Times continue to be tough fortanker operators as aresult ofcontinued down wardpressure on freight ratescoupled with higher operating

costs. Profits are disappearing and everyone is tightening theirbelts in anticipation of further difficult months. Indeed, it could beyears before we emerge from these trying times and it will be acase of survival of the fittest.

It is my belief, however, that hard times provide fertile groundfor innovation, partnership and operational excellence. Now isthe time for us to look at where we can optimise our operationand seek out efficiencies, while all the time keeping sight of ousafety agenda. Our ability to leverage on the AET values toensure peak operational performance is what will set us apartfrom our competitors.

Work together to identify best practice and share ideas withyour colleagues. Be innovative in your approach and creative inyour efforts to improve efficiency and reduce costs. And alwaysmaintain a focus on excellence and safety.We are all responsiblefor putting in the hard work and dedication to ensure that AETnot only survives the downturn, but also returns to profit before thecompetition with a commercial advantage that will enable us tobecome our customers first choice.It may be tough, but at AET weare resilient. We have the skills and the commitment to emergefrom this downturn fighting fit.

Already we are seeing the fruits of our hard work in the tangiblevetting and contract successes we have been able to realise. Therecent successful ConocoPhillips Tanker Management and SelfAssessment (TMSA) review of our Shipmanagement function inHouston is an excellent example, and provided valuablerealisation of the reorganisation of our fleet into vessel teams underthe Atlas 2 restructure.

The fact that we are now certified to undertake longtermcharters with other important customers such as BP, Exxon andShell is another example, as is the ability to win lucrative newcontracts in the face of stiff competition, such as the shuttle tankersproject in Brazil & the MCV (hybrid FPSO) project in the US Gulf.

SEASCAPE IS PUBLISHED BY AETFOR ITS GLOBAL SEA STAFF COMMUNITY

ISSUE 11 2011

AET INNOVATORSETS THESTANDARD

PAGE 3

HSSE - ELECTRONICNAVIGATION CHARTS

PAGE 4

FAMILIES AT SEANAVIGATION

PAGE 7

P L U S

With more success stories like these we will overcome the currentdownturn.

I ask you all to take a long hard look at your daily dutiesonboard and to think about where you can make improvementsthat will contribute to overall efficiency gains no contribution istoo small.

I would also like to reassure you that, while AET will doeverything it can to rein in costs and squeeze further efficienciesout of the business, we will never do so at the expense of safety,nor at the expense of our future growth. In line with that, we will

continue to focus on the training and development of our sea staff,as well as investing in our recruitment activities to ensure wecontinue to be the best at sea.

Thank you all for your continued support. Now is the time toraise the bar further and I look forward to yourongoing efforts to achieve optimum efficiency.

Safe sailing!Abdul Rahim Abdul RahmanGVP/ED Shipmanagement, AET

Dearcolleagues

AT THE HELM...

Kathy Klausner, wife of board director Robert Klausner,names Lightering Support Vessel, AET Innovator. See P3 for more details

BURNINGISSUESPOTLIGHT ONTANKER EARNINGSPAGE 7

page 2 seascape Issue 11 2011

AET in Uruguay firstEagle Lightering Services, a joint venturecompany between AET and Christophersen SA,performed the first offshore lightering support jobin Uruguay in July, between the dynamicpositioning Suezmax Windsor Knutsen and theconventional Suezmax Max Jacob.

This lightering support job is the culmination ofeight months work to put together the jointventure in Uruguay.

Thumbs up from CPA customer management review of AETsShipmanagement function in Houston, Texas wasconducted by oil major ConocoPhillips inSeptember.

The management review was based on the OilCompanies International Marine Forums (OCIMF)Tanker Management and Self Assessment (TMSA)guidelines. This was the first customer review of

AET digs deepA big thank you to everybody who contributed toAETs appeal for donations in aid of thoseimpacted by the earthquake that devastatednortheast Japan earlier this year. Together weraised a fantastic total of US$38,000 the bulkof which came from our sea staff.

AET business partner Mitsui presented thedonation on our behalf to Japan Platform (JPF),which expressed heartfelt appreciation for thekindness and thoughtfulness of AET employees.

JPF is providing emergency assistance for thevictims of the earthquake and tsunami thatoccurred on 11 March.

Successful delivery of Eagle TexasEagle Texas became the latest Aframax tankerto be successfully delivered to AET on 9September 2011 in Japan the last of eightvessels to be built at the Tsuneishi Tadotsushipyard.

