Euronav Annual Report 2019 Version 20 April PDF
Euronav Annual Report 2019 Version 20 April PDF
Euronav Annual Report 2019 Version 20 April PDF
Annual
report
Shareholder letter 01
Quick facts 02
Highlights 2019 04
Special report
Directors’ report
Company profile 19
Highlights 2019 20
Corporate Governance
Statement 32
Activity report
Human resources 76
ESG at Euronav,
it’s in the DNA 80
Glossary 92
Shareholders’ diary 2020
THURSDAY 7 MAY 2020
Announcement of first quarter results 2020
(b) the annual report includes a true and fair view of the
evolution of the activities, results and situation of Euronav NV
and the entities included in the consolidation, and contains a
description of the main risks and uncertainties they may face.
Key figures
Consolidated statement of profit or loss 2011 - 2019
(in thousands of USD) 2019 H 2018 G 2017 2016 2015 2014 2013 2012 2011
Restated A
Revenues 932,377 600,024 513,368 684,265 846,507 473,985 304,622 410,701 394,457
EBITDAB 540,668 231,513 273,451 475,005 612,659 202,767 100,096 120,719 128,368
EBIT 202,966 (39,179) 43,579 247,241 402,453 41,814 (36,862) (56,794) (40,155)
Net profit 112,230 (110,070) 1,383 204,049 350,301 (45,797) (89,683) (118,596) (95,986)
TCE C YEAR AVERAGE 2019 2018 2017 2016 2015 2014 2013 2012 2011
VLCC 35,874 23,005 27,773 41,863 55,055 27,625 18,300 19,200 18,100
Suezmax 37,747 30,481 22,131 26,269 35,790 25,930 22,000 24,100 27,100
Spot Suezmax 24,119 15,784 18,002 27,498 41,686 23,382 16,600 16,300 15,400
IN USD PER SHARE 2019 2018 2017 2016 2015 2014 2013 2012 2011
Number of shares D 216,029,171 191,994,398 158,166,534 158,262,268 155,872,171 116,539,017 50,230,437 50,000,000 50,000,000
EBITDA 2.50 1.21 1.73 3.00 3.93 1.74 1.99 2.41 2.57
EBIT 0.94 (0.20) 0.28 1.56 2.58 0.36 (0.73) (1.14) (0.80)
Net profit 0.52 (0.57) 0.01 1.29 2.25 (0.39) (1.79) (2.37) (1.92)
IN EUR PER SHARE 2019 2018 2017 2016 2015 2014 2013 2012 2011
Rate of exchange 1.1234 1.1450 1.1993 1.0541 1.0887 1.2141 1.3791 1.3194 1.2939
EBITDA 2.23 1.05 1.44 2.85 3.61 1.43 1.44 1.83 1.98
EBIT 0.84 (0.18) 0.23 1.48 2.37 0.30 (0.53) (0.86) (0.62)
Net profit 0.46 (0.50) 0.01 1.22 2.06 (0.32) (1.29) (1.80) (1.48)
HISTORY OF DIVIDEND
2019 2018 2017 2016 2015 2014 2013 2012 2011
PER SHARE
Dividend (USD per share) 0.35 E 0.12 0.12 0.77 1.69 0.00 0.00 0.00 0.00
Of which interim div. of 0.06 0.06 0.06 0.55 0.62 0.00 0.00 0.00 0.00
A The comparative figures for 2013 have been restated following the application of IFRS 10 & IFRS 11 on Joint Arrangements.
B EBITDA (a non-IFRS measure) represents operating earnings before interest expense, income taxes and depreciation expense attributable to us. EBITDA is presented to provide investors
with meaningful additional information that management uses to monitor ongoing operating results and evaluate trends over comparative periods. We believe that EBITDA is useful to
investors as the shipping industry is capital intensive which often brings significant cost of financing. EBITDA should not be considered a substitute for profit/(loss) attributable to us or
cash flow from operating activities prepared in accordance with IFRS as adopted by the European Union or as a measure of profitability or liquidity. The definition of EBITDA used here
may not be comparable to that used by other companies.
C Time Charter Equivalent.
D Excluding 4,946,216 shares held by the Company in 2019 (2018: 1,237,901 shares and 2017: 1,042,415 shares).
E The total gross dividend paid in relation to 2019 of USD 0.35 per share is the sum of the interim dividend paid in October 2019 in addition to the proposed amount of USD 0.29 per share
proposed to the Annual Shareholder’s Meeting of 20 May 2020.
F Ratio is based on the actual exchange rate EUR/USD on the day of the dividend announcement if any.
G The Group initially applied IFRS 15 and IFRS 9 at 1 January 2018. Under the transaction methods chosen, comparative information is not restated.
H The Group initially applied IFRS 16 at 1 January 2019, using the modified retrospective approach. Under this approach, comparative information is not restated.
ASSETS
Non-current assets 3,362,594 3,606,210 2,530,337 2,673,523 2,665,694 2,558,505 1,728,993 2,065,448 2,159,442
Current assets 802,249 521,141 280,636 373,388 375,052 537,855 191,768 297,431 291,874
TOTAL ASSETS 4,164,843 4,127,351 2,810,973 3,046,911 3,040,746 3,096,360 1,920,761 2,362,879 2,451,316
LIABILITIES
Equity 2,311,855 2,260,523 1,846,361 1,887,956 1,905,749 1,472,708 800,990 866,970 980,988
Non-current liabilities 1,536,938 1,579,706 805,872 969,860 955,490 1,328,257 874,979 1,186,139 1,221,349
Current liabilities 316,050 287,122 158,740 189,095 179,507 295,395 244,792 309,770 248,979
TOTAL LIABILITIES 4,164,843 4,127,351 2,810,973 3,046,911 3,040,746 3,096,360 1,920,761 2,362,879 2,451,316
On 23 October 2017, the Company announced that the USD 150 Euronav’s shareholders’ structure
million senior unsecured bonds issued by Euronav Luxembourg According to the information available to the Company at the
S.A. and guaranteed by Euronav NV are listed on the Oslo time of preparing this annual report on 24 March 2020 and
Stock Exchange as of that day. On 14 June 2019 the Company taking into account the latest transparency declarations or
announced that it had completed a tap issue of USD 50 million other officially filed information with supervising authorities, the
under its existing senior unsecured bond loan. The amount shareholders’ structure is as shown in the table:
outstanding after the tap issue is USD 200 million. The bonds
have been allocated the following ISIN code: NO 0010793888.
SHAREHOLDERS’ STRUCTURE
AS OF 24 MARCH 2020:
The
Shareholder Shares Percentage
Euronav
Saverco NV* 11,497,088 5.23%
Marshall Wace 11,199,893 5.09%
Euronav (treasury shares) 4,946,216 2.25%
Share
Other 179,461,250 81.56%
*Including shares held directly or indirectly by or for the benefit of the ultimate
beneficial owner.
DAILY VOLUME OF TRADED SHARES 2019
9,000,000
EDITOR’S NOTE:
8,000,000
SHAREHOLDERS’ STRUCTURE AS OF 8 APRIL
2020, DATE OF CLOSING FOR PUBLISHING:
7,000,000
4,000,000
Euronav (treasury shares) 4,946,216 2.25%
Other 215,078,497 97.75%
3,000,000
2,000,000
Total 220,024,713 100.00%
1,000,000
0
31/12/2018
31/01/2019
28/02/2019
31/03/2019
30/04/2019
31/05/2019
30/06/2019
31/07/2019
31/08/2019
30/09/2019
31/10/2019
30/11/2019
31/12/2019
13
12
11
10
31/01/2019
28/02/2019
31/03/2019
30/04/2019
31/05/2019
30/06/2019
31/07/2019
31/08/2019
30/09/2019
31/10/2019
30/11/2019
31/12/2019
Dear Shareholder the tanker market with this crude being transported long haul and
absorbing a high level of tonnage.
2019 has been another busy year for Euronav and one largely
of preparation for IMO 2020. The switch from 3.5% to 0.5% During June, our Oslo-listed bond was increased in size by a third
sulphur content in the bunker fuel used to power the world’s to USD 200 million with an oversubscribed offer at premium to
shipping fleet was implemented on January 1, 2020. This par value. It is critical for Euronav to have consistent access
regulatory change, otherwise known as IMO 2020, required to a diverse funding base as shipping banks, under regulatory
extensive preparation by the company and it is pleasing to and commercial pressure, will continue to focus their lending
report our smooth adoption at Euronav of this 85% reduction in to fewer players.
sulphur emissions which improves the environmental footprint
of the shipping industry at large. Euronav has for 2020 onwards implemented the new Belgian
code of companies and associations which will allow the
It has also been a year of executive repositioning for Euronav. Company to distribute dividends on a quarterly basis for the
The board appointed Hugo De Stoop as the company’s first time. This is an important development for shareholders
CEO after a thorough international selection process and in and will allow management to better align shareholder returns
December we welcomed Lieve Logghe as Euronav’s new CFO. with the Company’s operating performance. Under its dividend
Lieve comes with a wealth of experience from a non-shipping policy, Euronav targets a return of 80% of net income to
industrial background and will contribute to our seasoned shareholders via share buy back and dividends including a fixed
executive management team. cash dividend per share of USD 12 cents per annum with this
policy being applied to the final dividend for 2019.
A robust start to the year in freight rates drove a profitable Q1
reflecting a thinly balanced market between crude demand and Euronav is committed to leading the highest standards of
vessel supply. The middle two quarters were more challenging corporate governance and social responsibility. During the year
as, in preparation for IMO 2020, refinery maintenance we established an ESG and Climate Committee at board level,
programmes were longer, deeper and more detailed than we are a supporter of the Poseidon Principles (see special
anticipated thus reducing tanker demand during a seasonally report for more details) and will become part of the Carbon
weaker period. Disclosure Programme (CDP) later this year. The Supervisory
“
Board, with equal gender representation welcomes what we
believe is a secular trend of increased focus on ‘ESG’ and
look forward to driving further improvement with real tangible
targets for emissions reduction to be announced during 2020.
Euronav is fully prepared to grasp all
opportunities that come along with The Supervisory Board and the Management Board recognise
and thank our employees for their hard work and dedication over
fluctuating markets the past 12 months and it is thanks to them that the Company
delivered so much during 2019. Euronav has positioned itself
However, the final quarter saw an extraordinarily strong freight for the next phase of the tanker cycle with a strong operational
market as a constructive set up between vessel demand and management team, robust financial structure backed by a liquid
supply was augmented by a number of short term catalysts – traded share and excellent access to capital markets.
sanctions, geopolitical risk and reduced operational fleet (due to
US sanctions) – all combined to drive VLCC and Suezmax rates to Yours sincerely,
their highest level since 2008.
Carl Steen
Looking forward there will be challenges in 2020 for our market Chairman
from the impact of COVID-19 on the world economy and on the
crude oil demand in particular, as well as from market share
strategies of oil producing countries and their effect on the crude
oil price. However, the balance sheet strength Euronav possesses
will provide protection for the business during this period of
uncertainty and these challenges also provide opportunities as
reflected in our recent purchase of four resale VLCCs at what we
believe are attractive prices.
Quick facts
3,110
PEOPLE
2,900 seafarers of many different nationalities work aboard
27** SUEZMAX
EURN EURN 1 million barrels
LISTED LISTED average age: 11 years
EURONEXT
NYSE 42 VLCC
URN EURN 2 million barrels
STED LISTED
average age: 7,3 years
ONEXT
NYSE 2 VPLUS
3 million barrels
average age: 17 years
* Proportionate EBITDA in
thousands of USD
Highlights 2019
2 JANUARY 2019
As part of its capital allocation strategy, Euronav continued
purchasing its own shares on NYSE and Euronext Brussels stock
exchanges. Several buybacks took place between January and
July 2019.
9 JANUARY 2019
17 JANUARY 2019
4 FEBRUARY 2019
11 FEBRUARY 2019
1 JULY 2019
11
10
Dec 2018 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Large crude tanker market Owner Owner Owner Owner Owner Owner
price ticket of over USD 90 million today) but also requires high 60
levels of working capital, to operate and maintain the vessel.
Additionally, the operational life of large tankers is shorter 45
CONSTRUCTION
Figure 2: Average age of VLCC before recycling
10% Deposit on Purchase
35
30
10% 1 Stage Payment
25
Age in Years
20
15
10% 2 Stage Payment
5
60% Final Payment On Vessel Delivery
0
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
DELIVERY
18-24 months
And when it comes to funding, the large crude tanker market The volatility and cyclicality is stimulated further due to the
historically differs from other capital-intensive assets, such as typical payment profile of a new large tanker. As only around
real estate and aircraft. As vessels trade internationally, ship 5-10% deposit is required, barriers to entry are very low.
owners can choose to adopt less formal corporate structures. This historically has attracted speculative investors adding
This often leads to higher levels of volatility and risk to be taken further to the ‘boom and bust’ nature of the large crude tanker
into account when discussing funding. market as vessel supply increases with these additional risky
investments.
