council meeting in london september 2003. a few reflections on the future… lars carlsson, chairman...

Council meeting in London

September 2003

A few reflections on the future…

Lars Carlsson, Chairman of Intertanko

Safe TransportCleaner SeasFree Competition

INTERTANKOINTERTANKOInternational Association of Independent Tanker OwnersInternational Association of Independent Tanker Owners

Working for

Tanker Safety – a Success StoryTanker Incidents

0

100

200

300

400

500

600

700

800

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

MiscellanousFire, explosionContactWrecked/strandedCollisionHull, machinery

Source: LMIS

Age Profile of Tanker Fleet

0

50

100

150

200

250

300

350

End-1997 Mid-2003 End-2007

mil

lio

n d

wt

Age 0-9 Years Age 10-19 Age 20+

36%

41%

23%

51%

31%

18%

65%

33%

2%

Double-Hull Transition Smooth Through 2009

0

50

100

150

200

250

300

350

End-2002 End-2003 End-2005 End-2007 End-2009

mil

lio

n d

wt

Double-Hull Fleet Single-Hull Fleet

VLCC Spot Earnings, AG/East

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

1997.1 1998.1 1999.1 2000.1 2001.1 2002.1 2003.1 2004.1 2005.1 2006.1 2007.1

$/d

ay

Base Case, July 2003 High Case Low Case

Zero Tolerance for pollution

and accidents

The world community

Preference for quality and performance!

How about payment?

Marketing of superior ships

If you build, manage and maintain a superior ship

operation – how do you get paid for the extra investment?

Marketing Quality Ships

What are the targets for Oil Co. departments?

• Chartering dept - lowest freight costs• Vetting dept - Basic safety• PR dept - Nice values• Oil trading - Lowest CIF price

• Top management - Long term growth- Shareholder value- Image of Oil Co.- Bonus- social status

Potential ADDITIONAL earnings from:

• Basic earning capacity 16.000/d• Oil Co. Departments:• Chartering/Trading (cargo) 5.000/d• Vetting 0• PR 0• Top management 3.000/d

• Potential earnings/day 24.000/d• Additional earnings/year MUSD 12• Earnings improvement 50%!!!

Is 50% higher earnings per year worth fighting

for???

YES!!!!!!

Efficient marketing towards:

• Chartering Dept• Trading Dept• PR Dept• Vetting DeptBut don’t forget the top boys in the oil

companies for they have the most to loose in accidents!!!

March 29 2001 - Collision Baltic Carrier & Tern

”New ship – No guarantee”

Addressing the value of safety

• What accidents occur?• What are the most common categories

and causes?• What can be done to control risk?• How effective are the measures?• What can be attributed to twin skeg?• What is the cost of accidents?• What is the potential benefit?

Selection and training of competent crews

Crews who can handle tough days!!!

Machinery/systemfailureCollision/Grounding/ContactFire/Explosion

Hull/Equipment

Misc

Tanker casualties …

1993-2002Total 3,360 incidents

49%

13%

10%

25%

Source: LMIS Database

Machinery/SystemfailureCollision/Contact/GroundingFire/Explosion

Hull/Equipment

Misc

… and how these could be prevented or

mitigated

• Integrated bridge control system• Improved manoeuvrability •Bridge Resource Management training

•High coating standard•Preventive maintenance

•Redundant and separate critical systems•Effective Fire extinguishing systems

•Redundant and separate propulsion and steering systems

1993-2002Total 3,360 incidents

Source: LMIS Database

””Oil should always travel Oil should always travel First Class…”First Class…”

……leaving only footprints of redundancyleaving only footprints of redundancy