1 Oil Tanker Outlook and Newbuilding Demand in a Changing Environment Fallout from the Prestige...

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1 Oil Tanker Outlook and Newbuilding Demand in a Changing Environment Fallout from the Prestige Incident

Transcript of 1 Oil Tanker Outlook and Newbuilding Demand in a Changing Environment Fallout from the Prestige...

Page 1: 1 Oil Tanker Outlook and Newbuilding Demand in a Changing Environment Fallout from the Prestige Incident.

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Oil Tanker Outlookand Newbuilding Demand in a Changing Environment

Oil Tanker Outlookand Newbuilding Demand in a Changing Environment

Fallout from the Prestige Incident

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Changing Environment Post PrestigePressure to Accelerate the Phase-out of SH Oil Tankers Changing Environment Post PrestigePressure to Accelerate the Phase-out of SH Oil Tankers

The current IMO Reg. 13g required phase-out schedule for Single Hull (SH) oil tankers stretches to 2015

MV Prestige incident has intensified the pressure to accelerate the phase-out and increase surveillance of older SH oil tankers, & place limitations on the carriage of heavy Fuel Oil

The EU1 will most likely be implementing several new measures to address these issues, including a phase-out acceleration scheme that is similar to their original proposal to IMO

EU Member states are requested to pressure IMO toadopt similar measures globally

1 – Already recommended by the European Commission and Council

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DefinitionsDefinitions

PL/SBT – Protectively located segregated ballast tanks

Dirty oil – heavy diesel, fuel and lube oil

Oil – clarified, crude, dirty, aromatic (except vegetable), distillates, gas oil, gasoline, jet fuel, naptha, asphalt solutions

CAS – Condition Assessment Scheme – a hull structure survey scheme focusing on planning diligence and greater reporting transparency, required by 2005 for Cat 1, by 2010 for Cat 2

1 – Already recommended by the European Commission and Council

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IMO Oil Tanker CategoriesIMO Oil Tanker Categories

Category 1 – non-double hull (pre PL/SBT), 20 K dwt and above carrying crude and dirty oils, OR 30 K dwt and above carrying other oil cargoes

Category 2 – non-double hull (PL/SBT), 20 K dwt and above crude and dirty oils, OR 30 K dwt and above carrying other oil cargoes

Category 3 – non-double hull, 5 K – 19,999 dwt carrying crude and dirty oils OR 5 K – 29,999 dwt carrying other oil cargoes

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IMO MARPOL 13G Phase OutIMO MARPOL 13G Phase Out

Category Type DWT Cargo Phase Out

1

Pre PL/SBT

Pre-1981

>/= 20K

>/= 30K

Crude and dirty oil

Other oil2003 - 07

2

PL/SBT

Pre 1996

>= 20K

>/=30K

Crude and dirty oil

Other oil2003 - 15

3 Oil tanker

5K<d< 20K

5K<d<30K

Crude and dirty oil

Other oil2003 - 15

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EU Member States are requested to: Reject single hull tankers carrying heavy FO

Accelerate implementation & enhance the PSC Directive 1/1/03

Establish plans to designate safe refuge by 1 July 2003

Develop double hull protection for bunker tanks at IMO

Adopt measures to control the tanker traffic

Ratify EU liability supplementary fund

Accelerate phase-out of single hull oil tankers- adopt by 1 Jul 03Cat. 1 ships - age 23+ yrs starting in 2003 & all by 2005 (pre Marpol)Cat. 2 ships - age 28+ yrs starting in 2003 & all by 2010 ( PL/SBT)Cat. 3 ships - age 28+yrs starting in 2003 & all by 2015 (5K-20/30KDwt)Apply CAS to all tankers at 15 years of ageLimit transport of heavy FO in single hulls in EEZ of EU members

EU Council 6 Dec 2002 Conclusions Impacting Oil Tankers

EU Council 6 Dec 2002 Conclusions Impacting Oil Tankers

EEZ = Exclusive Economic Zone

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Impact of EU Proposed Phase-out AccelerationWill IMO also adopt it?

