the eighth city of london biennial meeting
TRANSCRIPT
The Eighth City of London Biennial Meeting
INTERTANKO 2016
17th November 2016 IMO, London
Dr. Nikolas Tsakos
Leading the way; making a difference
INTERTANKO evolution
•1970 establishment of INTERTANKO in Oslo
1970s/1980s
INTERTANKO’s role mainly commercial. Protecting owners’ interests in the aftermath of the ‘73 – ‘79 oil crisis
1990s/2000s OPA 90
INTERTANKO primarily focused on technical, operational and regulatory issues following the “EXXON VALDEZ” incident and OPA90 implementation
2015/2016
INTERTANKO Members keep valued technical/operational/ regulatory work and add back focus on commercial issues and sustainabilty
2016
INTERTANKO represents more than two thirds of the independently-owned tanker fleet and gas fleet
Leading the way; making a difference
INTERTANKO 2016a GLOBAL association with Headquarters in London and representatives in all shipping hubs
a FORUM where Members meet to share information and best practice with each other and the wider industry. Close cooperation with oil companies through OCIMF quarterly meetings
an ADVISOR for Members providing guidance on issues affecting their interests both commercial and technical close cooperation with class IACS and flag states
the VOICE that speaks on behalf of and acts for independent tanker owners in the international fora. Active member in IMO close cooperation with ICS, BIMCO, INTERCARGO and Roundtable participants
INTERTANKO MEMBERS... Lead the continuous improvement of the tanker industry’s performance
Strive to achieve the goals of:
YES safe operationsYES quality service YES SUSTAINABLE RETURNS
NO casualtiesNO pollutionNO detentions
Safety Seafarers Environment OperationsCommercial
Sustainability
Tanker design/construction
- Enforcement of CSR- Classification standards
Machinery/ equipment- Lifesaving appliances- Classification standards
Fuel- Quality- Sampling- Switching operations- LNG, Biofuels- Alternate fuels
Cargo- Properties- Safe tank entry- Gas detection- Inert gas- Biofuels
Fair treatment - Criminalization- Shore access/visas- Medical treatment
Crew competence- Training requ’mnts
(ECDIS, BWM)- Tanker Officer
TrainingStandards (TOTS)
- Officer matrix
Seafarer welfare - Accomm’n. space - Cadet berths- Fatigue/rest hours
Emissions to water- Ballast water - Reception facilities& waste minimization- Hull fouling man’t
Emissions to air- SOX, NOX, VOC
MARPOL Annex VI - Greenhouse gas
emissions- Energy efficiency- Monitoring,
Reporting &Verification (MRV)
Ship Recycling
EPA VGP- Recordkeeping- Monitoring
Vetting & Risk Assessment
Ports- Port state control- Ports & Terminals- Offshore Ops
Maritime Security- Piracy- Sanctions
Safe navigation- ECDIS- Pilotage- eNavigation
Chemical tanker ops
Gas tanker ops
Refugees
Payment performance
Charter party terms &Documentation
Worldscale
Insurance- Compensation- Liability limits- Reinsurance
Anti-corruption
Main Focus Areas
2016 Membership
0
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> 50 25-49 15-24 10-14 5-9 < 5
Numbertankers
Nr. tankers
16 Members
66Members
41 Members21
Members
21 Members
48Members
INTERTANKO represents more than two thirds of the independently-owned tanker fleet
20th Annual General Meeting
Leading the way; making a difference
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2010 2011 2012 2013 2014 2015 2016
Others
Singapore
Norway
Russia
Luxembourg
Malaysia
Bahamas
Cyprus
Switzerland
Hong Kong
Japan
Greece
Countries+ 5 m dwtin 2016included
m GT
INTERTANKO membership by reg. country
Leading the way; making a difference
North American Panel
Chairman: Oscar Pinto
Valles Steamship (Canada)Secretary : Joe Angelo
European Panel
Chairman: Dr. Stephan Polomsky
Claus-Peter OffenTankschffreederei
Secretary : Phil Belcher
Latin American Panel
Chairman: Carlos Juan Madinabieta
Tradewind TankersSecretary : Joe Angelo
Hellenic Mediterranean
