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Vessel Dwt Vessel DwtNordic Apollo 159,999 Nordic Hunter 151,400Nordic Aurora 147,262 Nordic Jupiter 157,411Nordic Breeze 158,597 Nordic Mistral 164,236Nordic Cosmos 159,998 Nordic Moon 159,999Nordic Discovery 153,328 Nordic Passat 164,274Nordic Fighter 153,328 Nordic Saturn 157,332Nordic Freedom 163,455 Nordic Sprite 147,188Nordic Grace 149,921 Nordic Vega 163,000Nordic Harrier 151,475 Nordic Voyager 149,591Nordic Hawk 151,475 Nordic Zenith 158,645 Total dwt 3,121,914
The Nordic Harrier (previously named Gulf Scandic) was redelivered to us in October 2010. The vessel had been operated by the charterers since the autumn of 2004. The vessel had not been technically operated according to sound maintenance practices by the charterer. Therefore, NAT has a claim for drydocking and other costs that the charterer is obligated to cover under the bareboat charter. As previously advised, the matter is now in arbitration. We expect it to be heard in 2013.
The Company continues to install equipment onboard the vessels to reduce energy consumption.
The graph shows the development of bunker prices in $/ton. Based on a daily bunker consumption of 50 tons, a fall in bunker prices of $100/ton represents a $5,000 per day saving per vessel. The quantity and the cost of bunkers consumed are important factors for establishing the time charter equivalent (TCE).
Link to the graph: http://hugin.info/201/R/1677024/546797.pdf
We continue to keep high technical quality of our fleet. Total off hire (out of service) for 4Q2012 was 206 days for our fleet of which 157 days were planned off hire.
During 2012, 8 of our vessels were in planned drydock. We have 6 drydockings planned for 2013. In isolation, it is an advantage to dock a vessel in a period when tanker earnings are low. In the autumn of 2012 we used extra time in dock to upgrade some of our vessels.
World Economy and the Tanker Market
The outlook for the world economy is uncertain. Seaborne imports of crude oil into the US decreased over the recent past. We do, however, note that the travel distances of crude oil coming into the US have increased, meaning that ton-miles for crude going to the US has seen a small increase. Going forward, shale oil and tar sand oil projects may impact the US and Canadian oil sector. These projects are vulnerable to reduced oil prices. Demand for vessels and accordingly our freight rates are partly driven by ton-miles, that is to say that not only volumes of crude, but also the voyage distance affects tanker demand. Moreover, recent data indicates that ton-miles are showing growth in line with the fleet development for 2013 as a result not only of economic recovery but changing trade patterns leading to longer voyages.
The European economies are making progress in agreeing to uniform banking terms and financial assistance packages. European economies, however, continue to run significant deficits and face mounting debt, while resistance to deficit reduction measures remains strong. The economies of the Far East generally show continuing growth, although at a slower pace than before. Annual crude imports into China totaled a new record high in 2012. Tanker market rates are also affected by newbuildings that enter the markets, increasing the supply of vessels. Increased scrapping impacts supply in the other direction. As a matter of policy the Company does not attempt to predict future spot rates.