Near term impact on Supply / Demand balance could be significant, and degree varies by size of oil tanker

Immediate impact would affect applicable tankers thattrade to EU

If EU proposal adopted by IMO impact would be worldwide

2 Phase-out scenarios were considered for comparison:

Scenario 1: Current IMO Reg. 13g phase out scheme

Scenario 2: EU Proposal - assumed to apply to entire fleet[ If adopted by IMO earliest would be 2004, & most likely 2005 ]

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Impact of EU Proposed Phase-out Acceleration Approach - Side-by-side comparison of Supply / Demand

balance for each year to 2015 for current IMO and proposed EU phase-out schemes

Demand = Current fleet size (+ or -) forecast annual demand growth Demand growth: estimated crude & product oil seaborne transport

based on the US Dept of Energy Oil Demand Forecast to 2020 Large tankers - crude oil only, Smaller tankers - crude & product

Supply = Fleet - Removals (both phase-out & scrapping*) + Newbuilding deliveries (current orderbook)

Future Deliveries needed = Supply shortfall to meet Demand

2003-2005 2006-2010 2011-2015 2016-2020

VLCC 3.0% 2.3% 2.2% 1.9%Suezmax 3.7% 2.9% 2.6% 2.3%Aframax 3.1% 2.1% 1.9% 1.6%Panamax 3.9% 2.8% 2.5% 1.9%Products 2.4% 2.2% 2.3% 1.6%

Avg Annual Growth - Seaborne Oil Transporation

* scrapping based on historical avg. by age and ship type, and considered after Phase-outs have been accounted for.

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-180

-130

-80

-30

20

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

VLCC Delivery RequirementsRegulatory Phase-out Scenario Comparison

-180

-130

-80

-30

20

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

IMO Reg 13g

-28 2 -8 -10 -10 -12 -14 -167 -11 -11 -11 -12 -12SurplusDeliveries

17 -12 -34 -21 -13 -12 -14 -12 -13 -20 -17 -22 -134

Phase-outs

New DemandAdditions Needed

Scrapping

Scheduled DeliveriesJan 2003 Orderbook

Accelerated Phase-out would likely spread if IMO adopts in 2004 or

2005

(-) Shortfall+ Surplus

Fleet Data Source: INTERTANKO & Clarkson Demand Outlook based on US Dept of Energy Oil demand Forecast

EU ProposalAssumed adopted worldwide

Size:200+ KDwt

Replacem’t & New Growth Needs

Fleet Additions

Largest Annual Delivery Over Past 5 yrs: 41

-28 -26 -34 -44 -54 -66 -80 -247 -258 -269 -280 -292 -30417 5 -29 -50 -63 -75 -89 -101 -114 -134 -151 -173 -307Cumm.

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-80

-60

-40

-20

0

20

40

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15-80

-60

-40

-20

0

20

40

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Suezmax Delivery RequirementsRegulatory Phase-out Scenario Comparison

-4 9 -7 -7 -8 -11 -13 -68 -8 -9 -9 -10 -10Surplus Deliveries17 7 -21 -16 -9 -11 -13 -12 -9 -11 -13 -14 -50

IMO Reg 13g

Phase-outs

New DemandAdditions Needed

Scrapping

Scheduled DeliveriesJan 2003 Orderbook

(-) Shortfall+ Surplus

Size:120-200 KDwt

Fleet Data Source: INTERTANKO & Clarkson Demand Outlook based on US Dept of Energy Oil demand Forecast

EU ProposalAssumed adopted worldwide

Accelerated Phase-out would likely

spread if IMO adopts in 2004 or 2005

Largest Annual Delivery Over Past 5 yrs: 28

-4 5 -2 -9 -17 -28 -41 -109 -117 -126 -135 -145 -15517 24 3 -13 -22 -33 -46 -58 -67 -77 -90 -104 -154Cumm.