Following delivery, Eagle Texas will beconverted to a modular capture vessel to fulfilthe conditions of our 20-year contract with theMarine Well Containment Company in the USGulf. It was, therefore, fitting that the guests ofhonour at the naming ceremony were MartyMassey, CEO of MWCC, and his wifePamela.

World Maritime Day hampersRecognising that seafarers are away from theirfamilies and loved ones for much of the year,Singapore Port Authority celebrated WorldMaritime Day by distributing hampers to crewmembers whose vessels were in port at thattime. AET was delighted to participate and thepicture shows Capt Budhraja receiving ahamper at the ceremony.

A team of AET mooring masters consisting ofCaptain Ron Wood, Captain Tony Landi andCaptain Sproekle accompanied representativesfrom the customer, BG, to oversee thelightering support. A review of the lighteringoperation was later held at BGs headquartersin Houston and the operation was deemed tobe extremely successful.

the Houston team since the reorganisation of ourShipmanagement function and it was successfullycompleted with no observations.

The customer representatives commended AETon the robust structure of our vessel teams inHouston and were also highly impressed with theimplementation of our safety management systemacross the Atlantic teams within the span of lessthan one year.

The year in reviewAll ships should now have received copies of thelatest edition of our annual report, Impressions ofAET in 2010/2011. These are designed forcrew reading but also for the interest of visitingparties to our ships. For anyone who has not yethad the opportunity to see a copy of Impressions,you can also find it online athttp://www.aet-tankers.com/flickbook/.

SeaRiver praise for Eagle LouisianaWell done to the crew of Aframax newbuildEagle Louisiana who made a big impressionrecently on Joel Louque, Pollution Safety Advisorwith one of AET's major customers, SeaRiver. MrLouque boarded Eagle Louisiana at the Port ofChalmette, Louisiana on the vessel's inauguralvoyage to the state.

Whilst on board, Mr Louque presented aLouisiana state flag to Captain Noel Netto,Master of the vessel for hanging inside the ship.Subsequently, he took the trouble to phone our

Shipmanagement colleagues in Houston toprovide positive feedback on his visit, reservinggreat praise for the new ship and all of her crewin terms of technical operations and safety.

Congratulations to Captain Abel Musugunthan,Chief Engineer Akortsu John Kwasi Mensa andthe delivery crew of Eagle Texas. May youundertake many safe and happy voyagestogether.

Issue 11 2011 seascape page 3

Cementing our leadership position in the US Gulflightering sector, AET took delivery of the worlds firstpurpose-built lightering support vessel (LSV) inGalveston on 6 October.

Designed by Elliott Bay Design Group of Seattleand built by Leevac Industries in Louisiana, AETInnovator was formally named at AET OffshoreServices headquarters by Kathy Klausner, wife ofAET board director Robert F Klausner, in front of AETmanagement, customers and business partners fromaround the world.AET Innovator has been designed and built to

streamline ship-to-ship transfers in the US Gulf and isthe first of four sister craft to be built and deliveredinto the AET Offshore fleet.

Leading the project for AET, General Manager ofAET Offshore Services, Bill Merritt said:

Lightering has been conducted in the US Gulfsince the 1980s but, until now, support has beenprovided by converted offshore supply vessels. Three

years ago, AET decided to introduce a majorimprovement to the industry and began work on anew fleet of specialist lightering support vessels.These new ships provide a more stable and effectiveworking platform for our lightering crews and aremore manoeuvrable and able to handle lessfavourable weather conditions.

This means that our lightering operations willbecome safer, more efficient and more flexible which is good for our crews and good for ourcustomers.

Presiding over the naming ceremony for AETInnovator, AET President & CEO, Hor Weng Yewsaid: We strive to provide the safest and mostefficient lightering activities possible. That is why wetook the decision to invest in this new fleet of purpose-built support vessels. They represent a step-changein how lightering is conducted in this region and willfurther our aim of delivering high quality, safe transferswith minimal impact on the natural environment.

To enable this we are implementing a focusedstrategy to manage the downturn, which willinclude the rationalisation and renewal of our fleetand the strengthening of our business portfolio. Wewill need to raise the performance bar of ourorganisation and continue to invest in our people,ensuring we have the right skills to bring us throughthese tough times and emerge stronger than ourcompetitors.