2. Fragmented What happens is that with the low deposits and a lead time of
around 18-24 months to construct a VLCC, speculative ship
The structure of the large tanker market is simple with many owners/investors order VLCCs with the sole intention to sell
small owners and few large customers (as illustrated in figure 1). them before delivery, by hoping that during the construction
The vessel supply side is very fragmented in terms of its time the asset prices would rise (as figure 3 shows) and they
ownership structure with over 100 different owners of the 750 generate a ‘quick and speculative’ profit.
VLCCs in operation and a similar number for the 500 Suezmax
tankers that operate globally. This fragmentation in ownership
is completely opposite to the customer side which is highly History of how this capital
concentrated with only 20-30 key customers to serve. These intensive market has been
key customers are a diverse group of oil majors, national oil
suppliers, major refinery companies and oil trading houses.
traditionally funded
(See 2017 Special Report from Euroav ‘Basics of the tanker
shipping market’ on www.euronav.com) Traditionally and historically, the capital for developing shipping
companies came from two sources: bank finance and legacy
3. Highly cyclical investment from ship owning families. The existence of family
capital together with the availability of low cost bank financing
The large crude tanker market is a highly cyclical market with made that owners had little appetite nor incentive to seek for
freight rates driven by numerous factors, but in the medium other sources of funding.
to long-term, vessel supply and demand are the main drivers.
Vessel supply is the one factor controlled by the shipping All this has changed over time, and dramatically over the last
industry and same is impacted largely by capital flows, as decade as a mix of regulatory, commercial and allocation
well as availability of financing. A large crude tanker market factors have all combined to substantially reduce the appetite
cycle generally begins with an oversupplied market where too of the banks to continue funding shipping and the large crude
many vessels depress the earnings. This will cause increased tanker market to the same degree.
recycling of older vessels as these become uneconomical
to run. As vessels are removed from the fleet, the market Shipping finance has seen a rather radical transformation since
will become rebalanced, causing increased earnings. This the early 1990’s which, among other factors, has been linked
encourages the ordering of new tonnage. Once these newly to the evolution of shipping companies from predominantly
contracted vessels start delivering to the market it will slowly, family businesses to more corporate-oriented structures,
once again, become oversupplied and earnings will hit another and was driven by their ever increasing reliance on global
trough – bringing us back where the cycle started. capital markets. The financing evolved from plain vanilla
bank loans through charter backed financing, to higher asset
450
policy goals in many nations together with the technological
400 developments in the field of solar power generation and
electric vehicles, there seem to be growing consensus about
350
the outlook of such peak in oil demand.
300
150
Figure 5: Peak of oil demand growth
2010 2011 2012 2013 2014 2015 2016 2017 2018
130
millions of barrels of oil per day
120
As a consequence and to avoid similar situations in the future, For a financier/investor in the large crude tanker market this
new regulation emerged, the Basel III and IV reforms. Among becomes important as large tankers have an operational
other, these reforms oblige banks to have more collateral on lifetime of around 20 years. The forecasted peak oil demand in
their balance sheets before lending to the commercial space. combination with the lifetime of large tankers, makes financing
EU banks capital ratios have more than doubled since the pre- the large crude tanker market more challenging. To some
crisis (2007) levels (source: Citigroup, 19 September 2019). extent, same has been reflected already in recent years as LTV
This increase is clearly a consequence of greater regulatory (loan amount to ship value) have reduced from around 70-80%
focus on improving the stability and solidity of the EU banking a decade ago to 50-60% today.
Transparency
Energy transition –
3. Volatile earnings and asset values competing crude has key role to play
with more secure commercial propositions
Capital markets have existing structures and controls which 2. Good standards of governance
provide a robust and sustainable framework for investors
to have confidence that executive management teams and The lack of significant equity representation in the
boards conduct themselves and execute strategy correctly capitalisation of the large crude tanker market and shipping
and in a measurable way. Several agencies play a role when means that most shipping companies currently are privately
a company is listed as a publicly traded company. Stock held companies. This not always ensures the highest standard
exchanges require high standards of accounting discipline and of corporate focus and behaviour that investors would like
regulatory compliance. Investors will also demand a consistent to see. Encouragingly however is that capital markets where
application of best practice in terms of presentation and shipping is engaged are showing a distinct focus on rewarding
detail of financial performance. Finally, increasingly important those corporations engaged in the highest ethical standards of
are third party specialist agencies measuring outputs on corporate governance.
130
120
100
90
has already dropped by more than 30% from 2008 levels and
80
fuel consumption moved from 330 mt in 2008 to 268 mt
70 in 2018 despite 62% increase in global capacity
60
(source: Clarksons).
50
Source: Wells Fargo/Webber Research Figure 9: Shipping has the smallest carbon footprint
of any mode of transportation
Train
However, whilst positive, shipping in general as a wider
sector has to recognise it still has some steps to take to
improve and to be considered equal with other industrial and Airship
transportation sectors.
Source: www.timeforchange.org
Figure 8: Share of global primary energy Transportation per tonne of product reveals shipping has the
consumption by fuel
lowest and indeed a very limited carbon footprint as figure
Oil Coal Natural gas 9 shows. Financing via capital markets or from those banks
Hydroeletrical Nuclear energy Renewables remaining in ship finance will continue to see links with
in percent
50
sustainability. ESG including carbon reduction objectives,
quite correctly became part of the mainstream provision of
40
financing capital intensive sectors such as the large crude
tanker market.
30
Shipping more than any other transportation sector has The quoted part of the large crude tanker market today only
150 140,000
0 0
7. Full capture and embrace of ESG
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Vision and
Mission
Vision
To lead responsibly the global crude oil tanker industry.
To seize every opportunity to reshape our industry in an era
of unprecedented changes.
To promote and support sustainable programs to
minimizing the environmental impact of our industry.
Mission
For our society
The need to operate a safe and reliable fleet has never been By employing officers who graduated from the most reputable
more crucial and it is the most important strategic objective for maritime academies in the world, on board a modern fleet,
the Company. Euronav aims to be an efficient organization and Euronav aims to operate in the top end of the market. The
strives to deliver the highest quality and best possible service skills of its directly employed seagoing officers and shore-
to its customers. based captains and engineers give a competitive edge in
maintenance as well as in operations and delivery of offshore
projects.
Directors’ report:
Highlights 2019
Overview of the Market
2019 was the year when tanker markets recovered, and when The price of oil was relatively stable through 2019 with Brent
the market turned it did so with gusto. Crude oil tankers were fluctuating between USD 52 and USD 75 to average USD 64 per
fixed at time charter equivalent returns higher than ever seen barrel. The price of WTI traded at a discount to Brent through
before and the final quarter of the year saw tanker earnings the year and averaged USD 57 per barrel. The average price of
consistently above historical levels for most of the benchmark the OPEC basket was in line with Brent at USD 64. Following
routes. However, before being able to enjoy a final quarter steady price increases in the first quarter, with tightening of oil
of fantastic earnings, the tanker market had to endure three supplies from OPEC cuts, oil prices started falling in the second
quarters of oil production cuts, prolonged refinery turnarounds, quarter. This was on the back of concerns of falling oil demand
accelerating fleet growth and weak crude tanker demand. and key forecasting agencies continuously revised down their
projections for the year. In July the oil markets experienced
The year began with a strong baseline on the back of increased a sudden 8% price drop in a single day following a tweet
OPEC oil production towards the end of 2018, combined with announcing new US tariffs on Chinese imports, but the price
a fairly balanced fleet profile following robust 2018 recycling quickly recovered. Oil markets witnessed another price shock
activity. This all came to an abrupt end as OPEC and its allies in September when attacks on oil installations in Saudi Arabia
began implementing agreed production cuts in January 2019, initially triggered the steepest oil price surge in 30 years when
which saw OPEC production reduced by 1.4 mbpd in the first Brent rose from USD 60 to USD 69 in a single day, however panic
quarter of the year. OPEC production continued to decline was short lived, and prices came off again shortly after.
through 2019 to an average of 29.9 mbpd across the year. This
is 2 million barrels per day less than the average production in Oil demand growth weakened in 2019 and is estimated at
2018. between 0.7 mbpd and 1.0 mbpd by the various reporting
agencies. This is below the long-term annual growth average
While the official self-imposed supply constraints explain the of 1.1 mbpd (since 1990). While the first half of the year was
majority of the OPEC production decline it was also impacted particularly hard hit by weak oil demand, mainly due to a
by involuntary disruptions emanating from sanctions against slowdown in the global economy and concerns around a US-
countries such as Venezuela and Iran. The US conflict China trade war, this rebounded in the second half as refineries
with Venezuela cut production in the country by more than across the world started ramping up their throughput in
500 kbpd. This crude was primarily traded into the US on preparation for the IMO 2020 deadline for ships to burn bunker
Suezmaxes and Aframaxes, and these markets took a large fuels with a maximum sulphur content of 0.5%
hit as a consequence. The Iranian oil and shipping markets
have been subject to sanctions for some time but took a
further hit in May this year when waivers to buy Iranian crude World oil demand (mbpd)
were removed by the US administration. This left Iran with 105
no official outlets for their crude oil and production from the
country declined further and is now very low with exports 100
close to nil.
95
100
95
market.
200
The catalyst that eventually sent freight rates surging were the
150
US imposed sanctions on two subsidiaries of Cosco Shipping
at the end of September. There was initially some uncertainty
100
around exactly which sub-divisions of the company were
sanctioned, which led to all of the company’s ships being 50
Tanker Markets
The average Time Charter Equivalent (TCE) obtained by
the company’s owned VLCC fleet trading in the Tankers
International (TI) Pool was USD 35,900 per day for 2019,
compared to USD 23,035 per day in 2018.
250,000
250
200,000
200
150,000
150
100,000
100
50,000
50
0
-50,000 0
01 Jan 2014 01 Jan 2015 01 Jan 2016 01 Jan 2017 01 Jan 2018 01 Jan 2019 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
300
250
200
150
100
50
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Fleet Growth
At the start of the year the global fleet consisted of 722
VLCCs and 525 Suezmaxes. Fleet growth accelerated in both
segments particularly during the first half of the year and in
total the market took delivery of 67 new VLCCs and 26 Suezmax
vessels over the course of the year. In terms of fleet exits, the
prospect of an imminent change in the freight markets to more
prosperous returns was a discouraging factor for owners to
dispose of tonnage. In the VLCC segment there were 13 exits
and the Suezmax market saw just 6 vessels removed from the
trading fleet, a marked slowdown from the previous year. This
left VLCC fleet growth over 2019 of 7.5% and Suezmax fleet
growth at 3.8%.
80
60
speculative investment activity in the large tanker space. In
40 2019, the tanker sector recorded 33 new VLCC orders and 23
67 new Suezmax orders.
47 50
20 43
39
48
30 24 20
25 Focus remains on aging tonnage and the deployment of vessels
0
3
aged 20 years and older. They are largely untradeable in the
-19 -23 -15 -6 -8
-16 -13 commercial market, but some find employment in the storage
-20
-34 -41 -19 -33 sector or within oil company own systems predominantly
in the Far East. With regulatory pressure increasing, these
-40 older vessels are becoming less economical to run and their
mandatory periodical surveys become more costly. With this
-60 in mind we believe there is strong incentive for owners to
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 consider a permanent removal of vessels in this age group
Source: Clarksons going forward.
80
60
40
47 51
20
26 31 26 23
16 16 4
0 8 9
-4
-7 -2 -3 -12 -6
-14
-18 -20 -24
-20 -41
-40
-60
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source: Clarksons
FSO and FPSO market (15), Southwest Asia / Middle East (14), Mediterranean (9),
South America (8), Canada (5), 4 projects each for Caribbean
By the end of 2019 there were 406 floating production systems and China and 1 for the Pacific region.
in service or available worldwide among which were 175
FPSOs and 102 FSOs. This does not include 25 FPSOs that are Over 50% of the facilities responsible for production floater
available for reuse. In addition there is one FPSO that is out of fabrication and conversion are based in Asia. Keppel, Samsung
service for extended repairs. and Sembcorp continue to be the busiest yards each with at
least six projects underway.
