.3%

Aframax, 21.0%

7


TANKER DEMAND

Crude Tanker Demand

Percent Change

Trading patterns for VLCCs are evolving from a West-centric to East-centric configuration - This effect impacts on tanker supply, not demand measured in tons, due to longer transport distances given this shift in the crude supply origin

(30%) (20%) (10%) 0% 10% 20% 30% 40% 50%

Middle East / Far East-SE Asia

Middle East / Carib-USG-USAC

Middle East / USWC

Middle East / Europe

West Africa / Far East-SE Asia

West Africa / Carib-USG-USAC

West Africa / India

Carib-Samerica / Far East-SE Asia

Other

8

2009 trade routes +/- % vs. 2008


TANKER DEMAND

Looking forward: A change in the trade routes for VLCC tankers indicates that only limited future increases from long-haul trades due to limits on increased production (e.g. from Venezuela, Mexico, N.Sea. Russia to the East)

Analysts suggest that the crude oil tanker sectors will remain demand challenged for the next few years - expected ton-mile demand growth to average about 1.5% annually

Shortest 20 Trades* 704 billion ton-miles

* 12% of total cargo* Average distance 3,038 nm

Longest 20 Trades* 5,132 billion ton-miles* 88% of total cargo* Average distance 7,554 nm

CrudeTanker Demand- VLCC

VLCC: 1.9% SUEZ: 1.2% AFRA: 1.2% PANA: 1.5%

9


TANKER SUPPLY

Tanker OrderbookContracting (All Tankers)

0

10

20

30

40

50

60

70

80

90

100

VL

CC

SU

EZ

AF

RA

LR

2

PA

NA

LR

1

MR

2

MR

1

2008 2009New Orders

After a record peak in contracting of new tankers in 2008, new build orders have declined.

New orders effectively ceased during the first part of 2009.

Overall, a total of 112 orders for tankers 27,500 Dwt and above were recorded in 2009 compared to 270 in 2008, a decline of 64%.

Q1 2010 ship yards have lowered prices and are again attracting orders.

10


TANKER SUPPLY

Tanker OrderbookDeliveries

1

11

107

18

35

60

29

63

0

20

40

60

80

100

120

VL

CC

SU

EZ

AF

RA

PA

NA

LR

2

LR

1

MR

2

MR

1

2001-2007 Deliveries

2010 Deliveries

Number of Vessels

86

66

47

33

15

90

1614

0

20

40

60

80

100

120

VL

CC

SU

EZ

AF

RA

PA

NA

LR

2

LR

1

MR

2

MR

1

2001-2007 Deliveries

2011 DeliveriesNumber of Vessels

11

Two successive year with record deliveries


TANKER SUPPLY

Tanker Orderbook

The total order book is estimated at 899 tankers of 27,500 Dwt and above (excluding chemical carriers)

This orderbook are being built in 65 shipyards, with Korean, Chinese and Japanese yards comprising 90% of the orders

Korean shipyards hold just over half of tanker orders; Chinese yards 22% and Japanese yards 16%

Estimates for VLCC deliveries, project only a small number of cancellations and incorporate current assumptions on delivery delays

Deliveries

12


VLCC

Additions & Removals Current fleet 529 ships

41 VLCC remaining to deliver 2010 some “slippage”/delays expected into 2011.

84 SH VLCCs still trading while scrapping and removals of SH VLCCs have intensified in 2010 and could balance deliveries.

A massive delivery of 86 new builds for 2011.

Poor freight markets in 2011 would accelerate recycling of remaining SH VLCCs. However, impact of removal of remaining SH ships is expected to have minor impact on freight markets.

TANKER SUPPLY

McQ

13


TANKER SUPPLY

Other Supply Factors

Oil storage has occupied (removed from trading) between 30-40 ships – current May/2010 figures suggest 30 ships employed in storage including 18 NITC ships

Contango priced oil markets drive increases in VLCC employed for floating storage – we anticipate this trend to continue to occur in 2010

High fuel prices reduce fleet performance speed reducing supply of ships

14


180m

300

300k

160m

250

250k

140m

12

0m

200

200k

80m

150

150k

60m

100

100k

40m

20

m

50

50k

0

2005 2006 2007 2008 2009 2010

VLCC Newbuilding Price USD Mn Orderbook Number VLCC Average Earnings $/Day

VLCC EARNINGS, ORDERBOOK & NB PRICES

Price $Mn Numbers Vessel Rate $/Day

15

Record number of ships ordered at record prices


CURRENT TANKER OWNERS

Number of owners

Total Ships

Clarksons May 2010

5

158

3

52

5

58

13

106

80

171

0

20

40

60

80

100

120

140

160

180

Owner with 20+Vessels

Owners with 16-20Vessels

Owners with 11-15vessels



16


80

98

16

0

10

20

30

40

50

60

70

80

90

100

110

Owners with 06-10 vsls Owners w ith 0-5 vsls Unknown Owners

TANKER OWNERS’ NEWBUILDING

Clarksons May 2010Current Owners

New OwnersTotal Ships

3156

26

16

17


TANKER OUTLOOK – SUMMARY

Shock of the financial crisis is fading but tanker freight markets arenervous.

Fleet capacity is rising sharply with only mild recovery of oilDemand.

Freight “crisis” easing but asset “crisis" not over yet.

Financial stress on owners, banks, and ship yards has causedincreasing downward pressures on asset prices.

Asset prices have turned upwards recently on recovery of freightmarkets and speculative buyers attracting IPO public market investors.

18


The 2010-2014 period likely to be dominated by “Net Fleet Growth” picture and the negative influence of growing tonnage supply across most tanker sectors.

As a result of tonnage supply exceeding demand, we expect rates in most sectors to soften from 2010.

Operating returns would be further eroded if bunker oil prices continue to increase.

Call on OPEC oil production increases beyond 2011 and year-on-year demand growth suggests earnings will return by 2012-2014 to positive results.

TANKER OUTLOOK – SUMMARY

19


The National Shipping Company of Saudi Arabia

Thank you for your

attention!

saudi arabia 2010 maritime humoud a. al-ajlan ceo, nscsa maritime saudi arabia 2010 1 june 2010...

Documents