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  • Ships burn HFO that contain aromatics- organic unsaturated low combustibility molecules that will attach to anything. The particulates contained in HFO include: Sulphates Nitrates Heavy metals Switshing to distillaltes
  • Notes
  • In general the CO2 emission has developed in line with energy consumption, which again has developed according to the population the growth in the population. Over the last years oil consumption has developed stronger that the population growth because the strong economic growth in large countries such as Russia, India and in particular China . Cos emission has also developed stronger than energy consumption because coal increased its part of energy consumption. The strong growth in seaborne trade can firstly be attributed to the strong import to China of raw materials and the strong growth in finished good from China to Europe and the US.
  • Notes
  • Notes
  • Notes
  • Sleipner Norway radar Tud in tyres
  • Ships burn HFO that contain aromatics- organic unsaturated low combustibility molecules that will attach to anything. The particulates contained in HFO include: Sulphates Nitrates Heavy metals Switshing to distillaltes

Transcript

  • 1. The State of the Tanker Industry Russian Register Quality Shipping Seminar St. Petersburg 21 October 2009 [email_address] Manager Research and Projects
  • 2. The State of the Tanker Industry
    • 2003 - 2Q09 superb market, high earnings
    • Current situation,
      • declining demand
      • increasing fleet
      • below costs freight rates
    • Safety status
      • Record low pollution
      • Few serious incidents
    • Market crises threat to safety?
      • Will cost saving increase risk?
    • Recruiting, the major challenge ahead?
  • 3. Surviving in crises How to survive when freight rates do not cover costs ? How to maintain high quality shipping with a low number of incidents and few oil spills at the same time as earnings are low and pressure to reduce cost is high ? How to fend off the pirates ? $/day Why risk management is important !!
  • 4.
      • Market recovery in sight?
  • 5. World GDP and oil demand change Source. IMF/BP / IEA
  • 6. Average tanker freight rates based on the Baltic rates Source: Baltic Exchange/INTERTANKO $/day
  • 7. World oil demand mbd Source. IEA Increase in Middle East, USA, China and ROW** 1Q07-4Q10 mbd ROW**. Rest of World
  • 8. Tanker deliveries, removals, max phase-out All tankers > 25,000 dwt m dwt Assumed balanced market end 2008 Deliveries and orderbook based on Clarkson World Shipyard Monitor Sept 09 6 m dwt additional annual delivers 2013 -2015, and Phase out all SH by 2010, DB/DS trading until 25 years old 2 m dwt additional annual scrapping of DH 2011-2015 Fleet 527 403.4 m dwt Orderb 228 121.8 “ 45% Not DH 626 50.2 ” 12% 2009 2% reduction demand
  • 9. Oil demand, tonne-mile, and tanker fleet, development mbd Source: IEA, Fearnleys, INTERTANKO Tanker fleet increase 2002-2010: 43%
  • 10.
      • Environmental performance improving
  • 11. Accidental oil pollution into the sea spills per tonne-miles 1970-1980 Source: INTERTANKO/ITOPF 1000 ts spilt per bn tonne miles No major spill until Sept. 2009 Record low 2008
  • 12. Accidental oil pollution into the sea 1970-2009 Source: INTERTANKO/ITOPF 1000 ts spilt No major spill Jan-Sept. 2009 Record low 2008 Largest spills in each year: 2004 - 2008
  • 13. Number spills above 7-700 tonnes Source: INTERTANKO/ITOPF Number Record low 2008
  • 14. Number spills above 700 tonnes Source: INTERTANKO/ITOPF Number Record low 2008 No major spill until Aug 2009
  • 15. Accidental oil pollution into the sea and tanker trade Source: INTERTANKO/ITOPF/Fearnleys 1000 ts spilt bn tonne-miles Record low accidental pollution from tanker in 2008, no major ones so far 2009
  • 16. Incidents attended by ITOPF over the past 5 years Number Source: ITOPF
  • 17. Tanker incidents 2009 Rate is number incidents divided by number tankers in the segment Worst incident 2009 may be collision/fire Formosa Brick collision in the Straits of Singapore Aug 2009 9 fatalities and Elli that broke in two at the entrance Suez Canal.