In total 52 production floaters, nine FSOs and five MOPUs are
currently on order, which is three more than during 2018. New Projects in planning appraisal and
orders are expected to exceed the 14 deliveries scheduled in final design phase by region
2020, so the backlog should climb into the mid 50’s by year
end. Appraisal Planning Bidding/Final design
50
Currently, there are 211 floater projects in the appraisal,
45
planning, bidding or final design stage that may require a 40
floating production or storage system. Of these projects, 65 35
11
are in the bidding or final design stage and another 107 floater 30
projects are in the planning phase. For these planned projects, 25 15
the major hardware contracts are anticipated between 2021 20 24
12
3
Brazil
Africa
Northern Europe
Gulf of Mexico
Southwest Asia /
Middle East
Australia /
New Zealand
Mediterranean
Canada
Caribbean
Other South
The most active region for future projects would be Africa with a
total of 44 potential floater projects planned. Next is Southeast
Asia with 37 projects. Brazil remains in third place with 30
projects. The remaining regions have fewer potential projects
including Northern Europe (24), Gulf of Mexico (16), Australia Source: Energy Maritime Associates Pte Ltd
TCE of the Euronav Suezmax fleet fixed on long-term time Gulf Sunrise (VLCC, 2017) chartered by Tesoro for 5 years at
charters, including profit shares when applicable, was USD USD 35,750 per day.
32,680 per day (first quarter 2018: USD 23,850 per day).
Eco Bel Air (Suezmax, 2019) chartered by BP for 3 years at USD
JANUARY 25,000 per day.
Euronav
On 9 January 2019 Euronav delivered the Suezmax vessel The second quarter
Felicity (2009 – 157,667 dwt) to a global supplier and operator For the first half of 2019, the Company had a net loss of USD
of offshore floating platforms in accordance with a sale 19.0 million or USD 0.09 per share (first half of 2018: a net
agreement dated 31 October 2018. A capital loss on the sale of loss of USD 51.6 million or USD 0.31 per share). Proportionate
approximately USD 3.0 million has been recorded in Q4 2018. EBIDTA (a non-IFRS measure) for the same period was USD
The cash generated on this transaction after the repayment of 201.0 million (first half of 2018: USD 98.2 million). For the
debt is USD 34,7 million. The vessel will be converted into an second quarter of 2019 the average daily TCE obtained by the
FPSO and therefore has left the worldwide trading fleet. Company’s fleet in the TI pool was approximately USD 23,218
per day (second quarter 2018: USD 16,751 per day). The TCE
On 17 January 2019 Euronav has been included, for the second of Euronav VLCC fleet fixed on long-term charters, including
consecutive time, in the Bloomberg International Gender- profit shares when applicable, was USD 27,165 per day (second
Equality Index (‘GEI’). The reference index measures gender quarter 2018: USD 34,976 per day). The average daily TCE
equality across international company statistics, employee obtained by the Suezmax spot fleet was approximately USD
policies, external community support and engagement, and 17,217 per day (second quarter 2018: USD 12,883 per day).
gender-conscious product offerings. The GEI is voluntary and The TCE of the Euonav Suezmax fleet fixed on long-term time
has no associated costs. The index is not ranked. charters, including profit shares when applicable, was USD
30,375 per day (second quarter 2018: USD 20,882 per day).
In the market
Front Defender (VLCC, 2019) chartered by CSSA for 90 days at APRIL
USD 29,000 per day. Euronav
On 12 April 2019 Euronav registered a branch office in Geneva,
Dolviken (Suezmax, 2012) chartered by Vitol for 12 months at Switzerland. The purpose of this branch is to conduct the new
USD 25,250 per day. activities with respect to compliant fuel, including procurement
of compliant fuel on the wholesale market. This allows the
Trinity (Suezmax, 2016) chartered by Mercuria for 3 years at group to keep track of the market and buy compliant fuel when
USD 30,000 per day. convenient. One vessel of the fleet is used as floating storage.
“
In the market
Kassos I (VLCC, 2007) chartered by Pertamina for 3 months at
USD 23,500 per day.
Maria Grace (Suezmax, 2002) chartered by BPCL for 8 months On 18 June 2019 under the auspices of the Global
at USD 16,000 per day. Maritime Forum, Euronav was announced as a founding
supporter of the Poseidon Principles, a global framework
for assessing and disclosing the climate alignment of
financial institutions’ shipping portfolios. The Poseidon
Principles establish a common baseline to quantitatively
assess and disclose whether financial institutions’ lending
portfolios are in line with adopted climate goals. They are
consistent with the policies and amibtions of the Initial
Greenhouse Gas (GHG) Strategy adopted in April 2018 by
member states of the International Maritime Organization
(IMO). The strategy prescribes that GHG emissions from
international shipping must peak as soons as possible
and that the industry must reduce the total annual GHG
emissions by at least 50% of 2008 levels by 2050, with a
strong emphasis on zero emissions.
In the market
Maria P. Lemos (VLCC, 2018) chartered by Mercuria for 3
years at USD 31,000 per day.
2018: USD 17,773 per day). The TCE of the Euronav VLCC JULY
fleet fixed on long-term charters, including profit shares In the market
when applicable, was USD 32,790 per day (third quarter Sea Emerald (VLCC, 2019) chartered by Exxon Mobile for 3
2018: 31,374 per day). The average daily TCE obtained by years at USD 35,000 per day.
the Suezmax spot fleet was approximately USD 17,121 per
day (third quarter 2018: USD 14,919 per day). The TCE of the New Vision (Suezmax, 2018) chartered by Trafigura for 8
Suezmax fleet fixed on long-term time charters, including months at USD 27,500 per day.
profit shares when applicable, was USD 29,884 per day (third
quarter 2018: USD 29,624 per day). AUGUST
Euronav
On 5 August 2019 Euronav delivered its oldest VLCC, the VLCC
VK Eddie (2005 – 305,261 dwt), to her new owners. The vessel
was sold for conversion into an FPSO and shall therefore
leave the worldwide trading fleet. A capital gain on the sale of
approximately USD 14.4 million was recorded during the third
quarter.
In the market
DHT Taiga (VLCC, 2012) chartered by Philips 66 for 12 months
at USD 42,500 per day.
SEPTEMBER
Euronav
On 5 September 2019 Euronav announced details on its
approach towards the new Sulphur fuel regulations introduced
as part of IMO 2020. The Company established a dedicated
fuel procurement team and purchased in total 420,000 metric
tons of compliant fuel oil (0.5 & 0.1). The ULCC Oceania (2003
– 441,858 dwt) is used to store this inventory because of
its unique size and related economies of scale. In line with
Euronav’s strategy to retain a strong balance sheet to navigate
the tanker cycle, a new $100 million revolving loan facility was
secured with a club of banks in order to assist funding of this
compliant fuel inventory on the Oceania.
In the market
Nave Universe (VLCC, 2011) chartered by Petrobras for 2 years
at USD 33,000 per day.
In the market
29,400 30,481 C. Passion (VLCC, 2013) chartered by GS Caltex for 3 years at
Suezmax time charter
per day per day USD 42,500 per day.
Bacaliaros (Suezmax, 2003) chartered by Navig8 for 12 months On 22 January 2020 Euronav proudly announced that the
at USD 40,000 per day. Company has again been included in the Bloomberg Gender-
Equality Index (‘GEI’), for the third year in a row. The reference
DECEMBER index measures gender equality across internal company
Euronav statistics, employee policies, external community support
On 19 December 2019 Euronav NV invited its shareholders and engagement, and gender-conscious product offerings.
to attend the Extraordinary General Meeting to be held on
Thursday 23 January 2020 to approve the changes of the On 23 January 2020 Euronav NV confirmed that the
Company’s articles of association to bring them in line with the attendance quorum for the Extraordinary General Meeting,
new Belgian code of Companies and Associations. invited on 19 December 2019, was not reached. A second
Extraordinary General Meeting with the same agenda
In December a first meeting of the newly installed ESG & convened on Thursday 20 February 2020.
Climate Committee was held.
On 12 February 2020 Euronav announced the acquisition of
On 2 January 2020 Euronav announced that it had entered three VLCCs under construction for an aggregate purchase
into a sale and leaseback agreement for three VLCC vessels price of USD 280.5 million. The vessels are the latest
with Taiping & Sinopec Financial Leasing Ltd. Co. The three generation of Eco-type VLCCs. The acquisition will fully be
VLCCs are the Nautica (2008 – 307,284), Nectar (2008 – funded by current liquidity and debt capacity. Upon delivery
307,284) and Noble (2008 – 307,284). The vessels were ( fourth quarter of 2020, January and February 2021) these
sold for a net en-bloc purchase price of USD 126 million. The vessels will reduce the average age of the Euronav VLCC fleet.
vessels were delivered to their new owners on 30 December
2019. Euronav has leased back the three vessels under a On 25 February 2020, Euronav NV announced it has sold the
54-months bareboat contract at an average rate of USD Suezmax vessel M/T Finesse (2003 – 149,994 dwt) for USD
20,681 per day per vessel. At the end of the bareboat contract, 21.8 million. A capital gain on the sale of approximately USD
the vessels will be redelivered to their new owners. Euronav 8.3 million was recorded during the same quarter.
enjoys purchase options exercisable after the first year.
On 6 March 2020, Euronav announced the acquisition of one
In the market VLCC under construction for an aggregate purchase price of
Donat (Suezmax, 2007) chartered by Chevron for 18 months at USD 93 million. This modern Eco-type VLCC is due for delivery
USD 35,000 per day. in the first quarter of 2021 and is an identical sister ship of the
3 VLCCs acquired last month.
Los Angeles Spirit (Suezmax, 2007) chartered by Petco for 12
months at USD 37,500 per day.
Looking at the supply side, the delivery programme in 2020 The current uplift in oil supply and oil price structure will help
shows fewer newbuildings scheduled for delivery versus underpin additional shipping demand into the second half
2019. However at 43 VLCC newbuildings and 23 Suezmaxes of the year. However prospects for the year as a whole will
this remains a considerable addition of capacity. The level of depend on the duration and depth of the impact on economic
fleet removals in 2019 was relatively subdued and many older growth from the devasting effects from the COVID-19-virus
vessels found employment in the storage sector around the and its economic dislocation.
implementation period of IMO 2020. It is unlikely that all of
these older vessels will return to the commercial market and Demand for shipping shall have challenges from an inevitable
they will likely become permanent storage vessels or be sold build in crude inventory levels due to the current disconnect
for recycling. between oil supply and oil demand.
Corporate
Governance
Statement
Introduction
Reference Code
1.4 SHAREHOLDERS AND SHAREHOLDERS’ Including shares held directly or indirectly by or for the benefit of the ultimate
1
beneficial owner
STRUCTURE
2. Board of directors and board committees Hereunder follows a list of biographies of the members
Preliminary note: with effect as of 20 February 2020, of the Board of Directors in the composition as of 31
Euronav’s governance structure was revised to adopt a two December 2019.
tier governance model. As of this date the body formerly
known as the Board of Directors was converted into a Carl Steen - Independent Director - Chairman
Supervisory Board and the former Executive Committee Carl Steen was co-opted Director and appointed Chairman of
ceased to exist and was replaced by a Management Board, in the Board of Directors with immediate effect after the Board
accordance with relevant provisions of the CCA. meeting of 3 December 2015. Mr Steen is also a member
of the Audit and Risk Committee and a member of the of
2.1 BOARD OF DIRECTORS/SUPERVISORY BOARD the Corporate Governance and Nomination Committee. He
graduated from Eidgenössische Technische Hochschule
First in Zurich, Switzerland in 1975 with a M.Sc. in Industrial and
Type of End term
Name appointed Management Engineering. After working as a consultant in
mandate of office
as director a logistical research and consultancy company, he joined a
Chairman - Norwegian shipping company in 1978 with primary focus on
Carl
Independent 2015 AGM 2022 business development. Five years later, in 1983, he joined
Steen
Director Christiania Bank and moved to Luxembourg, where he was
Paddy responsible for Germany and later the Corporate Division.
Director 2003 9 May 2019
Rodgers1 In 1987, Mr Steen became Senior Vice President within the
Shipping Division in Oslo and in 1992, he took charge of the
Daniel R.
Director 2004 9 May 2019 Shipping/Offshore and Transport Division. When Christiania
Bradshaw2
Bank merged with Nordea in 2001 he was made Executive
Anne-Hélène Independent Vice President within the newly formed organization while
2015 AGM 2022 adding the International Division to his responsibilities. Mr
Monsellato Director
Steen remained Head of Shipping, Offshore and Oil Services
Ludovic and the International Division until 2011. Since leaving
Director 2015 AGM 2021
Saverys
Grace
Independent
Reksten 2016 AGM 2020
Director
Skaugen
Steven Independent 6 December
2018
Smith3 Director 2019
Anita Independent
2019 AGM 2021
Odedra4 Director
Carl Independent
2019 AGM 2021
Trowell5 Director
1
Mr Rodgers resigned from his position as director effective as of the AGM
of 9 May 2019.