PanelChairman:
Vasilis Bacolitsas, Sea Pioneer Shipping
Secretary : Bill Box
Asian PanelChairman:
Kenneth Koo
Valles Steamship
Secretary:
Tim Wilkins
5 Regional Panels
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TD3 freight development
TD3
MAKE TANKER RATESGREAT AGAIN
Future
Leading the way; making a difference
Virtual NB Delivery Center
KARAOKE
KARAOKE
Round Table Topics for Coordination & Cooperation
Piracy
Greenhouse Gas Emissions
Ballast Water Management
Marpol Annex VI
Fair Treatment (& Criminalisation)
Places of Refuge
Reception Facilities
Corruption (& PSC)
Leading the way; making a difference
INTERTANKO’s strength in its Committees:
Human Element in Shipping (best practices, safety cultures, competency-based training, holistic approach to human element in regulation)
ISTEC Safety & Technical (cooperation with tanker safety bodies, representation/intervention at IMO, advice, policy drafting)
Bunker Sub-Committee (guidance, protection, intervention, information)
Vetting (look after member interests with dialogue with PSC MoUs, OCIMF-SIRE/CDI, reduce multiple inspections, intervention when unfair observation/detention, promote recognition for owners’ programmes)
Environmental (developing proactive environmental policies at IMO and elsewhere, dialogue with green groups)
Gas Tanker (Promoting and protecting tanker owner interests, promote best practice, provide expertise)
Chemical Tanker (promote/protect interests of chemical tanker owners)
Insurance & Legal (further tanker owner interests re insurance/liabillity, resources for Council)
Commercial/Documentary/Worldscale/Chartering (chartering practice, freight/demurrage collection, slow erosion of c/p terms and clauses, dialogue with Worldscale)
Leading the way; making a difference
INTERTANKO 2016
New growth into gas tanker membership
•New focus back into commercial issues
Leading the way; making a difference
Gas - INTERTANKO and SIGTTO
INTERTANKO can address and provide support on commercial (charter party, documentary), vetting, human element, legal, claims, safety and operational issues affecting all aspects of gas tanker operations and chartering
INTERTANKO provides operational support and advice in real time (with a proven track record of excellent speed of response and responsiveness to Member’s issues, e.g. Chinese domestic ECA issue etc.)
INTERTANKO’s activities and advice are based on a community of tanker owner experts firmly focused on independent owners’ needs. Input and support also from our associate member community including energy company and terminal interests, class, flag etc, But tankers owners drive the agenda.
SIGTTO remains engaged in its original purpose: to specify and promote high standards and best practices among all industry members throughout the world, and hence to maintain confidence in the safety of the liquefied gas industries and maintain their acceptance, by society at large, as responsible industrial partners.
Leading the way; making a difference
Biggest technical issue facing gas tanker owners:
The new International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk (IGC Code).
INTERTANKO was part of these discussions during IMO’s recent Maritime Safety Committee (MSC) session (MSC 96).
• MSC 93 adopted amendments to the IGC Code by resolution MSC.370 (93). The amendments to the IGC Code entered into force 1.1.2016.
• At MSC 96, Norway proposed that the new IGC Code be re-examined to remove inconsistencies, omissions and ambiguous wording, to ensure a consistent implementation.
• Many delegates raised concerns and opposed Norway’s proposal. However, all agreed that there are inconsistencies and ambiguities that need to be addressed.
• MSC 96 agreed to refer the IGC Code to the Carriage of Cargoes and Containers (CCC) Committee and address any proposals, inconsistencies, and ambiguities through unified interpretations.
