Intertanko Vetting Seminar

Athens – May 15, 2007

Tim Plummer
President
Tesoro Maritime Company
Tesoro Corporation
3
Tesoro Today 4

2006
Fortune “150” # 132
Global “500” # 406
Revenues $ 18.1 billion
Refining & Marketing 100%
Enterprise Value $ 5.1 billion*
First refinery operated 1969
* As of January 26, 2007
The Tesoro System 5

Kenai, Alaska Tesoro System Highlights

• 72 mbpd
• 4.9 complexity
• Key product: Jet
• 96 retail sites
Martinez, California
• 166 mbpd
• 13.5 complexity
• Key products:
CARB Gasoline
& CARB Diesel
• 89 retail sites
Los Angeles, California
• 100 mbpd
• 16.4 complexity
• Key products: CARB
Gasoline & CARB Diesel
• Approximately 310
retail sites
Kapolei, Hawaii
Auburn Office
• 94 mbpd
• 4.5 complexity
• Key product: Jet
• 34 retail sites
• 7 Refineries
• 663 mbpd total crude capacity
• 9.7 complexity
• Retail network of over 860 sites
• Over 6,000 Employees
Anacortes, Salt Lake City, Utah Mandan,
Washington • 58 mbpd North Dakota
• 115 mbpd • 6.3 complexity • 58 mbpd
• 8.2 complexity • Key products: • 7.8 complexity
• Key product: Gasoline & Diesel • Key products:
Gasoline • 117 retail sites Gasoline & Diesel
• 69 retail sites • 112 retail sites
Calgary
Office
London Office
Denver Office
Long
Beach Corporate Office
Office

RETAIL BRANDS

Singapore
Office
Over 500% Total Shareholder Return Since 2003 6

Acquisitions
Growth through Strategic Acquisitions Improve Financial Performance Improve Financial
Performance

Anacortes
Acquired L.A. Refinery
Kapolei
Acquired Acquisition
Golden Eagle Announced
Salt Lake City &
Acquired
Mandan Acquired

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Marine Structure 7

Tesoro Corporation

Tesoro Maritime Company

Gold Star Tesoro Far East

Maritime Company Maritime Company

U.S. Flag Activity Non U.S. Flag Activity

Refinery Associated Berths -1 8

• Hawaii SPM Terminal

– Kapolei Refinery on Oahu
– Crude & Products
– Max dwt = 150,000
– Max LOA = 945 ft. – Max Draft = 57 ft. – UKC = 12 ft.
• KPL Dock – Nikiski, Alaska
– Kenai Refinery
– Crude & Products
– Max dwt – 125,000 (summer) – 70,000 (winter)
– Max LOA = 850 ft. – Max Draft 37 ft. – UKC = 5 ft.
– Max cargo volume = 500,000 gross bbls.
Refinery Associated Berths - 2 9

• Anacortes Outside Berth

– Anacortes, Washington Refinery
– Crude & Products
– Max dwt = 125,000 (State of Washington restriction)
– Max LOA = 987 ft. – Max Draft = 45 ft.
• Amorco Wharf
– Golden Eagle Refinery, Martinez, California
– Crude
– Max dwt – 190,000
– Max LOA = 1000 ft. – Max Draft 38 ft. FW
Refinery Associated Berths - 2 10

• Long Beach Terminal Berths 84A & 86

– Los Angeles, California Refinery
– Crude & Products
– Max dwt = 130,000
– Max LOA = 1000 ft. – Max Draft = 45 ft.
Tesoro Time Chartered Fleet 11

• 2 – Suezmax
• 3 – Aframax
• 5 – MR’s
– 9 are Double Hull, 1 is Double Bottom

• 11 – Barges (U.S. West Coast & Hawaii)

– 10 are double Hull
Vetting
IMPORTANCE 13

• Protection of people
• Protection of the environment
• Financial exposure
• Business disruption
• Our relationship with stakeholders
• Our reputation as a publicly owned company
• In Alaska we are the coil spill plan holder
WHEN 14

• Tesoro Corporation policy requires that all vessels

must be vetted and approved before they can:
Be chartered-in
Perform under a COA
Carry cargo which Tesoro has an interest
Call at a Tesoro facility
WHY 15

• To ensure ships comply with applicable rules,

regulations and accepted industry practices in
respect to safety, pollution prevention and
operational procedures.
• To ensure that the quality of the ship, crew and
owner meet our requirements
• To ensure that a ship can safely arrive, moor and
depart our facilities in respect to a vessel’s
particulars, draft and mooring capabilities
WHY 16

• We don’t think we know how to operate your

tankers better than you do,
BUT,
– Not all tankers are the same
– Not all crews are the same
– Not all operators/managers are the same
– Not all owners are the same
HOW 17

• A dedicated vetting system - TASC

• A designated vetting group
• An established process
• Clearly established general criteria
VETTING SYSTEM - TASC 18

• TASC – Tesoro Acceptance & Ship Clearance System

• Internet based
• Covers, tankers, barges & bulk carriers
• Linked with Q-88
• Linked with LMIU (Lloyd’s Marine Information Unit)
• One process and one set of records
• Feedback from Terminal feature
• Developed & supported by Marine Information Systems
VETTING GROUP 19

• Designated group of seven

– 5 Marine Superintendents
– 1 Port Captain
– Myself as GM Shipping Operations
• All Unlimited Masters
VETTING PROCESS - 1 20

• Vetting requests are submitted in TASC

• Detailed review of:
– Tesoro Vessel Questionnaires (owners submit
questionnaires via Q-88 (www.Q88.com)
– Lloyd’s MIU
– SIRE
– U.S. Coast Guard PSIX
– Equasis & Tokyo MOU
– Internal Facility Feedback
VETTING PROCESS - 2 21

– Facility specific acceptability

• Draft, mooring, KTM, DWT, LOA, Beam, etc.
• Facility specific recommendation is made to
approve or reject
• Final determination to approve or reject is made
and sent to requestor
GENERAL CRITERIA 22

• Red flags
– Single hulls
– CBT (Clean ballast tankers)
– Tankers without IGS
– OBO’s over 12 years old
– OBO’s not in continuous wet service for at least 3
consecutive voyages
– Vessels with non-approved P&I Club
GENERAL CRITERIA 23

• Key criteria in Tesoro system

– Hawaii SPM ( official dwt, BMA, draft)
– Alaska (draft, cargo volume, mooring)
– Puget Sound (dwt)
– San Francisco (draft, KTM)
EXPERIENCE 24

• Will vet 600 – 700 vessels per year

• Rejection rate - 6.4% since Jan 06
– Poor SIRE reports
– Past experience with vessel/owner
– Inadequate mooring system
SUMMARY 25

We really don’t think we know how to

operate your tankers better than you do,
but we have a lot on the line as well.
 26

Thank you !!