Strong cost management today is of criticalimportance to our longer term prospects and weneed to reduce costs holistically across thebusiness.

Everyone at AET can play their role in costreduction and optimisation. Unless there is a criticalbusiness need for something, always ask yourself

whether you can defer a spending decision.If something is just a nice to have, rather than amust have, do without. And if you have ideas forhow we can optimise costs take them to yourmaster, chief engineer, or your colleagues ashore.We all need to help change behaviour.

The good news is that we are in a relativelygood position. Although tanker operators will losemoney in the current market, AET is outperforminga number of its competitors. Commercially, we areentering into some groundbreaking contracts withnew and existing customers the Marine WellContainment Company contract being one verygood example, as well as our growing business inspecialist areas such as the dynamic positioningsector, and in emerging markets such as Brazil andChina.

We are also benefitting from recent acceptanceby the oil majors, which improves our longterm

DearcolleaguesAlong with all

tanker owners, AETis entrenched in aprolonged market

downturn whichindustry analysts are not

expecting to easebefore 2013. Although this means we will recordan operating loss this year, our focus is now onensuring that we are among the first tanker operatorsto return to profit, and that when we do, we are inoptimum shape to take advantage of newopportunities that bring us closer to our long termvision.

VIEW FROM THE TOP

AET Innovator sets the standardfor US Gulf lightering

business with big customers such as BP,ConocoPhillips, Exxon and Shell.

These achievements reflect our growing brandpresence, the valuable customer partnerships wehave built and the work you our doing to ensureoperational safety and excellence.

You play a central role in our success.By continuing to focus on the provision of safe,responsible and reliable transportation services, aswell as helping manage our costs, your contributionto our future is invaluable.

I thank you all for your continued support andlook forward to your ongoing contribution duringthese difficult times. When we all pull together andact with a common purpose, we have the power tocreate a very bright future for AET.

Hor Weng YewPresident & CEO

Dear colleagues,The safety of people, the community and theenvironment is a priority for all responsiblecompanies. AET has taken the first steps tobuild a global HSSE culture across the entire

organisation not only at sea but also ashore with the establishmentof a Corporate HSSE capability.The new function, under my leadership, will oversee the activities of

Fleet HSSE, Shore HSSE and Offshore HSSE to ensure a holisticapproach, and will ensure that health, safety, security and theenvironment are built into AETs business at a strategic level.Our objectives will be to reduce overall risk, comply with international

regulations and create a safe and efficient operating environment for allAET employees.Capt Amit Pal continues to lead our Fleet HSSE activities, while Cody

Wilson is responsible for Shore HSSE, and Ben Cobb for OffshoreHSSE.I look forward to providing you with regular updates on our work and

achievements via future Seascape columns. In the meantime, I urge youall to pay special attention to your regular HSSE column on page 4 ofthis issue.Think safe, act safe, be safe!

Gerald OngGlobal Head, Corporate HSSE and Commercial Director,Aframax PacificAET

INTRODUCING CORPORATE HSSE

page 4 seascape Issue 11 2011

ELECTRONICNAVIGATIONCHARTS (ENC)

PERSONAL PROTECTIVEEQUIPMENT (PPE)

From 1 July 2012, it will be mandatory forall ships built on or after this date to beequipped with electronic navigation charts(ENC). All existing ships (and that appliesto the AET fleet) must equip themselves withENC by 1 July 2015 or at the first surveyafter that date.

Electronic charts are digital and containmuch more navigational information thancould ever be contained on a paperversion. They will, therefore, addsignificantly to the safety of all vessels thatuse them. The charts can accept feeds fromother bridge equipment such as GPS,RADAR, ARPA and the gyro compass todeliver a comprehensive navigationalpicture to the bridge team. This will helpreduce human error and the likelihood of acollision or grounding whilst improvingposition fixing.

Way before IMO regulated ENC, AET hadin 2004 installed electronic charts throughCMAP and although the transition deadlineis not until 2015, we have already begunthe process of upgrading these electroniccharts to ENC onboard AET ships.

In September, Bunga Kelana 4 andEagle Baltimore were fitted with ENC andthe target is for the entire fleet to have ENCinstalled by July 2012. Teaming up with HRSea, we will ensure that all our colleaguesat sea will have undergone sufficienttraining to become proficient in this newequipment.