2
Mr Bradshaw’s mandate expired at the AGM of 9 May 2019.
3
Mr Steven Smith resigned from his position as independent director effective
as of 6 December 2019.
4
Ms Anita Odedra was appointed Independent Director at the AGM of 9 May
2019.
5
Mr Carl Trowell was appointed Independent Director at the AGM of 9 May
2019.
Nordea, Mr Steen has become a non-executive Director for in cross border listing transactions, in particular with the U.S.
the following listed companies in the finance, shipping and She is a Certified Public Accountant in France since 2008 and
logistics sectors: Golar LNG and Golar MLP, both part of the graduated from EM Lyon in 1990 with a degree in Business
same group and where he also sits on the Audit Committee, Management.
Wilh Wilhelmsen and Belships. Mr Steen is also a member of
the Board of Directors of CMB. Ludovic Saverys - Director
Ludovic Saverys serves on the Board of Directors since 2015
Anne-Hélène Monsellato - Independent Director and is a member of the Remuneration Committee as well
Anne-Hélène Monsellato serves on the Board of Directors as of the recently installed ESG & Climate Committee. Mr
since her appointment at the Annual General Meeting Saverys currently serves as Chief Financial Officer of CMB
(AGM) of May 2015, and is the Chairman of the Audit and NV and as General Manager of Saverco NV. During the time
Risk Committee. She can be considered as the Audit and he lived in New York, Mr Saverys served as Chief Financial
Risk Committee financial expert for purposes applicable for Officer of MiNeeds Inc. from 2011 till 2013 and as Chief
corporate governance regulations and Article 96 paragraph Executive Officer of SURFACExchange LLC from 2009 till
1, 9° of the Belgian Company Code. Since June 2017, Mrs 2013. He started his career as Managing Director of European
Monsellato serves on the Board of Directors of Genfit, a Petroleum Exchange (EPX) in 2008. From 2001 till 2007 he
biopharmaceutical company listed on Euronext, and is followed several educational programs at universities in
the Chairman of the Audit Committee. Mrs Monsellato is Leuven, Barcelona and London from which he graduated with
an active member of the French National Association of M. Sc. degrees in International Business and Finance.
Directors since 2013. In addition, she is serving as the Vice
President and Treasurer of the American Center for Art and Grace Reksten Skaugen - Independent Director
Culture, a U.S. public foundation based in New York. From Grace Reksten Skaugen serves on the Board of Directors
2005 till 2013, Mrs Monsellato served as a Partner with Ernst since the AGM of 12 May 2016 as an Independent Director
& Young (now EY), Paris, after having served as Auditor/ and is Chairman of the Remuneration Committee and a
Senior, Manager and Senior Manager for the firm starting in member of the Corporate Governance and Nomination
1990. During her time at EY, she gained extensive experience Committee as well as of the recently installed ESG & Climate
Committee. Grace Reksten Skaugen is a Trustee Advisory
council member of The International Institute of Strategic
Studies in London. In 2009, she founded Infovidi Board
Services Ltd, an independent consulting company. From
2002 till 2015 she was a member of the Board of Directors
of Statoil ASA. She is presently a Board member of Investor
AB and Lundin Petroleum AB. In 2006 she was one of the
founders of the Norwegian Institute of Directors, of which
she continues to be a member of the Board. From 1994 till
2002 she was a Director in Corporate Finance in SEB Enskilda
Securities in Oslo. She has previously worked in the fields of
venture capital and shipping in Oslo and London and carried
out research in microelectronics at Columbia University in
New York. She has a doctorate in Laser Physics from Imperial
College of Science and Technology, University of London. In
1993 she obtained an MBA from the BI Norwegian School of
Management.
Tanker and Terminal Operators (SIGGTO) from 2013 to 2016 Sales, Management Director North-Sea/Europe Region, and
and was Chair of GIIGNL’s Commercial Study Group from Business Development Manager Asia. Mr Trowell began his
2010 to 2015. She completed her PhD in Rock Physics from professional career in 1995 as a petroleum engineer with
University College London & University of Tokyo and has a Royal Dutch Shell before joining Schlumberger.
BSc in Geology from Imperial College, University of London.
Mr Trowell has been a member of several industry advisory
Carl Trowell - Independent Director boards. He is on the advisory board of EVPE Private Equity
Carl Trowell serves on the Board of Directors since his since 2007, and in 2016 he became a Non-Executive Board
appointment at the AGM of May 2019, and is Chairman of Member of Ophir Energy plc.
the Corporate Governance and Nomination Committee
and a member of the Remuneration Committee. Since Mr Trowell has a PhD in Earth Sciences from the University
2014, Carl Trowell was Chief Executive Officer of Ensco of Cambridge, a Master of Business Administration from
plc, a listed London-based offshore drilling company. He The Open University, UK, and a Bachelor of Science degree in
is also a member of its Board of Directors and has taken Geology from Imperial College London.
up the position of Executive Chairman in April 2019 upon
the closing of the merger with Rowan PLC (which became Composition
Valaris PLC). In his roles, he has substantial experience with The Supervisory Board currently consists of six members.
strategic reorganizations and mergers and acquisitions. All six members are non-executive Directors of which five
Prior to joining Ensco, Carl was President of oilfield services are Independent Directors under the Belgian Corporate
company Schlumberger Ltd’s Integrated Project Management Governance rules as well as under Rule 10A-3 promulgated
(IPM) and Schlumberger Production Management (SPM) under the U.S. Securities Exchange Act of 1934 and under
businesses. He was promoted to this role after serving the rules of the NYSE. The articles of association provide
as President of Schlumberger Western GECO, the seismic that the members of the Supervisory Board can be appointed
division of Schlumberger, where he managed 6,500 for a period not exceeding four years per mandate. The
employees with operations in 55 countries. Prior to this role, Supervisory Board members are eligible for re-election. The
he held a variety of international management positions within articles of association of the Company do not provide an age
Schlumberger in the fields of marketing, sales and business limit for the members of the Supervisory Board.
development, including Global VP Strategic Marketing &
Working procedures
During 2019, before implementation of the CCA, the Board
Type of Meetings
Name of Directors was the ultimate decision-making body of the
mandate attended
Company, with the exception of the matters reserved to the
Chairman - Shareholders’ Meeting as provided by law or the articles
Carl Steen Independent 10 out of 10 of association. In addition to the statutory powers, the
Director responsibilities of the Board of Directors were further defined in
Article III.1 of the Corporate Governance Charter. All decisions
Paddy Rodgers1 Director - CEO 4 out of 4
of the Board were taken in accordance with Article 22 of the
articles of association which inter alia stated that the Chairman
Daniel R.
Director 1 out of 4 had a casting vote in case of deadlock. During 2019 that had
Bradshaw2
not been necessary and since 20 February 2020 the articles of
Anne-Hélène Independent association no longer provide for such casting vote. Besides
10 out of 10 the formal meetings, the Board members of Euronav are in
Monsellato Director
contact with each other very regularly, including by conference
Ludovic Saverys Director 10 out of 10 call, or via e-mail. As it is often difficult to formally meet in case
an urgent decision is required, the written decision-making
process was used eighteen times in 2019. On 20 February
Grace Reksten Independent
10 out of 10 2020 the extraordinary shareholders meeting implemented the
Skaugen Director
CCA and adopted new articles of association including a two-
Independent tier governance model. The powers of the Supervisory Board
Steven Smith³ 10 out of 10
Director are those outlined in article 7:109 of the CCA. A copy of the
new articles of association can be consulted at https://www.
Independent
Anita Odedra4 5 out of 5 euronav.com/investors/corporate-governance/articles-of-
Director
association/.
Independent
Carl Trowell5 5 out of 5 Activity report 2019
Director
In 2019 Euronav’s Board of Directors deliberated on:
1
Mr Paddy Rodgers resigned from the Board of Directors with effect
IMO 2020 and related matters (such as scrubber policy and
immediately after the Annual General Shareholders’ Meeting of 9 May 2019.
2
Mr Dan Bradshaw’s mandate as a member of the Board of Directors expired compliant fuel procurement strategy);
immediately after the Annual General Shareholders’ Meeting of 9 May 2019.
Risk management;
³ Mr Steven Smith resigned from the Board of Directors with effect immediately
after the Board of Directors of 6 December 2019.
HR processes (including CEO, CFO and CPO search);
4
Ms Anita Odedra was appointed Independent Director at the AGM of 9 May
Hedging policy;
2019.
5
Mr Carl Trowell was appointed Independent Director at the AGM of 9 May
ESG related matters and set up of ESG & Climate Committee;
2019.
Health, Safety, Quality and Environment (HSQE);
Composition
In accordance with Article 526bis §2 of the former Belgian
Company Code and provision 5.2./4 of Appendix C to the
former Belgian Corporate Governance Code, the Audit and Risk
Committee is exclusively composed of non-executive Directors
and a majority of the Committee’s members are Independent
Directors. The Audit and Risk Committee of Euronav counts
three members, which are all Independent Directors.
Anne-Hélène Monsellato1
2022 X
(Chair)
1
Mr Carl Steen ceased to be a member of the Remuneration Committee as
of 21 June 2019.
Mr Steven Smith ceased to be a member of the Remuneration Committee
2
as of 21 June 2019.
Mr Trowell was appointed Independent Director at the AGM of 9 May 2019
3
Type of Meetings
Name
mandate attended
Independent
Anne-Hélène Monsellato2 2 out of 2
Director
Independent
Steven Smith3 2 out of 2
Director
Independent
Grace Reksten Skaugen 4 out of 4
Director
Independent
Carl Steen4 2 out of 2 into account members’ expertise given other Committee
Director
memberships.
1
Mr Bradshaw ceased to be a member of the Board of Directors and a
member of the Corporate Governance and Nomination Committee after the As of 31 December 2019, the ESG & Climate Committee was
AGM of 9 May 2019. composed as follows:
2
Mrs Monsellato ceased to be a member of the Corporate Governance and
Nomination Committee as of 21 June 2019.
3
Mr Smith joined the Corporate Governance and Nomination Committee
as Chairman as of 21 June 2019. Following Mr Smith’s resignation of the End term of Independent
Board of Directors and the Committees effective as of 6 December 2019, Name
office Director
Mr Trowell was appointed as Chairman of the Corporate Governance and
Nomination Committee as of 12 December 2019.
4
Mr Steen joined the Corporate Governance and Nomination Committee as a
member as of 21 June 2019. Ludovic Saverys 2021
Composition
As of 31 December 2019, the ESG & Climate Committee of During the meeting the Committee discussed its Terms of
Euronav counts 5 members, one Independent Director, one Reference, took stock of the Company's current approach and
Director and three members of the Executive Committee. engagement on ESG and Climate matters, and determined the
The composition of the Committee is determined taking key action items for 2020.
head. The execution of this performance review process is For their mandate within the Remuneration Committee and
ensured by the Management Board. the Corporate Governance and Nomination Committee, the
members received an annual remuneration of EUR 5,000
The General Shareholders’ Meeting decides upon the and the Chairman received a remuneration of EUR 7,500.
remuneration level for the members of the Supervisory Each member of any of the Committees, including the
Board, as suggested by the Supervisory Board pursuant to Chairman, received an additional attendance fee of EUR
proposals formulated by the Remuneration Committee. The 5,000 per Committee attended with a maximum of EUR
policy of remuneration for members of the Management 20,000 per year.
Board is set by the Supervisory Board on the basis of
recommendations by the Remuneration Committee using At present non-executive Directors do not receive
suitable industry benchmarks. performance related remuneration, such as bonuses or
remuneration related shares or share options, nor fringe
The Remuneration Committee meets at least four times a benefits or pension plan benefits. As such, Euronav ensures
year and has the following main responsibilities which are the objectivity of non-executive Directors and encourages
further outlined in its terms of reference: the active participation of all Directors for both the meetings
of the Board of Directors and the Committee meetings.
t o make recommendations to the Supervisory Board relating
to the remuneration policy and the individual remuneration No loans or advances were granted to any Director.
of the members of the Supervisory Board, its Committees
and the Management Board; The remuneration in 2019 of the members of the Board of
to make recommendations to the Supervisory Board with Directors is reflected in the table below:
respect to policies and principles for performance reviews
of the members of the Management Board and oversee
evaluations of the members of the Management Board; In euro:
to discuss objectives for the members of the Management
Board which subsequently serve as benchmarks for the Audit
Attendance
evaluation of their performance; Name Fixed fee and Risk
fee Board
to review annually the remuneration of the members of the Committee
Management Board and, on a non-individual basis, of the
group of employees; Carl Steen 160,000.00 40,000.00 20,000.00
to prepare the remuneration report for presentation to the
Annual Shareholders’ Meeting.