Leading the way; making a difference
Commercial issues
Commercial / documentary / chartering / Worldscale
• Members and OCIMF networking forum
• C/p terms/clauses (BPVoy 5 discussion with BP Shipping)
• Best commercial/chartering practices
• Worldscale issues
• Payment delays (PPS)
• Payment collection assistance (FDIP)
($3.5m pa collected for members)
• Sustainability
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NAVIGATING THE CYCLES
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BARRELS OF OIL PER CAPITA PER ANNUM(Source: BP Statistical Review of World Energy June 2015)
United States Japan EU Thailand China (incl. HK) India
Source: International Energy Agency, Oil Market Report & Clarkson Shipping Intelligence Network
Oil Price vs. Global Oil Demand (in mbpd)
Strong potential of China and India with a combined population of 2.5 billion in a world of 7.0 billion. Their per capita oil consumption is at extremely low levels and have already embarked on an aggressive industrialization program
If China reaches the same levels of consumption per capita as Thailand, Chinese oil demand (based on existing population) would rise to 18mbpd, an increase of 10mbpd from current levels
Non-OECD demand and in particular China and India remain the main drivers behind oil demand growth in 2016. China expected growth in 2016 +3.0% to 11.5mbpd. India expected growth for 2016 +5.8% to 4.2mbpd
Oil demand expected to remain positive in the non-OECD (forecasted up 2.4% from 2016) and slightly higher than 2015 in the OECD as the economic recovery continues (with US demand expected to grow by 100,000 pd when the rest of the OECD is expected to be flat year over year)
IEA expects oil demand to continue growing => 94.7mbpd in 2015, +1.8mbpd over 2014 and 95.9mbpd in 2016, +1.2mbpd over 2015
Crude oil tankers at strong levels and products following due to high global refinery utilization and strong refinery margins
Global activity continues to strengthen. IMF expects global GDP to grow to 3.1% in 2015 and 3.2% in 2016
21
85.0
87.086.3
85.5
88.4 89.090.1
91.992.9
94.795.9
$65$72
$99
$61
$79
$111 $111 $108
$98
$53
$0
$20
$40
$60
$80
$100
$120
75
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85
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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E
Oil Demand Oil Price (Brent)
20th Annual General Meeting
Demand Positive L/T Outlook
Current >15yrs Current O/B 2016 2017 2018
Over 15yrs 782
VLCC 123 50 46 27
Suezmax 115 38 65 12
Aframax 163 54 70 39
Panamax 68 28 30 10
Handy/MRs 253 123 94 36
0
200
400
600
800
Handy/MRs Panamax Aframax Suezmax VLCC
Nu
mb
er o
f Sh
ips
Source: Clarkson Research Studies, Oil & Tanker Trades Outlook - 2016
Total Orderbook of 722 tankers (312 of which are Products or 43%) vs. 782 vessels (308 of which Products or 39%) in fleetover 15 years of age
58% of product tanker orderbook are MRs
In 2010 the tanker orderbook (vessels >30K dwt) was at 22.3%. In May 2016 it stood at 15.6%
22
NB Delivery Schedule
Tanker Orderbook/Delivery Schedule vs. Fleet >15 years
Tanker Safety… the next chapter
Just launched:Joint Safety Initiative with OCIMF
• Human Factors/ behavioural safetyProcesses • Safety management systems• Risk Management• Training & CPDCulture (attitude/ wellness..)
• Learning from Incidentsreporting, sharing, analysing, learning lessons
• Misc (design & automation, port ops etc.)
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Low Oil Prices Boost For Demand, Seaborne Trade and Tanker Rates
Chinese Seaborne Oil Imports
YE 2013: 255mt
Chinese Seaborne Oil Imports
YE 2016E: 327mt
Source: Clarkson Research Studies, Oil & Tanker Trades Outlook
6.4% CAGR
109 110107
109 111114
105100
95
86
73
62
50
61 58
65 63 61
5347 48 49
45
37
30
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$0
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Brent Oil Price 1YR TCE VLCC (Modern)
25
Lower Bunker Prices Significantly Benefit Profitability
YE2015
$215
YE2013
$600
Note: Bunker averages from ports of Fujairah, Rotterdam, Houston and Singapore
Source: Clarkson Research Studies, Oil & Tanker Trades Outlook - March 2016
Bunkers: $0.9K
TCE: $41,000pd
Bunkers: $0.3K
TCE: $58,000pd
-64%
Typical Suezmax Roundtrip (West Africa / Philadelphia) at WS100
41%
$6 million benefit from lower bunker prices straight to the bottom line from just one vessel