Ultimately, it is our intention to runpaperless vessels and we will work towardsthat goal over the coming years.Captain Manu NarayanNavigation SuperintendentAET Shipmanagement (Singapore)

PPE - Lets get it rightOur life is irreplaceable and it is our responsibilityto protect ourselves by wearing the correctpersonal protective equipment (PPE) for each andevery task we carry-out onboard ship. And, aspart of a team, it is also important that we takecare of our colleagues. We all have a duty tochallenge any crew member, irrespective of rank,who we find working without the correct PPE. Wemust do this sensitively and help him or herunderstand the risks involved.

PPE protects us from sustaining injuries or, inserious cases, limits the severity of our injuries. Itdoes not eliminate hazards nor does it prevent anaccident from occurring. But wearing the correctPPE demonstrates that we have adopted aresponsible attitude towards safety and our safetyculture. It also shows that we are aware ofpotential hazards and are able to take effectivemeasures to prevent an accident from occurring.

Getting it rightHow do we ensure that we are using the rightPPE? For routine tasks we should refer to the PPEMatrix provided in our Safety ManagementSystem and posted around the ship. For non-routine activities, additional PPE is identifiedduring the detailed risk assessment that is alwayscarried out prior to undertaking these higher-risktasks. The additional PPE requirement is thenshared with the relevant teams at the regulartoolbox meeting.

Leading by example, senior team membersshould actively encourage the entire team to

comply with PPE requirements. Often this can beachieved simply by attending the work areaswearing the right PPE and guiding team membersin the right direction.

For consistency, AET has identified a commonset of PPE which means that all personalprotective equipment found onboard each shipwill be identical. This ensures quality levels aremaintained and that we are familiar with all ourpersonal safety items on each ship we sail on.Personal safety is not a slogan - it isboth a commitment and away of life.

Captain Tamal Saha RayHSSE Q & AAET Shipmanagement (Singapore)

Always wear the correct PPE

Electronic navigation

Generations of seafarers have used paper charts as their primary

means of navigation for many years but technology is constantly

improving. RADAR, ARPA, echo sounders, speed logs, doppler logs

and, more recently, global positioning systems (GPS) have all advanced

and improved marine navigation. Digital charts are now beginning to

make their mark onboard ships, particularly after they were formally

recognised by the International Maritime Organization (IMO).

Issue 11 2011 seascape page 5

must abide if we wish to trade our ships in international waters.AET is also certified with the voluntary ISO 9001:2000 (qualitymanagement) and ISO 14001:2004 (environmentalmanagement) systems. I remain committed to ensure soundmanagement system principles are embedded within thecompany. I view HSSE as critical to our success and long-termsustainability and it is also my responsibility to ensurecontinuous improvement in our safety performance. In addition,I am charged with minimising the risk of incidents or injuryaboard all of our ships.

How are you qualified for the job?I am a master mariner with many years experience ofcommanding tankers. This enables me to understand fully thepressures and requirements of shipboard life and operations. Iam also a qualified auditor for the ISM, ISPS and ISO codes.

As our fleet continues to grow, how do youensure we remain both compliant and safe?We do this in a number of ways. A recent activity has been theindependent review of our safety culture conducted by LloydsRegister Human Engineering. This encouraged us to take arenewed and in-depth look at our operations and hasidentified a number of areas and initiatives that we arecurrently following through. I am also a great believer infocusing on the key problem areas and we have recentlyrun a series of safety campaigns concentrating on reducinghand and finger injuries and improving navigationprocedures. And, as you know, we have recentlyimplemented a safety champion programme across thefleet to help maintain standards. We are convinced thatthe safety champion participants will become fleetambassadors to continuously educate and influence themindset of our junior officers towards an enhanced safetyculture.

Tell us about your rolein AETIts my job to ensure that AETremains, at all times, compliantwith the International SafetyManagement Code (ISM)and the International Ship andPort Facility Security Code (ISPS).

Both of these codes are international regulations by which we

IN THE HOT SEAT

with Capt Lanse Purushotam, Master,Eagle Birmingham - an AET Aframaxtanker on lightering duties in the USGulf.

1100MMIINNSS

Modern shipping requires tighter sailing schedules and faster port turnarounds does thiscompromise safety?As with any industry, if we ask people to conduct multipleactivities in a pressured environment the likelihood of somethinggoing wrong is increased. It is important to prepare for theseactivities and learn from previous errors. For example, if a crewis taking a ship into dry-dock, we discuss the potential risks andhazards with them so that they are fully prepared to deal with alleventualities. It is probably true to say that most incidents are caused by humanerror and so we spend a lot of time with our sea staff to ensurethat team-working and communication is optimised. We alsomonitor how individuals react during the more challengingactivities such as navigating in confined waters or conductingcargo operations.