Paddy Rodgers — — —
4.2 REMUNERATION POLICY FOR MEMBERS OF THE
BOARD OF DIRECTORS/SUPERVISORY BOARD
The remuneration of the members of the Board of Directors
since 20 February 2020 (known as the Supervisory Board) is Daniel Bradshaw 5,000.00 10,000.00 5,000.00
determined on the basis of four regular meetings of the full
Board per year. Directors receive an attendance fee for each
Board meeting or Committee meeting attended. The actual Anne-Hélène
60,000.00 40,000.00 40,000.00
amount of the remuneration is approved by the AGM. Monsellato
As per decision of the AGM held on 9 May 2019 , the gross fixed
Ludovic Saverys 60,000.00 40,000.00 0.00
annual remuneration remains at EUR 60,000 for the members
of the Board of Directors and at EUR 160,000 for the Chairman.
The meeting further resolved that each director, including the Grace Reksten
Chairman, shall receive an attendance fee of EUR 10,000 for 60,000.00 40,000.00 —
Skaugen
each board meeting attended. The aggregate annual amount
of the attendance fee shall however not exceed EUR 40,000.
The gross fixed annual remuneration for 2019 of Mr Daniel R. Steven Smith 60,000.00 40,000.00 20,000
Bradshaw was set at EUR 20,000. It was also decided to grant
him an attendance fee of EUR 10,000 for each board meeting
attended.
Anita Odedra 45,000.00 30,000.00 10,000.00
For their mandate within the Audit and Risk Committee, the
members received an annual remuneration of EUR 20,000
and the Chairman received a remuneration of EUR 40,000. Carl Trowell 45,000.00 30,000.00 —
Each member of the Audit and Risk Committee, including the
Chairman, received an additional attendance fee of EUR 5,000 per
TOTAL 495,000.00 270,000.00 95,000.00
Committee attended with a maximum of EUR 20,000 per year.
— — — — — —
10,000.00 — — — — 95,000.00
4.3 REMUNERATION POLICY FOR THE EXECUTIVE The Company has no other rights or remedies than the ones
COMMITTEE/THE MANAGEMENT BOARD AND THE provided for by civil law and company law to claim back the
EMPLOYEES variable remuneration in case it is attributed on the basis of
Euronav’s remuneration packages intend to be fair and incorrect financial statements.
appropriate to attract, retain and motivate the employees
as well as the management and to be reasonable in view Remuneration (fixed and variable)
of the Company economics and the relevant practices of Annual Base Salary (fixed)
comparable peer companies. The fixed part of the remuneration package is referred to as
the Annual Base Salary (ABS). The size of the ABS is reviewed
The Executive Committee (after implementation of the in accordance with a range of industry benchmarks. After
CCA, known as the Management Board) and employee reference to the detailed benchmark data, the ABS awarded
compensation packages are composed of a fixed and a is then based on the experience of the postholders, required
variable element. The fixed and variable remuneration are competencies and responsibilities of the position.
determined according to suitable industry benchmarks for
specific positions, company performance and individual Bonus plan for the Executive Committee (variable)
employees’ abilities and achievements of specific objectives. The remuneration structure includes an Executive Bonus which
considers the following elements: Company performance
The Remuneration Committee decides annually on the (40%), meeting budget targets (30%), improvements in HSQE
remuneration of the members of the Executive Committee. factors performance (15%), and individual achievement of
Variable remuneration is determined on the basis of financial objectives (15%). There is a gateway to the plan of no major
performance, achievement of budget, HSQE factors and environmental issue during the course of the bonus year.
individual KPI’s. Payment is recommended by the Remuneration Committee
In EUR: Fixed remuneration Variable remuneration Pension and benefits Other components
*S
ince 9 May 2019
No loans or advances were granted to the CEO. in mutual understanding, without any wrongful conduct or
fault on the side of Mr Rodgers). Moreover, the proposed
On January 31, 2019, the Board of Directors and the CEO, Mr amounts to be paid under the Settlement Agreement do not
Paddy Rodgers, agreed in mutual understanding, to terminate exceed the limitations imposed by the Belgian Companies
the employment agreement of Mr Rodgers under the following Code. The financial consequences for the Company
conditions: are limited to the severance payment and remuneration
payable by the Company under the Settlement Agreement.
the payment of a severance payment to the CEO of EUR Such remuneration was justified by the Remuneration
4,000,000 (the ‘Severance Payment’); Committee, independently of Mr Rodgers. In reference to
In order to facilitate the transition period until a new CEO the exceptional service delivered by Mr Rodgers for over 20
for the Company is found, Mr Rodgers’ employment years to the Company, 19 of which as its CEO, in relation
agreement will continue until 31 December 2019, subject to the Settlement Agreement, and taking into account the
to certain amendments; continuing obligations of Mr Rodgers under his employment
the irrevocable waiver by Mr Rodgers of any and all of its agreement until 31 December 2019, the Board decided that
rights under the LTIPs and TBIP, save the one of 2015. the proposed Severance Payment under the Settlement
Agreement and remuneration for the services to be provided
The applicable conditions of the Settlement Agreement under the employment agreement is common for this type
were negotiated on an arm’s length basis (taking into of agreements and that the conditions are at arm’s length.
account that the CEO mandate of Mr Rodgers is terminated
In EUR: Fixed remuneration Variable remuneration Pension and benefits Other components
*A
s of 9 May, 4 members due to dual function CFO/CEO
4.5 LONG TERM INCENTIVE PLANS OUTSTANDING The phantom stock units will mature one-third each year on
the second, third and fourth anniversary of the award. All
LTIP 2015 of the beneficiaries have accepted the phantom stock units
On 20 February 2015 within the framework of a management granted to them. The number of phantom stocks granted was
incentive plan, the Board of Directors granted 65,433 Restricted calculated on the basis of a share price of EUR 10.6134 which
Stock Units (RSUs) and 236,590 stock options. On 20 February equals the weighted average of the share price of the three
2020 the situation is as follows: days following the announcement of the preliminary full year
results of 2015.
Stock
LTIP 2015 Options Vested Exercised
LTIP 2017
Granted
Within the framework of a Phantom Stock Plan, 66,449
Former CEO 80,518 80,518 — phantom stock units were granted to the Executive Committee
and the Investor Relations Manager on 9 February 2017. On 20
Former CFO 58,716 58,716 — February 2020 the situation is as follows:
General Counsel 27,360 9,120 The vesting is subject for 75% to a relative TSR (Total
Shareholder Return) compared to a peer group over a three year
Investor Relations Manager 6,319 2,106 period. Each yearly measurement to be worth 1/3rd of 75% of
the award.
The phantom stock units will mature one-third each year on the
second, third and fourth anniversary of the award. All of the The vesting is subject for 25% to an absolute TSR of the
beneficiaries have accepted the phantom stock units granted to Company’s Shares measured each year for 1/3 of 25% of the
them. The number of phantom stocks granted was calculated award.
on the basis of a share price of EUR 7.2368 which equals the
weighted average of the share price of the three days following The RSUs vested will be finally acquired by the beneficiary as of
the announcement of the preliminary full year results of 2017. the third anniversary.
4.6 REMUNERATION OF THE AUDITOR KPMG going vessels, including bunker supply and management
BEDRIJFSREVISOREN-RÉVISEURS D’ENTREPRISES of crew, the conversion of vessels, the operation of its
(KPMG) FSO activities, the integration of acquired activities, the
adequate protection of critical data and infrastructure from
Permanent representative: Patricia Leleu unauthorized use or theft, including cyber-criminality and
the effective management of its international operations;
For 2019, the worldwide audit and other fees in respect of
regulations: if the Company fails to comply with laws
services provided by the statutory auditor KPMG can be regulations or other requirements or is involved in legal
summarized as follows: proceedings in this regard, its operations and revenues may
be adversely affected;
In USD 2019 2018
financing: the Company is subject to operational and
financial restrictions in debt agreements; refinancing of
Audit services for the annual loans may not always be possible;
925,274 909,897
financial statements
geopolitical: terrorist attacks, piracy, civil disturbances and
regional conflicts in any particular country.
Audit related services 39,742 409,360
The risk register identifies an individual risk owner for each risk.
Tax services 728 6,180
Risk owners review and certify their risks on a quarterly basis.
Other non-audit services 20,151 10,076 The results of this quarterly certification are being reported to
the Audit and Risk Committee by the Chief Risk Officer who is
TOTAL 985,895 1,335,513 responsible for the effective operation of the risk management
framework.
The limits prescribed by Article 133 of the Belgian Company Euronav also has developed a ‘Health, Safety, Quality and
Code were observed. Environmental (HSQE) Management System’ which integrates
HSQE management into a system that fully complies with
the ISM Code for the ‘Safe Operation of Ships and Pollution
5. INTERNAL CONTROL AND RISK MANAGEMENT Prevention’.
SYSTEMS
Internal control can be defined as a system developed To support the financial reporting, Euronav has a system of
and implemented by management and which contributes internal control over financial reporting including policies
to managing the activities of the Company, its efficient and procedures to accurately reflect the transactions and
functioning and the efficient use of its resources, all in function dispositions of assets of the Company, in order to provide
of the objectives, the size and the complexity of its activities. reasonable assurance that transactions are recorded in
accordance with generally accepted accounting principles
Risk management can be defined as a structured, consistent and that provides reasonable assurance to timely detect
and continuous proces aimed at identifying, assessing, unauthorized acquisition or use or disposition of Company’s
deciding on responses to and reporting on the opportunities assets. Compliance is monitored by means of annual
and threats that may affect the achievement of the Company's assessments performed by the internal audit function and
objectives. their outcome is reported to the corporate finance function,
which presents a consolidated report to the Audit and Risk
A Risk Management Charter has been created and approved Committee. More details on the exact role and responsibilities
by the Supervisory Board in furtherance of the Company's of the Audit and Risk Committee in relation to the internal
commitment to building a strong risk management culture. control and risk management systems can be found in the
Clear roles and responsibilities have been drafted as well as section on its powers, described above.
risk management procedures.
Euronav has established an internal audit function for the
Risks (as described in more detail in the ‘Risk Factors’ section purpose of reviewing and analysing strategic, operational,
in this annual report) are all compiled in the risk register and financial and IT risks, to conduct specific assignment in
mainly relate to the following aspects: accordance with the annual internal audit plan and to report
and discuss the findings with the Audit and Risk Committee.
trategic: capital allocation, strategic partnerships, risks
s The scope of internal audit is both on operations and on
relating to the TI Pool and VLCC Chartering, the joint internal control over financial reporting. The Internal Audit
ventures and associates, risks related to communication to Department is staffed with designated resources, resources
stakeholders; from other departments and external service providers for
economic (including slowing economic growth, freight rate competencies that are not available within the Company. Part
volatility, oil supply and demand, inflation or fluctuations of the internal audit work on internal control over financial
in interest and foreign currency exchange rates) and reporting is outsourced to a qualified service provider (EY).
competitive risks (such as greater price competition); The Internal Audit Manager reports both to the CEO and to the
operational: risks inherent in the operation of ocean-
Audit and Risk Committee.
the Indian Ocean, the Gulf of Aden off the coast of Somalia Climate change and greenhouse gas restrictions may
and in particular the Gulf of Guinea region off Nigeria, which adversely impact our operations and markets.
experienced increased incidents of piracy in 2019. Over the Due to concern over the risk of climate change, a number of
past few years, the frequency of piracy incidents in the Gulf countries and the IMO have adopted, or are considering the
of Aden and in the Indian Ocean has decreased significantly, adoption of, regulatory frameworks to reduce greenhouse gas
whereas there has been an increase in the Southeast Asia as emissions. These regulatory measures may include, among
well as in the Gulf of Guinea where the various active pirate others, adoption of cap and trade regimes, carbon taxes,
groups have turned from mainly cargo theft to kidnapping increased efficiency standards and incentives or mandates
of crew. If these piracy attacks occur in regions in which for renewable energy. More specifically, on 27 October 2016,
the Company’s vessels are deployed being characterized the International Maritime Organization’s Marine Environment
by insurers as ‘high risk’ areas, premiums payable for Protection Committee announced its decision concerning
such coverage could increase significantly and in extreme the implementation of regulations mandating a reduction
circumstances, such insurance coverage may be more difficult in sulphur emissions from 3.5% currently to 0.5% as of the
to obtain. In addition, crew costs, as well as costs which may beginning of 1 January 2020. Since 1 January 2020, ships
be incurred to the extent the Company employs on board have to either remove sulphur from emissions or buy fuel with
security guards or hires in military patrol boats to escort the low sulphur content, which may lead to increased costs and
vessel, could increase in such circumstances. Detention as a supplementary investments for ship owners. The interpretation
result of an act of piracy against the Company’s vessels, or an of ‘fuel oil used on board’ includes use in main engine, auxiliary
increase in cost, or unavailability of insurance for the vessels, engines and boilers. Shipowners may comply with this
could have a material adverse impact on the Company’s regulation by (i) using 0.5% sulphur fuels on board, which are
business, results of operations, cash flows, financial condition available around the world but at a higher cost; (ii) installing
and ability to pay dividends. In response to piracy incidents, scrubbers for cleaning of the exhaust gas; or (iii) by retrofitting
particularly in the Gulf of Aden off the coast of Somalia vessels to be powered by liquefied natural gas, which may
and the wider Western Indian Ocean area and following not be a viable option due to the lack of supply network and
consultation with regulatory authorities, Euronav follows the high costs involved in this process. Costs of compliance with
latest version of BMP5 (Best Management Practices) which is these regulatory changes may be significant and may have a
a guide that has been produced and updated regularly jointly material adverse effect on our future performance, results of
by EUNAVFOR, the NATO Shipping Centre and UKMTO (UK operations, cash flows and financial position.