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-150

-100

-50

0

50

100

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

-150

-100

-50

0

50

100

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Aframax Delivery RequirementsRegulatory Phase-out Scenario Comparison

-22 -5 -5 -12 -13 -20 -20 -146 -12 -12 -13 -14 -15SurplusDeliveries49 11 -22 -61 -42 -20 -20 -16 -29 -34 -28 -25 -61

IMO Reg 13g

Phase-outs

New DemandAdditions Needed

Scrapping

Scheduled DeliveriesJan 2003 Orderbook

Size:80 -120 KDwt

(-) Shortfall

+ Surplus

Fleet Data Source: INTERTANKO & Clarkson Demand Outlook based on US Dept of Energy Oil demand Forecast

EU ProposalAssumed adopted worldwide

Accelerated Phase-out would likely spread if IMO adopts in 2004 or

2005

Largest Annual Delivery Over Past 5 yrs: 70

-22 -27 -32 -44 -57 -77 -97 -243 -255 -267 -280 -294 -30949 60 38 -23 -65 -85 -105 -121 -150 -184 -212 -237 -298Cumm.

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-17 7 -3 -8 -9 -24 -21 -54 -6 -6 -6 -7 -7

Panamax Delivery RequirementsRegulatory Phase-out Scenario Comparison

-60

-40

-20

0

20

40

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15-60

-40

-20

0

20

40

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

SurplusDeliveries

9 20 -12 -31 -30 -24 -21 -21 -14 -11 -11 -11 -14

IMO Reg 13g

Phase-outs

New DemandAdditions Needed

Scrapping

Scheduled DeliveriesJan 2003 Orderbook

Size:60 -80 KDwt

(-) Shortfall

+ Surplus

Fleet Data Source: INTERTANKO & Clarkson Demand Outlook based on US Dept of Energy Oil demand Forecast

EU ProposalAssumed adopted worldwide

Accelerated Phase-out would likely

spread if IMO adopts in 2004 or 2005

Largest Annual Delivery Over Past 5 yrs: 32

-17 -10 -13 -21 -30 -54 -75 -129 -135 -141 -147 -154 -1619 29 17 -14 -44 -68 -89 -110 -124 -135 -146 -157 -171Cumm.

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-280

-240

-200

-160

-120

-80

-40

0

40

80

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15-280

-240

-200

-160

-120

-80

-40

0

40

80

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Products Delivery RequirementsRegulatory Phase-out Scenario Comparison

-193 -10 -9 -24 -30 -81 -60 -162 -27 -27 -25 -30 -39SurplusDeliveries

-4 -14 -82 -87 -75 -81 -60 -49 -43 -43 -44 -49 -67

Size:20 -60 KDwt

IMO Reg 13g

Phase-outs

New DemandAdditions Needed

Scheduled DeliveriesJan 2003 Orderbook

(-) LargeShortfall

Small Shortfall

Fleet Data Source: INTERTANKO & Clarkson Demand Outlook based on US Dept of Energy Oil demand Forecast

EU ProposalAssumed adopted worldwide

Accelerated Phase-out would likely

spread if IMO adopts in 2004 or 2005

Largest Annual Delivery Over Past 5 yrs: 95

-193 -203-212 -236 -266 -347-407 -569 -596 -623 -648 -678 -717-4 -18 -100 -187 -262 -343 -403 -452 -495 -538 -582 -631 -698Cumm.

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Impact Summary

Prestige incident has prompted the EU to act to accelerate the current IMO phase-out schedule for single hull oil tankers Accelerating both the age schedule and complete

fleet removal dates

While there is time to meet the anticipated replace-ment challenge for 2010 and beyond, there will likely be a near term supply shortfall, particularly for smaller oil tankers if: If IMO adopts the EU accelerated phase-out schedule

If positive future fleet growth is needed to meet oil transportation requirements

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Other Issues – Comments? Other Issues – Comments?

Additional “Incidents”

US Environmental Issues (design impact)

Jones Act

Alternate Energy Sources

World Tensions/Maritime Security

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