Officers are being promoted earlier and with less time in the job is this safe?Well, it is certainly a fact that officers are being promoted at ayounger age in all shipping companies, which inevitably meansthey have less experience than their counterparts of 20 or so yearsago. On the other hand, todays seafarer is much more technicallyqualified than they were in those days. We need to recognise thisand ensure that our officers are given the support they require. At AET, we do this through a programme of mentoring wheresenior ships masters guide less experienced officers through themore challenging aspects of their job. We always make a pointof having regular dialogue with our aspiring officers through seastaff conferences, visits to training institutions, office briefings andmany visits to the ships. Our robust training regime with supportfrom our experienced training superintendents ensures our youngofficers are given all the support they require to excel in theirchosen career.

How long have you worked for AET?I joined NOL in 1995 which became AET whenthe company was bought by MISC in 2003 andso I can say Ive worked for AET for 16 years.Ive been in command since 1998.

How did you feel when you took command of your first ship?Apprehensive! Before I joined, I met the variousheads of departments who told me what wasexpected of me, but what really helped was asenior Master from the safety department tellingme how to react calmly in an emergency and notto let emotion cloud my judgement. I follow hisadvice to this day.

How does commanding a lightering Aframax differ from commanding a vesselengaged on normal passage duties?Ive spent over 80% of my time in command oflightering vessels and Ive learned that there is nosuch thing as a regular day! There are frequentloading and discharge activities and many seaand river passages, generally under pilotage andin confined and crowded waters. Turnaroundsaverage 24 hours, and within that we also haveto comply with STCW rest-hour requirements. Lifeonboard a long-haul VLCC is very different androutine jobs and leisure activities can be easilyplanned when on passage. But activities in port

are more hectic and include lightering,bunkering, storing, crew changes, audits andinspection. Each ship is different.

What is the most challenging aspect of your job?Maintenance, particularly keeping the rust at bay,is an on-going battle. I have seen many ships agebefore my eyes (as I have aged, I suppose!)Together with my crew, we work hard to keepour ship in a highly maintained state 365 days ofthe year.

What do you enjoy most about being at sea?Not long ago I would had said sitting in acrowded bar in a far away land, buying astranger a glass of beer and passing the time ofday. But today I say simplicity and an honest wayof life.

Would you recommend a life at sea to todays youngsters?I have always maintained that sailing in themerchant marine is more than a job - it is a way

of life. If there are youngsters out there who feelthey can adapt to the ways of the sea, enjoy timespent onboard, maintain a cheerful disposition inthe face of adversity and learn how to absorb thepressures relevant to their rank then I wouldrecommend that they sign up.

At sea, kids learn to be honest, diligent,respectful and to understand other cultures andauthority They broaden their horizons and earndecent money early in their career which couldopen up other avenues, not necessarily in thesame business.

Can you ever relax at sea?Yes, before retiring for the day is a good time toindulge in other interests. Sometimes I read butcurrently Im learning the intricacies of still-lifesketching.

What was the last book you read?No Full Stops in India by Mark Tully. Mark is aBBC reporter and has lived in India for manyyears, this book charts his life and experiences inthis wonderful country.

Seascape interviews Captain Muhammad Assuad Ahmad,Senior Manager, Safety & Quality,HSSE Department

page 6 seascape Issue 11 2011

UK BRIBERY ACT - HOW IT AFFECTS YOU AT SEA

Philip Riches is a barrister atLondon's Stone Chambers. He hasbeen advising AETs legal departmenton the UK Bribery Act 2011, which hasbeen described as one of the most farreaching pieces of new legislation inrecent times. In this edition ofSeascape, Mr Riches answersquestions and provides practical adviceon the Act, which came into force on 1July 2011 and has ramifications for allemployees of AET.

In a nutshell, what is the purpose of the UKBribery Act?The purpose of the UK Bribery Act is to preventbribery in any situation in which UK corporationsand anyone related to the UK might be involved.It brings together a lot of pre-existing legislationunder one umbrella for the purposes of clarity, aswell as containing a number of extensions toprevious rules.

