OpatijaOpatija

TankerTanker CharteringChartering ReportReport

OctoberOctober 20082008

Tanker Market Tanker Market VolatileVolatile

2005-20072005-2007 2007-2007-20082008

BDTIBDTI - 60%- 60% + 70%+ 70%

BCTIBCTI - 61%- 61% + 82%+ 82%

BalticBaltic DirtyDirty TankerTanker IndexIndexJanuaryJanuary 2005-October2005-October 20082008

BalticBaltic CleanClean TankerTanker IndexIndex JanuaryJanuary 2005-October2005-October 20082008

TankerTanker CharteringChartering ReportReport

Bunker Prices in RotterdamBunker Prices in Rotterdam

Rose from $390 to $557 per tonneRose from $390 to $557 per tonne

Plus 45.5%Plus 45.5%

Peaking @ $729.50 July ’08Peaking @ $729.50 July ’08

Now $357Now $357

Tanker Chartering ReportTanker Chartering Report

• Global Oil Demand up 1.3% yoyGlobal Oil Demand up 1.3% yoy

• Actual +0.97 (1.5m) b/d 2007Actual +0.97 (1.5m) b/d 2007

+0.43 (2.2m) b/d 2008 +0.43 (2.2m) b/d 2008

• Oil Price $90/bbl 2009Oil Price $90/bbl 2009

• Now $72Now $72

TankerTanker Chartering ReportChartering Report

Low level of oil stocks – worldwideLow level of oil stocks – worldwide

Heavy refinery maintenanceHeavy refinery maintenance

High USA demand after hurricane High USA demand after hurricane damage damage

Increased OPEC output/oil on waterIncreased OPEC output/oil on water

Japan + China restockingJapan + China restocking

Hebei Spirit – December 9 2007Hebei Spirit – December 9 2007

Tanker Chartering ReportTanker Chartering Report

• China + 4.6% yoy driven byChina + 4.6% yoy driven by

Car ownership + 1,000 cars per dayCar ownership + 1,000 cars per day

air travelair travel

constructionconstruction

agricultureagriculture

petrochemicalspetrochemicals

oil stocksoil stocks

Tanker Chartering ReportTanker Chartering Report

Oil Demand (2007)Oil Demand (2007)

IndiaIndia +5.0%+5.0%

North AmericaNorth America +0.47%+0.47%

EuropeEurope -2.2% -2.2%

Tanker Chartering ReportTanker Chartering Report

• Clean Tanker TradesClean Tanker Trades

Directionless despiteDirectionless despite

Refinery problems in the Atlantic basin.Refinery problems in the Atlantic basin.

More exports from EuropeMore exports from Europe

Congestion problems in discharge areasCongestion problems in discharge areas

India increasingly a supplier to Europe India increasingly a supplier to Europe and Asiaand Asia

Tanker Chartering ReportTanker Chartering Report

• Growth of tanker fleet 2.7% dwt in Growth of tanker fleet 2.7% dwt in first first

9 months of 2008 (net)9 months of 2008 (net)

• 66 single hull tankers gone for 66 single hull tankers gone for conversion to Storage, FPSO or VLOCsconversion to Storage, FPSO or VLOCs

• Double Hull Fleet = 76% of existing Double Hull Fleet = 76% of existing fleetfleet

Tanker Chartering ReportTanker Chartering Report

• VLCC average earnings:VLCC average earnings:– 20062006$60,289$60,289– 20072007$54,979$54,979– 20082008$100,500 (to date)$100,500 (to date)– 3 Oct3 Oct $85,693$85,693

Tanker Chartering ReportTanker Chartering Report

•Future influences (Short Term):Future influences (Short Term):

Alternative Alternative

Suppliers & pipelinesSuppliers & pipelines

Fuel/coal/gasFuel/coal/gas

Response to “green” legislationResponse to “green” legislation

Tanker Chartering ReportTanker Chartering Report

•Future influences (long term):Future influences (long term):•15 years/+ end of production 15 years/+ end of production

from the largest fields found in from the largest fields found in last 40 yrs:last 40 yrs:

North Sea/Alaska/SakhalinNorth Sea/Alaska/SakhalinNew deep water finds:New deep water finds:

Brazil/Gulf of MexicoBrazil/Gulf of Mexico

Tanker Chartering ReportTanker Chartering Report

•Future influences (Long Term):Future influences (Long Term):

Current finds are smaller capacity Current finds are smaller capacity – indicating maintenance of high – indicating maintenance of high oil price oil price = $ ???= $ ???

or no return to low oil priceor no return to low oil price

= $ 20 = $ 20

Tanker MarketTanker Market

LookoutLookout

For theFor the

Hurricane!Hurricane!