Challenges & Changes in the Bunker

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1 Challenges & Changes in the Bunker M Market: k t 2011 & Beyond Tom Reilly - Chief Executive Officer Asia Bunker Forum 2011 September 7, 2011

2 STATE OF THE BUNKER INDUSTRY 2011 Year of the Golden Rabbit

3 2011: Year of the Golden Rabbit 1975, 1987, 1999 Excitement t Opportunity Volatility Risk Management Skills

4 Extreme Volatility in Bunker Market $ cst Prices - Singapore, Rotterdam, Fujairah $675 $650 $625 $600 Rotterdam Fujairah Singapore $575 1-Apr-11 1-May-11 1-Jun-11 1-Jul-11 1-Aug-11 1-Sep-11 Q2 - August 2011 Bunker Prices Data Source: CHEMOIL Commercial & Corporate Risk Management

5 Market Perspective: Diversified Company Key Business Drivers: Profitability Global sourcing Global sourcing Global Storage Arbitrage opportunity Barge & Ship Fleet Utilisation rates Operational efficiencies Blending margin Product consistency Barge & Ship Fleet Pipelines Direct sales Global markets

6 Global Perspective Global Scale of Operations Diversified Worldwide Source & Arbitrage Opportunities Diversified International Shipping Customer Base

7 Categories of Risks & Challenges Customer Viability World System Risks Operating Risks Country/Region Competition A thriving bunker market does not exist with an ailing shipping i market Challenges are Interconnected

8 Interconnected Risks & Challenges Rising bunker prices increase stress on shipping Country/Region Economic/Political Stability Taxation Terrorism Competition varies from port to port.to port Operating Risks Quality & Systems control Financial Resources Human Capital Customer Viability Extreme Stress Shipping Rates Depressed Payment Performance Competition Independent Suppliers Bunker Traders Major Oil Companies National Oil companies International trading firms Terminalling companies Shipping related firms Margin Compression Volume focused-new Ports Differentiation Challenge World System Risks Oil Prices Exchange/Interest Rates Global Demand Geopolitical unrest Supply Disruptions Environmental Regs Legal Structuret Maritime Liens Natural Disasters Influence of new players Environmental Minefield Marpol Annex VI IMO ECA s U.S.ECA LSFO Availability Alternative Fuels LNG

9 Focus on Controllable Risks Can t be risk adverse or insure all risks Country/Region Operating Risks Quality & Systems Control Financial Resources Human Capital Customer Viability Extreme Stress Shipping Rates Payment Performance Competition Total Commercial Risk Management: Differentiation: Quality Offering Global - Risk Management Talent Experience Global l Risks Oil Prices Exchange/Interest Rates Global Demand Geopolitical Supply Disruptions Environmental Regs Regulatory Issues Legal Structure Natural Disasters Influence of new players Economic/Political Stability Taxation Terrorism Trading, Management, Operations Controls DOA s Trade Finance

10 Opportunities Amidst Volatility New Offerings Acquisitions/Mergers Competition varies from port to port.to port Business Model needs to fit port Diversification Risk Management Products Higher Risk Higher Reward?

11 Who are the Game Changers in the Bunker Industry? PHYSICAL TRADERS FINANCIAL TERMINALLING SHIPPING

12 Crystal Ball Gazing Technology s Role Will Grow

13 Only dynamic and transparent bunker sale system >8000 completed auctions to date 11 MM metric tons sold on site Average 12 bids per auction Provides full audit trail Demonstrated lowest prices vs. Platt s Singapore, Khor F/Fuj off shore, 4

14 Conclusion Bunker Market Will Remain In Flux Joint Ventures - Consolidation Will Increase Diversification of Bunker Players Will Continue Year of The Golden Rabbit Proceed Like a Rabbit

15 Thank You Tom Reilly - Chief Executive Officer

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