Maritime Trade Operations) in addition to several maritime
industry organizations or the Company may even consider In addition, although the emissions of greenhouse gases
to station armed guards on some of its vessels. Whilst use from international shipping currently are not subject to the
of armed guards has been proven to deter and prevent the Kyoto Protocol to the United Nations Framework Convention
hijacking of the Company’s vessels, it may also increase on Climate Change, which required adopting countries to
the risk of liability for death or injury to persons or damage implement national programs to reduce emissions of certain
to personal effects and third party property, which could gases, or the Paris Agreement, a new treaty may be adopted
adversely impact its business, results of operations, cash in the future that includes restrictions on shipping emissions.
flows, financial condition and ability to pay dividends. Compliance with changes in laws, regulations and obligations
relating to climate change could increase our costs related to
Euronav is subject to risks related to the adequate protection operating and maintaining our vessels and require us to install
of critical data and infrastructure from unauthorized use or new emission controls, acquire allowances or pay taxes related
any other form of cyber-criminality to our greenhouse gas emissions or administer and manage a
Euronav’s activities are subject to risk of discontinuity greenhouse gas emissions program. Revenue generation and
due to unauthorized use, theft, sabotage, viruses or any strategic growth opportunities may also be adversely affected.
other disruptive activity (such as phishing and hacking)
on the Company’s IT infrastructure, which could impact Adverse effects upon the oil and gas industry relating to
the confidentiality, integrity and availability of data and/or climate change, including growing public concern about the
IT systems, as well as impact on the financial result of the environmental impact of climate change, may also adversely
Company. Euronav has implemented, amongst other things, affect demand for our services. For example, increased
business continuity plans, a regularly tested IT controls regulation of greenhouse gases or other concerns relating to
framework, continuous access monitoring and independent climate change may reduce the demand for oil and gas in the
penetration testing in our offices and on board of our future or create greater incentives for use of alternative energy
vessels. The Company’s controls also include compliance sources. In addition, the physical effects of climate change,
to existing related rules & legislation and implement full including changes in weather patterns, extreme weather events,
adherence to the EU General Data Protection Regulation, as rising sea levels, scarcity of water resources, may negatively
approved on 14 April 2016. impact our operations or operations of service providers upon
whom we depend, such as ports infrastructures. Any long-term
material adverse effect on the oil and gas industry could have
a significant financial and operational adverse impact on our
business that we cannot predict with certainty at this time.
Rising fuel prices may adversely affect our profits. important factor in negotiating charter rates. Our operations and
While we do not directly bear the cost of fuel or bunkers under the performance of our vessels, and as a result our results of
our time charters, fuel is a significant factor in negotiating charter operations, cash flows and financial position, may be negatively
rates. Fuel is also a significant, if not the largest, expense in our affected to the extent that compliant sulphur fuel oils are
shipping operations when vessels are operated on the spot market unavailable, of low or inconsistent quality, if de-bunkering facilities
under voyage charter. As a result, an increase in the price of fuel are unavailable to permit our vessels to accept compliant fuels
beyond our expectations may adversely affect our profitability when required, or upon occurrence of any of the other foregoing
at the time of charter negotiation. The price and supply of fuel is events. Costs of compliance with these and other related
unpredictable and fluctuates based on events outside our control, regulatory changes may be significant and may have a material
including geopolitical developments, supply and demand for oil adverse effect on our future performance, results of operations,
and gas, actions by the Organization of Petroleum Exporting cash flows and financial position. As a result, an increase in the
Countries, or OPEC, and other oil and gas producers, war and price of fuel beyond our expectations may adversely affect our
unrest in oil producing countries and regions, regional production profitability at the time of charter negotiation. Further, fuel may
patterns and environmental concerns. Further, fuel has become become much more expensive in the future, which may reduce
much more expensive as a result of new regulations mandating a the profitability and competitiveness of our business versus other
reduction in sulphur emissions to 0.5% as of January 2020, which forms of transportation, such as truck or rail.
may reduce the profitability and competitiveness of our business
versus other forms of transportation, such as truck or rail. Other Developments in safety and environmental requirements
future regulations may have a similar impact. relating to the recycling of vessels may result in escalated
and unexpected costs.
The IMO 2020 regulations may cause us to incur substantial The 2009 Hong Kong International Convention for the Safe
costs and to procure low-sulpher fuel oil directly on the and Environmentally Sound Recycling of Ships, or the Hong
wholesale market for storage at sea and onward consumption Kong Convention, aims to ensure ships, being recycled once
on our vessels. they reach the end of their operational lives, do not pose any
unnecessary risks to the environment, human health and
Effective 1January 2020, the IMO implemented a new regulation safety. The Hong Kong Convention has yet to be ratified by the
for a 0.50% global sulphur cap on emissions from vessels. Under required number of countries to enter into force. Upon the Hong
this new global cap, vessels must use marine fuels with a sulphur Kong Convention’s entry into force, each ship sent for recycling
content of no more than 0.50% against the former regulations will have to carry an inventory of its hazardous materials. The
specifying a maximum of 3.50% sulphur in an effort to reduce the hazardous materials, whose use or installation are prohibited
emission of sulphur oxide into the atmosphere. in certain circumstances, are listed in an appendix to the Hong
Kong Convention. Ships will be required to have surveys to
We may incur costs to comply with these revised standards. verify their inventory of hazardous materials initially, throughout
Additional or new conventions, laws and regulations may be their lives and prior to the ship being recycled.
adopted that could require, among others, the installation of The Hong Kong Convention, which is currently open for
expensive emission control systems and could adversely affect accession by IMO Member States, will enter into force 24
our business, results of operations, cash flows and financial months after the date on which 15 IMO Member States,
condition. representing at least 40% of world merchant shipping by gross
tonnage, have ratified or approve accession. As of the date of
With the exception of the 4 VLCC vessels under construction at this annual report, fifteen countries representing just over 30%
DSME shipyard, none of our vessels are equipped with scrubbers of world merchant shipping tonnage have ratified or approved
and as of 1 January 2020 we have transitioned to burning IMO accession of the Hong Kong Convention.
compliant fuels. We continue to evaluate different options in On 20 November 2013, the European Parliament and the Council
complying with IMO and other rules and regulations. We expect of the EU adopted the Ship Recycling Regulation, which retains
that our fuel costs and fuel inventories will increase in 2020 as the requirements of the Hong Kong Convention and requires
a result of these sulphur emission regulations. Low sulphur fuel that certain commercial seagoing vessels flying the flag of an
is more expensive than standard marine fuel containing 3.5% EU Member State may be recycled only in facilities included on
sulphur content and may become more expensive or difficult to the European list of permitted ship recycling facilities. We are
obtain as a result of increased demand. If the cost differential required to comply with EU Ship Recycling Regulation by 31
between low sulphur fuel and high sulphurfuel is significantly December 2020, since our ships trade in EU region.
higher than anticipated, or if low sulphur fuel is not available These regulatory developments, when implemented, may lead
at ports on certain trading routes, it may not be feasible or to cost escalation by shipyards, repair yards and recycling
competitive to operate our vessels on certain trading routes yards. This may then result in a decrease in the residual scrap
without installing scrubbers or without incurring deviation time value of a vessel, and a vessel could potentially not cover the
to obtain compliant fuel. Scrubbers may not be available to be cost to comply with latest requirements, which may have an
installed on such vessels at a favorable cost or at all if we seek adverse effect on our future performance, results of operations,
them at a later date. cash flows and financial position.
The current dividend payment policy as adopted by the Board 8. Code of Conduct
is the following: the Company intends to pay a minimum Euronav has adopted and applies a Code of Business Conduct
fixed dividend of at least USD 0.12 in total per share per and Ethics. The purpose of the Code of Business Conduct and
year provided (a) the Company has in the view of the board, Ethics is to assist all the Euronav employees to enhance and
sufficient balance sheet strength and liquidity, combined (b) protect the good reputation of Euronav. The Code of Business
with sufficient earnings visibility from fixed income contracts. Conduct and Ethics articulates the policies and guidelines
In addition, if the results per share are positive and exceed that highlight the values of Euronav, more particularly in its
the amount of the fixed dividend, that excess income* will be relationship with customers, suppliers, shareholders and other
allocated to either: additional cash dividends, share buy-back, stakeholders as well as society in general. The full text of the
accelerated amortization of debt or the acquisition of vessels Code of Business Conduct and Ethics can be found on the
which the Board considers at that time to be accretive to Company’s website www.euronav.com.
shareholders’ value.
9. Measures regarding insider dealing and market Mother Media, National Women’s Law Center and National
manipulation Partnership for Women & Families. Those included on this
In view of Regulation (EU) No 596/2014 of the European year’s index scored at or above a global threshold established
Parliament and of the Council of 16 April 2014 on market by Bloomberg to reflect disclosure and the achievement or
abuse (market abuse regulation) and repealing Directive adoption of best-in-class statistics and policies.
2003/6/EC of the European Parliament and of the Council
and Commission Directives 2003/124/EC, 2003/125/EC As of 24 March 2020, the Management Board consist of one
and 2004/72/EC (the ‘Market Abuse Regulation’ or ‘MAR’), woman and five men, three of whom are based in Belgium, one
the Board of Directors approved the current version of in Greece and one in the U.K. They all hold academic degrees in
the Company’s Dealing Code. The Dealing Code includes various disciplines such as Law, Finance, Shipping, and Science.
restrictions on trading in Euronav shares during so called Before they started working with Euronav, they were employed in
‘closed periods’, which have been in application for the first the financial, legal and shipping sector. Their ages vary between
time in 2006, as well as other procedures and safeguards 45 and 62 years old and include their average experience of 7
the Company has implemented in compliance with the years in their current executive position.
Market Abuse Regulation.
The Senior Management (Chief People Officer, Secretary
The Officers, members of the Supervisory and Management General, General Manager Nantes office, HSQE Manager)
Boards, Managers and employees of the Euronav Group who consists of three men and one woman (two in Belgium, one in
intend to deal in Euronav shares must first request clearance France and one in Greece). They all have an academic degree
from the Compliance Officer. Transactions that are to be in various disciplines (Economics, Law, History, and Shipping).
disclosed in accordance with the Market Abuse Regulation are They started their careers in the financial, legal and shipping
being disclosed at the appropriate time. sector and have been working in their current Euronav role for
an average of three years. Their ages vary between 38 and 51
10. GUBERNA years old.
As Euronav strongly believes in the merits of corporate
governance principles and is keen on further developing its 12. Appropriation accounts
corporate governance structure, Euronav joined Guberna The result to be allocated for the financial year amounts to USD
as institutional member at the end of 2006. Guberna 226,113,646. Together with the transfer of USD 56,649,927
(www.guberna.be) is a knowledge center promoting from the previous financial year, this gives a profit balance to
corporate governance in all its forms and offers a platform for be appropriated of: USD 282,763,573.
the exchange of experiences, knowledge and best practices.
The Supervisory Board will propose to the Annual Shareholders’
11. Gender diversity Meeting of 20 May 2020 to distribute a full year gross dividend
In accordance with the Corporate Governance Code, the in the amount of USD 0.35 per share to all shareholders. Taking
Supervisory Board must be composed in a manner compliant into account the interim dividend of USD 0.06 per share paid as
with the principles of gender diversity as well as of diversity of October 2019, and subject to shareholders’ approval, a final
in general. The Supervisory Board of Euronav currently dividend of USD 0.29 per share will be paid after the Annual
consists of three men and three women with varying yet General Meeting of Shareholders.
complementary expertise. The Supervisory Board has been The dividend will be payable as from 9 June 2020. The share
made aware of the law of 28 July 2011 on gender diversity and will trade ex-dividend as from 28 May 2020 (record date 29
the recommendations issued by the Corporate Governance May 2020). The dividend to holders of Euronav shares listed
and Nomination Committee following the enacting of the and tradable on Euronext Brussels will be paid in EUR at the
law with regard to the representation of women on Boards of USD/EUR exchange rate of the record date.