Why has it been introduced now?Essentially, it has been introduced to help the UKcatch up with other jurisdictions such as the US,for example, which has had similar legislation inplace for years.

As I am not a resident of the UK and do not workin the UK, why do I need to be aware of the Act?The legislation covers any acts of briberyinvolving British passport holders in the UK andoverseas and any persons ordinarily resident inthe UK. It also covers any company incorporated

in the UK. In addition, any companyincorporated in the UK or which is notincorporated in the UK but which carries on abusiness or part of a business in the UK, can beliable if any person associated with it (includingany employee, agent or subsidiary) is involved inbribery, wherever that bribery takes place. As theAET group includes a UK incorporated companyand companies which carry on business in theUK, all AET employees must be aware of andcompliant with the Act, as must all thosecompanies or people acting as agents orsubsidiaries of any of those companies.

How does the UK Bribery Act impact my workonboard ship?Any facilitation payments which might havepreviously been provided for customs clearance,piloting duties, canal transits etc, may well fallfoul of the Act, so it is important that such anyonboard practices are made compliant with theAct.

What constitutes bribery under the Act?The Act includes everything from the mostobvious and excessive examples such as majorpayment incentives for contract gains, but alsowhat many consider to be part of day-to-daybusiness facilitation. Even a minor and seeminglyinnocent gesture intended to oil the wheels ofeveryday business operations could beconsidered a bribe.

What should I do if I think somebody is askingme to participate in bribery?You should report the incident to the designatedcontact person in your company and, of course,not participate in the bribery.

What should I do if not participating in briberyjeopardises AETs business with its customers?Again, you should report the incident back to thedesignated contact person at AET.

The individual or company who may haveultimately benefited from the business you lostbecause they were willing to pay a bribe mayalso be reportable under the Act, which means,commercially, AET may be able to protect itself.

What would happen to me, my fellow crew andAET if we were found to be involved in bribery?Under the UK Bribery Act, those found guilty ofan offence under the Act may be liable forimprisonment for a period of up to 10 years.AET, meanwhile, could be liable for a significantfine.

Your designated contacts for reporting briberyare Robert Miller (rmiller@aet-tankers.com)and Simon Thornton (sthornton@aet-tankers.com). Contact can also be made viathe dedicated anti-bribery email addressAETAntiBribery@aet-tankers.com

An AET Aframax tanker recently made a portcall during which she was boarded and finedfor alleged violations of local regulations. Asthe port in question had a reputation forquestionable activity and, as the new Anti-Bribery Act prohibits facilitation or other softpayments, the ships master contacted AETsHouston office for advice on how to proceed.

The Operations, Commercial,Shipmanagement and Legal teams workedtogether to identify all the issues, including thoseposed by the Anti-Bribery Act, and to developa response strategy which would avoidunnecessary vessel delays, satisfy local

regulatory enforcement authorities and fit withinthe constraints imposed by the Anti-Bribery Actthat prohibit improper payments to governmentofficials.

Subsequently, the boarding official wasadvised that AET would make no paymentdirectly to him but would pay the fine to theappropriate receiving authority. AET thenworked closely with the P&I Club and its localagent to confirm the validity of the fine and tonegotiate a reduced amount. AET made itclear at all times to local officials and its agentsthat it would only pay legitimate penaltiesthrough legitimate channels. AET concluded the

matter by making paymentthrough its agent to the legitimate local authorityafter the vessel had sailed.

Timely notice by the master coupled withclose cooperation between the departments

enabled AET to move systematically to resolvethe issue efficiently and in full compliance withthe new Anti-bribery Act and local / portregulations without antagonising the authoritiesto the detriment of future port calls.

AET tanker puts Anti-Bribery and Corruption Policy into practiceA recent port call by one of AETs vessels provides an excellent exampleof the application of our new Anti-Bribery and Corruption Policy.

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5.000

0

Aframax earnings

TEC Assessment

$/day

Jan 2010 Jan 2011

Issue 11 2011 seascape page 7

B U R N I N G I S S U E

More ships, lower ratesFollowing the general rule of supply anddemand, if there are plenty of vesselsavailable to carry oil, the hire price will fall.Two or three years ago, freight rates wereextremely high which encouraged shipownersto build more vessels. As a result, last year sawthe world tanker fleet grow at its fastest rate for30 years and this has driven down freight

rates. But there are other complexities. Theglobal phase-out of single-hulled tankers goessomeway to offset fleet growth as does the useof large tankers for floating storage. And theemerging trend of slow steaming to save fuelcosts will also have the effect of reducing thenumber of tankers available for charter. Evenso, there are still far too many ships availablefor charter in todays market.