  • 18. Tanker incidents and accidental pollution Number incidents ’ 000 ts pollution Source: INTERTANKO, based on data from LMIU, ITOPF + others 2009 a projection based on 9.7 months Record low accidental pollution from tanker in 2008, no major ones so far 2009
  • 19. Tanker incidents by type % of total Source: INTERTANKO, based on data from LMIU, ITOPF + others 2009 a projection based on 9.7 months
  • 20. Tanker hull & machinery incidents Number incidents Based on data from LMIU, ITOPF + others
  • 21. Tanker hull & machinery incidents Number incidents Based on data from LMIU, ITOPF + others 15.8 259 38 133 88 Total 16.3 38 8 17 13 2009 15.6 59 10 24 25 2008 13.2 48 3 25 20 2007 14.3 32 3 17 12 2006 17.6 34 5 20 9 2005 18.8 12 3 7 2 2004 18.4 14 3 8 3 2003 17.5 22 3 15 4 2002 Average age Total >25 years 10-24 years <10 years Year
  • 22. Tanker incidents and rate by flag Number incidents Rate 2008 – 287 incidents Flags with more than 2 incidents Flags with more than 1 incident Rate is number of incidents divided by number of ships per flag 2009 9.7 ms – 227 incidents Canada 0.194 Cambodia 0.091 Cambodia 0.091 Russia 0.047
  • 23. Tanker accidental pollution 1974 – 2009 by cause (9,368 incidents) Based on data from ITOPF
  • 24. Tanker accidental pollution 1974 – 2009 by cause Based on data from ITOPF Tankers spills of 7 - 700 tonnes Tankers spills of > 700 tonnes Tankers spills of < 7 tonnes 7817 spills 1203 spills 348 spills Operational Collision Fire & explosions Groundings Hull failures Other/unknown
  • 25.
      • Piracy incidents
  • 26. Tanker piracy incidents 2008-2009 110 incident 2008 – 83 incidents 2009 By area By month By size By age
  • 27.
      • Maintaining quality during crises
  • 28. Why is risk management and keeping a high performance record is important also in a crises
    • $320 m people claims
    • $240 m cargo claims
    • $150 m pollution claims
    • $140 m collision claims
    • $130 m property claims
    • $ 980 m total claims which shipping may need some
    • $ 9.98 bn in freight income to cover *
    • ..and if performance record is bad:
    • Charterer will avoid you
    • Authorities may detain you
    • Insurers will charge you
    • i.e. in the end:
    • Poor performance means reduced income and higher costs
    • Today everybody asks for performance evidence:
    • TMSA, port state control record, accident record,……………
    • An the requirements of oil majors are hard to meet
    The industry yearly pay approximately: ** Source :UK P&I Club
  • 29. Risk management important during crises
    • Involves:
    • Identifying and understanding risks
    • Mitigating or eliminating risks where possible
    • Avoiding unacceptable risks
    • Balancing risk & reward to arrive at the best business decision
    • Goals:
    • To protect people, the environment and property
    • To avoid involvement in a catastrophic incident
    • To prevent business disruptions
    • To improve quality of available tonnage .
    Elli was split in half and sank near the Red Sea entrance to the Suez Canal, 80 miles east of Kairo, Egypt, Friday Aug. 28, 2009.
  • 30. Flirting with disaster Why accidents are rarely accidental
    • Short term thinking about money is a factor in many incidents
    • While the most common explanation of accidents are operator error, a more frequent cause is faulty design of the socio-technical system (i.e. people and tech. in combination) in which the operator is embedded.
    • Without an institutional recognition of risk , an emphasize on safety is unlikely, and in the absence of focus on safety, it is impossible to achieve it
    • Disasters – uncontrollable domino effect in a interdependent system- hazards expand faster than people are able to cope - OBE*
    • Disasters are often foreseen, and warned but not strong enough
    • Be aware - Improving safety also encourage risk taking
    • Book Marc Gerstein 2008
    *Overtaken By Events
  • 31. TOTS - Intertanko Initiative
    • The Intertanko initiative is a laudable effort on part of the industry to raise bar on competence and training
    • This is particularly applicable for effective task based and structured training for Junior officers
    • This will assist in preparing the officers for promotion when acquiring competence in listed tasks
    • The effectiveness of any program is in the effectiveness of implementation, resources, auditing and quality control
    • Given the listed items for effective implementation of TOTS, would the officers achieve any tangible advantage in time vs. the present experience requirements? A good question to be answered by results
    • Human learning is 70% based on EXPERIENCE (Skills and application of knowledge)
    Serious current manning flaws include , lack of experience, mixed culture/nationalities, communication (language) problems, poor knowledge
  • 32. Conclusion
    • A prolonged market crises will make hard demands on the industry?
    • Quality level high
      • Record low pollution
      • Few serious incidents
    • High performance pays
      • Higher income
      • Better flexibility in the market
      • Reduced costs
    • Careful risk analysis pays