Directors of listed companies.
If this proposal is agreed upon, the allocation of profits will be
In January 2020 Euronav was selected for the third as follows:
consecutive time as one of over 300 companies from ten
sectors to join the Bloomberg Gender-Equality Index (GEI).
capital and reserves USD 39,604,399
This comprehensive index measures gender equality across
internal company statistics, employee policies, external
community support and engagement, and gender-conscious dividends USD 77,008,650
product offerings. This Bloomberg GI continues to gain
important traction resulting in 325 companies included in this carried forward USD 166,150,524
year’s index (last year up to 230 companies).Inclusion in this
index recognises efforts made by Euronav to create a work
environment that supports gender equality and the growing 24 March 2020
demand for diverse and inclusive workplaces. Supervisory Board
In order to become a participant in this Index, Euronav
submitted a survey created by Bloomberg in partnership with
third-party experts Catalyst, Women’s World Banking, Working
Euronav MI II Inc. of Tankers UK Agencies Ltd. (‘TUKA’), fully held at the time by
Tankers International LLC (‘TI LLC’), an entity incorporated
In the fourth quarter of 2017, Euronav NV incorporated a under the laws of the Marshall Islands, have been distributed to
new wholly-owned subsidiary, Euronav MI Inc., a company the two remaining founding members of the TI Pool, (namely
incorporated and existing under the laws of the Republic of Euronav NV and International Seaways INC), to form a 50-50
the Marshall Islands, for the purposes of the upcoming merger joint venture.
(the ‘Merger’) with Gener8 Maritime Inc. (‘Gener8’). Pursuant
to the merger agreement entered into between Euronav and Additionally, a new company, Tankers International Ltd. (‘TIL’),
Gener8 on 20 December 2017, Euronav MI Inc. merged with was incorporated under the laws of the United Kingdom, and is
and into Gener8 upon closing of the Merger on 12 June 2018, now fully owned by TUKA. TIL became the disponent owner of
with Gener8 being the surviving corporation wholly owned all of the vessels in the TI Pool as all the vessels are now time
by Euronav NV. At the same time, the name of the surviving chartered to TIL at a floating rate equivalent to the average
corporation was changed into Euronav MI II Inc. spot rate achieved by the pool times the pool point assigned
to each vessel.
As the ultimate parent company of the Gener8 group prior to
closing of the Merger, Euronav MI II Inc. still owns certain direct This new structure allowed the TI Pool to arrange for a credit
and indirect subsidiaries most of which served as special line financing in order to lower the working capital requirement
purpose shipowning companies within the Gener8 group. for the Pool participants which potentially can attract additional
Following the sale of the assets held by them (to Euronav NV pool participants.
or, in case of non-core assets, to third party buyers) Euronav is
in the process of simplifying the group’s corporate structure by Euronav NV, Antwerp, Geneva Branch
liquidating the said subsidiaries.
In April 2019 Euronav NV established a 100% owned branch
Tankers UK Agencies Ltd. (TI Pool) office in Geneva (Switzerland), Euronav NV, Antwerp, Geneva
Branch. This new branch office was set up in anticipation on the
In 2017, the corporate structure of Tankers International pool coming into force of IMO 2020 and focuses on procurement of
(‘TI Pool’) was rationalized. Under the new structure, the shares compliant fuel and related services.
100% 100%
Euronav Seven
Ship Seas
Management Shipping
(Hellas) Ltd. -
Branch Marshall
Office - Islands
Greece
Euronav fleet
8.6 years
The crude oil seaborne transportation market is cyclical and 25% 6-10 years old
highly volatile requiring flexible and proactive management of
27% 11-15 years old
assets in terms of fleet composition and employment. On 24
March 2020 the Euronav core fleet (owned and operated) has 5% > 15 years old
together, the TI Pool always aims to have a modern high quality 54% 11-15 years old
VLCC available in the right place at the right time.
15% 6-10 years old
Europe
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Both VLCC and Suezmax tam
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An FPSO is a floating production system that receives fluids industry is a highly technical one with many risk factors but
(crude oil, water,…) from a subsea reservoir through risers, with an equally high reward.
which then separates fluids into crude oil, natural gas, water and
impurities within the topsides production facilities onboard. Euronav’s initial exposure to the FSO market was with VLCC
deployments in the Gulf and in West Africa back in 1998.
Crude oil stored in the storage tanks of the F(P)SO is offloaded
onto shuttle tankers to be sold for consumption or for further In May 2017, Euronav’s joint venture with International Seaways
refining onshore. (‘INSW’) signed a five year contract for the FSO Africa and FSO
Asia immediately following the previous service contract which
FSOs are floating storage units for areas where the production was signed with North Oil Company (‘NOC’), the new operator
platform has no storage capabilities (fixed platform, MOPU, of the Al Shaheen oil field, whose shareholders are Qatar
spar, TLP, semi) and no pipeline infrastructure. They are perfect Petroleum Oil & Gas Limited and Total E&P Golfe Limited.
because of their very large storage capacity and ability to
be moored in almost any water depth. Without any process The FSO Africa and FSO Asia floating storage platforms are
topsides (as with FPSOs), they are relatively simple to convert. both high specification and long duration assets. Both units
started service at the Al Shaheen field in 2010 with a potential
FSOs provide field storage (ranging from 60,000 to 3 million service life (without major modifications) to 2042.
barrels) and offloading in a variety of situations. Most of them Offshore units are unique because of their logistical
store oil although there are a few LPG or LNG FSOs. requirements and additional engineering in designing,
transporting, installing and operating facilities in the remote
The cost of a converted FSO ranges from USD 30 million to offshore environment as opposed to onshore production or
USD 200 million, depending on the size, field location, mooring storage plants. Each unit is specifically designed for the field’s
and design life. A newbuild FSO can range from USD 100 environmental and geological characteristics.
million to USD 300 million. Al Shaheen crude oil is stored in the FSO Africa and FSO Asia
and exported from a Single Buoy Mooring (SBM) system which
There is an established market for leasing FSOs, which can can be seen on the picture above.
help commercialize remote or marginal fields. The offshore
In-house Ship
Management
The majority of the fleet is managed by three wholly-owned Euronav manages in-house the vast majority of its fleet of modern
subsidiaries: Euronav Ship Management SAS, Euronav SAS crude oil carriers ranging from Suezmax to Very Large and V-Plus
and Euronav Ship Management (Hellas) Ltd. Euronav has also (also known as Ultra Large Crude Oil Carriers) and FSO (Floating
established an office in Singapore, Euronav Singapore Pte Storage and Offloading). Euronav’s fleet trades worldwide in some
Ltd, to enhance the support of services offered to the vessels of the most difficult weather conditions and sea states, such as
that frequently call Asian ports. Human resources including the North Atlantic and East Canada, and for charterers with the
seagoing officers, crew and shore-based staff, including skilled strictest requirements. The vessels and crews are in constant
and experienced captains and marine engineers, give Euronav a interaction with the shore staff through regular onboard visits,
competitive edge in high quality, maintenance and operation of briefing and debriefing discussions upon signing on and off,
the vessels, as well as project development and execution. sophisticated communication systems and conferences ashore
All services are provided with the ultimate regard for the health,
safety, security, environmental and quality standards applicable
to the maritime transportation industry. Euronav is committed
and aims to safety, environmental protection, security and quality
excellence of the Fleet’s operation. Euronav is devoted to a culture
inancial, information technology, human resources and
F
of teamwork where people work together along defined duties legal services to support the Group’s assets’ values;
and responsibilities for the overall success of the Company, on
Project management for:
Operational management.
2,900
Full range of services
OVER
VLCCs Bareboat
Name Owned Built Dwt Draft Flag Length (m) Shipyard
Nautilus 100% 2006 307,284 22.72 Liberian 321.70 Dalian S.I.
Navarin 100% 2007 307,284 22.72 Liberian 321.70 Dalian S.I.
Neptun 100% 2007 307,284 22.72 Liberian 321.70 Dalian S.I.
Nucleus 100% 2007 307,284 22.72 Liberian 321.60 Dalian S.I.
Nautica 100% 2008 307,284 22.72 Liberian 321.70 Dalian S.I.
Nectar 100% 2008 307,284 22.72 Liberian 321.60 Dalian S.I.
Noble 100% 2008 307,284 22.72 Liberian 321.70 Dalian S.I.
1
In 2019 the Cap Pierre, the Cap Diamant and the Fraternity have been in dry-dock and underwent a special survey (standard procedure for ships
every five years). The Cap Pierre in Shenzen (January), the Cap Diamant in Dubai (May) and the Fraternity in Singapore (November – December).
2
Vessel was sold and delivered to new owners during February 2020.
3
As part of the integration of the former Gener8 fleet to Euronav NV, Gener8 George T. was renamed Sienna on 3 July 2019.
4
As part is the integration of the former Gener8 fleet to Euronav NV, Gener8 Spartiate was renamed Stella on 18 February 2019.
5
Vessel sold on 20 February 2019 and delivered to its new owners in April 2019.
Human
resources
One cornerstone of the Euronav mission is dedicated to our
people: to inspire and enable talented, hard-working people
to achieve their career goals in a healthy, challenging and
rewarding environment. Throughout its shore-based offices
in Antwerp, Athens, London, Nantes, Geneva, Singapore and
Hong Kong, Euronav has approximately 210 employees
(including contractors and temporary assignments). This
geographic span across Europe reflects a deep-rooted
maritime history and culture built up over generations.
Over 2,700 seafarers of many different nationalities work
2,700
OVER
Total 1 Colombia
1 Italy
1 Honduras
32 Russia
34 France
48 Ukraine
691* 3 Georgia
26 Romania
158 Greece
Total 1 Guatemala
Ratings 1 Russia
1 Peru
on board
10 Romania
732* 16 Indonesia
70 Honduras
91 El Salvador
542 Philippines
* Crew on board at
Euronav vessels on
31 December 2019
Euronav is an integrated shipping services provider with high In 2019 the human resources department has invested a great
quality standards and ambitious goals. To empower its people deal of work in the following areas:
to meet these challenges, Euronav’s identity is characterized by:
erformance Appraisal survey conducted for the whole staff
P
Common values with local authority to act; in cooperation with Green-Jacobsen
High involvement and flexibility in which much of the work
Introducing 360 assessment tool for Management team with
is carried out by cross-functional, cross-branch, self-directed workshops and follow up sessions
teams;
Participation in quarterly Greek Shipping HR forums
Clarity in roles, expectations and authorities;
Organized Teambuilding events for Finance and Legal ESMH
Professional growth and development opportunities aligned teams
with business needs;
Participation in Annual HR Shipping Conference in London
Quality and professionalism in matters large and small;
Participation in Annual Maritime HR Conference in London
Communication and a no-blame culture cultivated by
Participation in Seafarers’ Salary Survey Benchmarking by
example. Spinnaker
Participation in Salary Survey & Organizational Design
We encourage social responsibility and have values of fairness Benchmarking by Korn Ferry
and responsibility embedded in our operating ethos. We are
Selection and implementation of new HRIS (SagePeople)
an equal opportunity employer; people are selected, rewarded
Performance Appraisal Survey conducted for the whole staff
and advanced based on performance and merit. We act to fully
Introducing Flexible Income Plan in EURB (going live 01/202)
comply with all applicable laws and regulations in the markets
Establish GDPR HR Privacy Statement, Recruitment Privacy
in which we operate. Euronav strives to be an exemplary Statement
employer among its peers and participates in forums for an
Setting up payroll system/insurances/… for Euronav
open exchange of best practices. Switzerland
Development of the HR team and start of Chief people Officer
in September
ESG at
Community
Customer Impact Labour
Responsibility Standards
it’s in
Governan
Climate Risk
Change Management
the DNA
E n vi
ce
nm
ro
Ecological Tax
Footprint ent Transparency
Resource Anti-
Intro Use Pollution Corruption
This matrix displays an overview of the ESG related topics that Euronav actively practices.
The following pages contain clarifying explanations of some of the subjects.
Whistleblower Policy -
Staff Handbook - -
Charity
Charity Policy - -
Ocean Cleanup - -
Sailor's Society - -
The Care - -
Hatzikyriakio - -
Argo Foundation - -
Environment
Governance
Gender Diversity - -
Compensation Guidelines - -
Euronav has been and will continue to work on addressing the primarily a result of a higher average vessel speed and higher
impact of our operations on the environment. Disclosure is a fleet operating days during 2019. Total emissions have however
key part of this on-going process with Euronav the only quoted decreased by 4.1% when compared to the 2017 baseline and
crude tanker company to have been consistently publishing our first year of reporting such data.
our carbon footprint data since 2017.