SSPPOOTTLLIIGGHHTT OONN TTAANNKKEERR EEAARRNNIINNGGSS The cost of transporting oilIf you regularly take a taxi from one city to another you would expect the priceof that journey to rise steadily over the course of a few years. But the cost ofchartering one of our ships to carry oil from one port to another will rise and fallsignificantly over the same period. The chart shows the average cost ofchartering an aframax tanker over a two-year period and you can easily seethe fluctuations and volatility. As a ship-owner, we cannot dicate how much weare paid to transport oil for our customers the price is set by the market, Sowhy does this price change so dramatically and how does that affect us?

High oil prices, less demandIn general, a high oil price will reduce globaldemand which means there is less cargo for ourships to transport and this reduces freightrates. Interestingly, a 10% increase in crudeprices will lower global demand by around0.6%. Conversely, a 1% change in demandcauses a 16% rise or fall in the price of crudeoil. With crude oil priced at over $100 a barreland the global economy continuing to remainweak, global demand is forecast to fall year-on-year which will reduce the demand fortankers such as ours.

Continued low ratesTanker freight rates hit an eight-year low in 2009and this was caused by the combination of highoil prices, a reduction in demand for oil and arecord number of ships joining the world fleet.Because of the many factors that influence tankerrates including the recent unrest in Libya it isnot easy to forecast the future market. But mostexperts believe freight rates for all tankers willremain very low throughout 2012 and into2013 and this will, of course, affect theprofitability of all tanker owners across theworld, including AET.

Ragini Chaudhari

I am Captain Shailendra

Chaudhari and my daug

hter, Ragini, now aged si

x, sailed

on seven tankers from her

birth until she reached fiv

e. She took her first steps o

nboard

a tanker and her first word

s were mumma, daddy, br

idge, galley, pilot, gangw

ay and

chief cook!

In Kindergarten in 2009,

Ragini was asked to fill in t

he first letter of a word to d

escribe

a picture she was being s

hown. The picture was a

JET plane with the J missi

ng. Ragini

wrote an A to turn the w

ord into AET.

Im so pleased I took my d

aughter to sea with me as

it meant I did not miss out

on her

early years but when our s

econd child was born

I decided to take a shore

position. Whilst sitting on

the balcony with Ragini the

other day I asked her

what she wanted to be w

hen she grew up. Quick

as a flash she said pilot

. Airline pilot?, I said.

No, replied Ragini, a p

ilot who

brings ships into port.

FAMILIES AT SEARaunaq NawarI am Raunaq Nawar, daughter of Chief Engineer Mohammad Showkat Hossain. I amtwelve years old and have travelled in more than eight ships with my parents. My bestship was Bunga Kelana 8 and I still remember my first sight of that big orange ship. During my first few days onboard I got to know the good and friendly crew includingCaptain (Krutous), C/O (Myo), S/A (Rakesh), 3/O (Anupam), 4/E (Hidayah), 3/O(Hemanth) and others. One day 3/O Anupam arranged a party for me and I helpedto decorate the mess room. We played team games all day and had a deliciousdinner in the evening. Another day the Indian officers organised a cooking party andwe tried the best Indian dishes which was fun and exciting. The only female officer onboard, 4/E Hidayah, let me try on her uniform and that is a great memory for me. During my month onboard we visited Melaka and Bintulu but the trip ended all too soon.

For my dad, AET is as much a part of his family as me and mom. I reallyenjoyed my trip and am proud to be part of the AET family.

page 8 seascape Issue 11 2011

SudokuFill in the grid so that each row, column and 3x3 box contains the numbers 1-9.

758

4

6 2

55

5

56 9

4

9

27

7

17

38

9

14

6

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IND

Seascape is published by:AET UK Limited, Suite 8.02 ExchangeTower,1 Harbour Exchange Square, LondonE14 9GE, UK

EditorChong Hui ChienCorporate Communicationseditor@aet-tankers.com

Contributors Fared Khan, HR Sea, AET Shipmanagement, Singapore

Amit Pal, HSSE, AET Shipmanagement, Singapore

Design/ProductionChris Smith

Its Print, Singapore

No part of this publication may bereproduced in any form without the writtenpermission of the publisher. The opinionsexpressed in contributed articles andinterviews in Seascape are the views of theindividual writers and interviewees and donot necessarily reflect the views and opinionsof AET.

