ITMMA PRESENTATION PRESENTATION ITMMA 27 MARCH 2014 27 MARCH 2012 1
BITR and BDTI Rate evolution BITR Rate Evolution (ws) BDTI Rate Evolution (WS) 350 450 400 300 350 250 300 BDTI Rate BDTI Rate 200 250 200 150 150 100 100 50 50 0 0 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 TD5- West Africa/US Atlantic Coast TD6- Black Sea/ Med TD1- Arabian Gulf/US Gulf TD3- Arabian Gulf/Japan TD4- West Africa /USG TD15 West Africa/China 2
Company Highlights • Leading crude tanker company Young diverse fleet of 50 ships under control Balanced strategy between contracts and spot market Well positioned to take advantage of offshore market • Strong financial position No need to raise substantial financing until 2017 Diversified lender’s group Public company able to diversify source of funding • Experienced Management Team Two successful shipping families (Saverys – Livanos) 70 years of combined management experience 3
1. STRATEGY 4
A Focused Fleet Vessel Type Euronav owned TC-IN / BB (Weighted) FSO 2 (2 x 50%) V-PLUS 1 0 VLCC 12 (2 CSR) 3 TC-IN 11+ (1 x 1/2 in J/V) 13 to be delivered (Maersk fleet) SUEZMAX 22 (14 ice class) 1 BB (ice class) (4x 1/2 in J/V) Mix of spot and Total = 50 Ships Fixed contracts
Commercial Balanced Strategy Fixed term contracts Pooling arrangements Proprietary spot desk 6
A Balanced Strategy 2014/ YTD 2013 onhire days Forecast 2014 Onhire Days 2013 Onhire Days 343 days 3% 915 days 6% 2,336 days 3,640 days 15% 30% 646 days 365 days 5% 2% 7,513 days 11,809 days 62% 77% fixed fixed-ps FSO spot fixed fixed-ps FSO spot Break-even Of which OPEX Fixed Contract Backlog 2014: $322m $ 30,098 $ 7,833 VLCC $ 26,333 $ 7,210 Suezmax 7
Clients of Euronav 8
TI POOL Euronav Reederei “Nord” Athenian Sea Carriers Oak Maritime (HK) Overseas Shipholding Group DHT Holdings, Inc
Diversification of Financing Sources Preference for Shipping banks … … but as straight banking finance is drying up It is important to be a public company that can tap alternative source of financing: - Bond markets • Mezzanine financing - Convertible Bonds - Equity markets 10
Maersk fleet • Acquisition of 15 VLCCs from Maersk Tankers Singapore Pte Ltd • For a total acquisition price of USD 980 million • Average age of 4 years • Vessels will be operated in the TI Pool • Two are already delivered: Nautilus and Nucleus • First step towards a wider consolidation of the tanker market 11
2. The Market… …are the fundamentals changing? 12
BITR and BDTI Rate evolution BITR Rate Evolution (ws) BDTI Rate Evolution (WS) 350 450 400 300 350 250 300 BDTI Rate BDTI Rate 200 250 200 150 150 100 100 50 50 0 0 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 TD5- West Africa/US Atlantic Coast TD6- Black Sea/ Med TD1- Arabian Gulf/US Gulf TD3- Arabian Gulf/Japan TD4- West Africa /USG TD15 West Africa/China 13
OIL DEMAND AND PRODUCTION 14
World Oil Demand World Oil Demand Growth per Key area World Oil Demand Growth 50 +3.1% +4.5% 94 45 +1.4% +4.3% +1.4% 92 40 +1.2% +0.9% +7.8% 90 35 +3.1% 30 88 +1.6% -0.1% Mbpd +3.7% -5.1% 0.4% -1.7% +1.5% -1.4% 25 Mbpd 86 +1.8% 20 84 +0.6% -0.6% +4% -3.5% -0.7% 15 82 +3% +4.5% 10 +1.3% +16.4% 80 5 78 0 76 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Americas Europe China Non OECD incl. China • IEA increased world oil demand 2013=> 1.4% • Oil demand expected to grow in 2014=>1.4% • Demand mainly supported by non OECD countries.