Source: Sudoku-Puzzles.net

MASTERMINDTake two minutes to testyour shipping knowledge.

There are a whole raft of abbreviations usedthroughout our industry. Try this quiz to find outhow many you know.

MODU ABCU

AHV H&M

BNM UHF

CBT D&H

FOB IMO

Mobile Offshore Drilling Unit

Automated Bridge Control system for

Unattended engine room

Anchor Handling Vessel

Hull & Machinery

Broadcast Notice to Mariners

Ultra High Frequency

Clean Ballast Tanks

Dangerous and Hazardous

Free on Board

International Maritime Organization

SNAP HAPPY

Thank you to all those who participated this year anda big well done! to everyone at sea who wasnominated, as listed below.

Ian Rey Albaran, Third OfficerMohd Sobri bin Mohd Ali, OilerCaptain Norazli Bin AhmadRahul Athwal, Able-Bodied SeamanAngelo A/L Augustus, Chief Engineer Jacobus Ayub, OilerCaptain Anthony BarettoRuben Baltazar Barros, Chief EngineerRajasingam Baskaran, Second MateCaptain Rajeev BerryCaptain Chetan BudhrajaCaptain Sergey A BurlakaSamedi Dilao De Quiroz, Chief EngineerSenthil Kumaran Dhanasekaran, Able-Bodied Seaman Trevor Dias, Chief Engineer Kwesi Tanu Ezekiel, Chief EngineerCaptain Gopal Krishnan KailaOleg Karpunin, Chief EngineerUllasa Kota, Third EngineerChandan Kumar, Chief Officer

Chao Li, Second EngineerCaptain Lidivino Silva LoboMuhammad Ilyas Lodhi, Chief EngineerOleksandr Lyaguta, Chief EngineerRosdiansah Bin Madjid, Chief Cook Roderick Pesigan Malabanan, PumpmanCaptain Shalil Shreedhar MalewarSuherman Mandung, OilerAtep Mardiana, Chief EngineerAmran Bin Matsom, Catering SuperintendentCaptain Shanker Ganesh A/L Muthuram Captain Sugunan A/L NanooCaptain Derek John PaesAgus Priyanto, Chief CookSigit Edi Purnama, Second EngineerMichael Quansah Essel, Second Engineer Sulaiman Bin Rahmat Mohammed, BosunFan Ruan, Deck CadetVishal Sharma, Chief OfficerJagbir Pal Singh, Chief Engineer Pethuru Jagadees, Second CookCaptain Norlito Uy SepulvidaKamrul Uddin Washim, Chief Officer Wang Zhao Guo, Second Engineer

Congratulations to Second Officer Gurmeet Singh, who wins a Presidents Awards 2011 LivingAET Values award for his standards of excellence onboard ship and for his exceptionalpartnership ethic. Gurmeet was commended by colleagues for his sense of responsibility,specifically with regards to promoting safety and educating others in the importance of protectingpersonal wellbeing and the environment. Nominations in support of Gurmeet also praised hisleadership qualities and the effort he puts into ensuring a happy ship, where everyone fromthe cook to the pumpman feel an integral and important part of onboard life.Gurmeets fellow Living AET Values award winners are Mohd Rizal Mohd Rani, of our IT team

in Singapore and Amy Crenan, of Commercial Operations in Houston. Second Officer RahulPant and Head HR Sea, Captain Fared Khan are also to be congratulated on their highlycommended acknowledgements. Meanwhile, this years Outstanding Achievement Award goesto Bill Merritt of AET Offshore Services in Galveston, Texas.

PRESIDENTS AWARDS 2011 WINNERS

Thanks to all those budding photographers whohave sent in their shots for our photo competition.The standard is high, with some excellent photosthat capture ships and operations. However, weare very short on photos that include people.

Were therefore giving you and your families onefinal opportunity to get out those cameras orsmartphones, and send us imaginative andcreative photos that you think illustrate one or moreof AETs values partnership, excellence,responsibility and innovation. Send your photos toeditor@aet-tankers.com with a brief description ofyour photo, including what value it represents andwhy, along with your name, rank and ship, by 31March 2012. If you have children who wish toenter a photo, please also include their age.