USD 100 110 120 130 140 70 80 90 Jan-2011 Feb-2011 Mar-2011 Crude oil price 2011 - YTD Apr-2011 May-2011 Jun-2011 Jul-2011 Aug-2011 Sep-2011 Oct-2011 Nov-2011 Dec-2011 Jan-2012 Feb-2012 Mar-2012 Apr-2012 May-2012 Brent Jun-2012 Jul-2012 Aug-2012 Sep-2012 WTI Oct-2012 Nov-2012 Dec-2012 Jan-2013 Feb-2013 Mar-2013 Apr-2013 May-2013 Jun-2013 Jul-2013 Aug-2013 Sep-2013 Oct-2013 Nov-2013 Dec-13 Jan-14 Feb-14 Mar-14 16
Total shale oil production & Change in Chinese crude demand 17 Source: EIA and OPEC
Suezmax Trading Pattern… …is dramatically changing and adding Ton-Miles WAF Liftings 2010-2014 AG Suezmax Liftings 90 50 80 2010 40 2010 70 2011 60 2011 2012 30 50 2012 2013 40 20 2013 2014 30 2014 20 10 10 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec BlSea Suezmax Liftings 30 Increasing number of 25 lifting in 2013 2010 20 expected to continue 2011 15 in 2014. AG reached 2012 an all times high in 10 2013 Jan 2014. 2014 5 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Euronav Database March 2014
3. TANKER SUPPLY 19
Tanker fleet Vs Oil demand Tanker Fleet Vs Oil Demand 650 95 600 550 90 500 Oil Demand Mbpd 450 85 Tanker Fleet 400 350 80 300 250 75 200 150 70 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 VLCC Suezmax Oil demand 20
VLCC fleet development 21 Source: ICAP Shipping Feb 14
Suezmax fleet development 22 Source: ICAP Shipping
Orderbook
Issues influencing 4. Factors influencing the Large Tanker Supply tanker market tanker market 24
USD /T 400 450 500 550 600 650 700 750 800 07/01/10 07/02/10 07/03/10 07/04/10 07/05/10 07/06/10 07/07/10 07/08/10 07/09/10 07/10/10 Bunker prices 07/11/10 07/12/10 07/01/11 07/02/11 07/03/11 07/04/11 07/05/11 07/06/11 Bunker prices 07/07/11 07/08/11 07/09/11 07/10/11 07/11/11 07/12/11 07/01/12 07/02/12 07/03/12 Singapore Rotterdam LS Fujairah 07/04/12 07/05/12 07/06/12 07/07/12 07/08/12 07/09/12 07/10/12 07/11/12 07/12/12 07/01/13 07/02/13 07/03/13 07/04/13 07/05/13 07/06/13 07/07/13 07/08/13 07/09/13 07/10/13 07/11/13 07/12/13 07/01/14 07/02/14 07/03/14 25
Effect of slow steaming on TCE Source: DNB Markets 26
VLCC Asset Prices 27 Source: ICAP Shipping Feb 2014
Ship Demolition Rates Average Scrap Age $/ldt Suezmax VLCC Scrap Price China Scrap Price India/SubCont 35 700 30 600 25 500 20 400 15 300 10 200 5 100 0 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 28 Source: ICAP Shipping Feb 14
Crude tanker demolition past 12 months 29 Source: Carksons
USD per day 10.000 20.000 30.000 40.000 50.000 60.000 0 Suezmax and VLCC Average Earnings Jan-09 Mar-09 May-09 Jul-09 Sep-09 Average VLCC c. 2010-built Earnings Nov-09 Jan-10 Mar-10 May-10 Source: Clarkson Research Services Limited Jul-10 Sep-10 Nov-10 2009-YTD Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Average Suezmax c. 2010-built Earnings Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 30
5. OFFSHORE SERVICES MARKET 31
Offshore Market 32
Offshore Strategy • 2012: Set up of a dedicated offshore department. • Focus on FpSO units (Floating Storage Offloading) with small (p) production topsides for platform fluids treatment • Select vessels from our trading fleet when: – Becoming more difficult to trade due to age restrictions (older VLCC (1999) and older Suezmax (1998) – have unique characteristics: V+ or Cap Diamant • Use of experienced sub contractors for providing design, engineering and mooring systems . 33
In Operation • FSO Asia and FSO Africa delivered to MOQ in 2010 • New contract agreement FSO Africa as of 1/10/2012 • FSO characteristics: - Storage Capacity: minimum 2,400,000 barrels of dry oil for export - Stripped Water Capacity: minimum 200,000 barrels - Custody transfer to off-take tanker: 90,000 BPH - Discharge to export vessel every 2 to 3 days: in tandem mooring or in STS operations - FSO Crew - 52 persons; FSO accommodation for platform shift workers up to 84 personnel 34
In Tender Phase • Bentley field project for Xcite Energy in UK North Sea for 1 FSO Suezmax size. Contract award mid 2014 but project delayed by client. • Sea Lion field development project offshore Falkland Islands operated by Premier Oil for 1 FSO VLCC size. Contract award 2015Q3. 35
Market Overview 2013 • 13 FPSOs & 4 FSOs awarded • Most FSO/FPSO contracts are extended into option periods • Alternatively re-deployed on new contracts • The complexity and size of new FSO/FPSO are increasing • Leased vs Owned – 50/50 36
FSO/ FPSO The preferred Solution • Flexible, safe and proven solution • Generic or field specific • Deck space and deck load capacity • Storage Capacity • Self propelled marine unit Source: IMA 37
Finding the right investment EURONAV PROJECT PRE QUALIFICATION + EXPERIENCE + CONVERSION OPERATION FINANCIAL CAPABILITY + PROJECT & RISK FINANCING MANAGEMENT + PROCUREMENT 38
231 planned projects whereof 61 in bidding or final design stage 39 Source: IMA
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