Euronav intends to publish emissions targets over the next
Total organizational emissions have been normalized by total 12 months. During 2019 the company established an ESG
freight moved and this increased over 2019 to 3.36 gCO2 e/t. and Climate Change committee to assist in implementing a
km when compared to 3.07 gCO2 e/t.km in 2018. This was comprehensive climate change policy.
The disclosed emissions cover all sources within Euronav’s EEOI gCO2/TNM 4.60 4.96
operational control. As such, all operations that are directly
managed by Euronav are included, as well as third party managed AER gCO2/TNM 2.37 2.36
vessels adhering to our ‘Ship Management Agreements’ and
leased ships. Emissions from lone workers in Doha and Hong OEI gCO2e/T.KM 3.07 3.36
Kong and business travel from Anglo Eastern Ship Management
have been excluded due to a lack of data availability. These EEOI/Energy Efficiency Operational Index: Sea going fleet emissions (gCO2)
per unit of transport work (cargo ton miles)
emissions will be immaterial when compared to emissions from
shipping fuel. AER/Annual Efficiency Ratio: Sea going fleet emissions (gCO2) per ton of
ships deadweight times total miles run in the period
OEI/Organizational Emissions Intensity: All Euronav emissions (scope 1, 2,
3) per unit of transportation work (cargo ton kilometers)
Yard selection in terms of HSQE assessment Approach to armed guards and piracy
Euronav is selecting reputable shipyards for performing the The safety and security of the Euronav sea and shore staff is a
ships’ regular repairs. The selection is based on the shipyard primary concern for the Company and to that end the company
reliability, adherence to health, safety and environmental management team take every necessary precaution to ensure
protection standards and of course their competitiveness. our shore and onboard staff are protected and able to perform
Shipyards are evaluated regularly for being eligible to their duties safely and responsibly. The engagement of armed
potential business. guards is based on specific security risk assessment with very
specific guidelines to protect all human lives whilst acting to
Although our fleet is young, vessel recycling is an important prevent any attacks.
matter on which Euronav is actively working. Euronav fully
supports the principles of the Hong Kong convention (IMO)
as well as the EU regulation on ship recycling.
Air pollution
SOx NOx particulate matter
Greenhouse Gases
Air pollution
SOx NOx particulate matter
Marine invasive Greenhouse Gases
Water Noise pollution
species polution
Marine invasive Water Noise pollution
species polution
Water
SOx NOx CO2 Chemicals & Particulate
waste matter
Using his Sailors’ Society vehicle, the Antwerp Port Chaplain The Ark of the World
also offers seafarers free transport to wherever they need to
go, such as the nearest phone and internet facilities, the shops The Ark of the World is a Charitable nonprofit Organization
or the doctors. This is a crucial service for visiting seafarers, as providing special care and protection to mothers and children.
their time ashore is often limited to just a few hours. The organization operates as an orphanage as well as a day-
care center for low-income families that are in need of a safe
Valero Benefit for Children place for their children during working hours. The Ark also
started assisting low-income single mothers and they provide
The Valero Texas Open Benefit for Children Golf Classic, a safe haven for mothers who need protection form abusive
which has been running since 2002, is a project of the Valero partners.
Energy Corporation raising money for children’s charities in the
communities where Valero has major operations. The 2016 Le Grand Défi Pierre Lavoie
Valero Texas Open Benefit for Children Golf Classic and the
Valero Texas Open contributed USD 10.5 million to children. Euronav is contributing to this fundraising event which takes
As in previous years, Euronav specifically requested for its place in Quebec by supporting the Pilots’ team of lower St
“
Lawrence river. The proceeds are offered mainly to elementary
schools with limited resources in order to invest in promoting
healthy lifestyle habits, as well as to the Pierre Lavoie Euronav offered 170 trainees
Foundation to support research on orphan diseases.
the opportunity to take their first
Argo Foundation professional steps in 2019.
ARGO is dedicated to assisting families of Greek seamen of
niversity of Piraeus, School of Maritime and Industrial
U
which the children battle with intellectual deprival, autism or Studies, & School of Informatics,
infirmities. The organization offers education and care to
University of the Aegean, School of Shipping, Trade and
those with special needs. The charity was founded in 1985 Transport,
by seamen’s wives with disabled children. Nowadays, Piraeus
University of West Attica, Department of Engineering,
based ARGO arranges services for 60 individuals from 17 to 45
Technical University of Crete, School of Production
years old, mainly children of seamen, with medium and heavy Engineering and Management,
learning disabilities.
ALBA Graduate Business School, Athens,
Greek Marine Academies,
School and Training Program
French Maritime School (Ecole Supérieure de la Marine
Marchande),
Euronav has a long history of supporting apprentices, cadets,
Antwerp Maritime Academy.
interns and trainees on our ships and in our shore based
offices. For the year of 2019, this has led to trainee programs The Company attends student events to discuss the
for 170 individuals company wide. Being committed to learning opportunities involved in maritime careers and to encourage
about life at sea and about obtaining the special skills needed wider environmental debate. In 2019 we supported
to be successful in this environment are key factors to inviting Isalos.net, an educational initiative which invites students
young professionals to join our Company. Having the capability of marine academies and universities in maritime studies
and potential to thrive in this challenging sector are vital to conferences. Its panel consists of executives and experts
characteristics we look for in students. in the maritime industry and from other well established
companies in Greece. In 2019 Euronav participated in four
We work with the following prestigious higher education bodies Isalos.net events.
to take students, apprentices, graduates and cadets into our
ships for practical training, and this includes a limited number The Euronav Nantes office participates in the local school
of student sponsorships: Ship Owner Careers Day, which shares information about the
shipping sector with young people who are contemplating
National Technical University of Athens, their future careers. We also invite high potential 5th year
Technological Education Institute of Piraeus, Naval
students to Junior Officers Conferences. Our Athens office has
Architects and Marine Engineers, been supporting the Engineer School of Marine Academies in
and finance sectors, supported by key governments and IGOs. to Zero, Global Maritime Forum, Poseidon Principles), direct
The Coalition is committed to getting commercially viable deep corporate actions (reducing fleet age and carbon footprint) and
sea zero emission vessels powered by zero emission fuels into with tangible technical support to a number of R&D initiatives
operation by 2030 – maritime shipping’s moon-shot ambition. focusing on reducing emissions.
The IMO is looking to reduce the carbon intensity of shipping Established in 1968, ITOPF is maintained by the world’s
through implementation of further phases of the energy shipowners and their insurers on a nonprofit basis to promote
efficiency design index (EEDI) for new ships. This has in popular effective response to spills of oil, chemicals and other
terms focused on two key policy objectives: substances in the marine environment. ITOPF’s membership
currently comprises around 8,000 owners and bareboat
‘IMO 2030’ - to reduce CO2 emissions per transport work, as an charterers of approximately 13,600 tanker vessels with a
average across international shipping, by at least 40% by 2030, total gross tonnage of over 430 million GT. The organisation
pursuing efforts towards 70% by 2050, compared to a 2008 also benefits from the participation of over 810 million GT of
baseline. non-tanker tonnage owned and operated by its Associates.
Euronav’s COO Capt Alex Staring is member of the Board of
‘IMO 2050’ - decline peak GHG emissions from international ITOPF.
shipping as soon as possible and to reduce the total annual
GHG emissions by at least 50% by 2050 compared to 2008. Carbon Footprint Disclosure
Euronav is fully supportive of both policy objectives as reflected Euronav has led the way with disclosure in the large tanker
in our wholehearted commitment to various initiatives (Getting market providing full scope 1, 2 and 3 disclosure of our carbon
Euronav staff travels extensively: crew joining and Webber research believes its scorecard can be used as a tool
disembarking, visits to yards, business travel, etc. With to help evaluate degrees of corporate governance across
this comes a responsibility to do so in the most cost and shipping sectors and individual companies. All else equal,
environmentally effective way. We are measuring the efficacy companies in quartile 1 generally screen more favourably than
and carbon footprint of our travels. the lower quartiles, presenting stronger governance standards
than many of their peers. See special report for more details.
Corporate Governance Policy Euronav is committed to conduct all of its business operations
around the world in an honest, fair, transparent and ethical
Euronav pays great attention to good corporate governance manner. The Anti-Corruption Policy is applicable to employees
as a necessary condition for its long term success. Good and persons who act on behalf of Euronav in a long-term
corporate governance implies that correct and transparent relationship. In general, any third parties who intend to trade
structures are in place ensuring best practice in determining with Euronav are subject to detailed scrutiny by the Internal
the policy of Euronav. The corporate governance charter can Control department, which also considers the appropriateness
be consulted on www.euronav.com. of the business relation in view of the Company’s Anti-
Corruption Policy in addition to the Third Party Risk Policy. Any
Code of Business and Ethics concerns in relation to the Anti-Corruption Policy may be raised
through the Company’s Whistleblower Hotline Platform.
The Board of Directors (since 20 February 2020 called
Supervisory Board) approved the Euronav Code of Conduct Compensation Guidelines
at its meeting of 9 December 2014. The purpose of the Code
of Conduct is to assist all the Euronav employees to enhance These guidelines explain how Euronav sets pay, provides shore
and protect the good reputation of Euronav, more particularly based employee benefits and bonuses. It sets out principles,
in its relationship with customers, shareholders and other timing and process to explain how reward is determined.
stakeholders as well as society in general. The Code of This includes annual salary increases, pay review processes,
Conduct therefore intends to ensure that all persons acting on employee benefits and bonuses.
behalf of Euronav do so in an ethical way and with respect of
the applicable laws and regulations.
Glossary
employment for vessels, billing and collecting revenues,
issuing voyage instructions, purchasing fuel and appointing
port agents.
Ballast - Seawater taken into a vessel’s tanks in order to Contract of Affreightment or COA - An agreement providing
increase draft, to change trim or to improve stability. Ballast for the transportation between specified points for a specific
can be taken into cargo tanks, double bottoms, fore and aft quantity of cargo over a specific time period but without
peak tanks and/or segregated ballast tanks (SBT). All Euronav designating specific vessels or voyage schedules, thereby
vessels are equipped with segregated ballast tanks. allowing flexibility in scheduling since no vessel designation is
required. COAs can either have a fixed rate or a market-related
Bareboat Charter - A Charter under which a customer pays a rate.
fixed daily or monthly rate for a fixed period of time for use of
the vessel. The customer pays all costs of operating the vessel, Crude oil - Oil in its natural state that has not been refined or
including voyage and vessel expenses. Bareboat charters are altered.
usually long term.
DWT - Deadweight Tonnage - The lifting or carrying capacity
Barrel - A volumetric unit of measurement equal to 42 U.S. of a ship when fully loaded. This measure is expressed in
gallons or 158.99 liter. There are 6.2898 barrels in one cubic metric tons when the ship is in salt water and loaded to her
meter. Note that while oil tankers do not carry oil in barrels marks. It includes cargo, bunkers, water, stores, passengers
(although ships once did in the 19th century), the term is still and crew.
used to define the volume.
Demurrage - Additional revenue paid to the ship owner on
BITR - Baltic Index Tanker Routes. The Baltic Exchange is its Voyage Charters for delays experienced in loading and/or
a source of independent, freight market data. Information unloading cargo that are not deemed to be the responsibility of
collected from a number of major shipbrokers around the the ship owner, calculated in accordance with specific Charter
world is collated and published daily. The Exchange publishes terms.
the following daily indices: the Baltic Panamax Index, the Baltic
Capesize Index, the Baltic Handymax Index and the Baltic Double hull - A design of tanker with double sides and a
International Tanker Routes - clean and dirty. The Exchange double bottom. The spaces created between the double
also publishes a daily fixture list. sides and bottom are used for ballast and provide a
protective distance between the cargo tanks and the
Bulk cargo - Bulk cargo is commodity cargo that is transported outside world.
unpackaged in large quantities. The containment for this type
of cargo is the tanks of the ship. Draft - The vertical distance measured from the lowest point
of a ship’s hull to the water surface. Draft marks are cut into
Charter - Contract entered into with a customer for the use or welded onto the surface of a ship’s plating. They are placed
of the vessel for a specific voyage at a specific rate per unit forward and aft on both sides of the hull and also amidships.
of cargo (Voyage Charter), or for a specific period of time at The Plimsoll lines which designate maximum drafts allowed
a specific rate per unit (day or month) of time (Time Charter). for vessels under various conditions are also found amidships.
Charterer - The company or person to whom the use of the Dry-dock - An out-of-service period during which planned
vessel is granted for the transportation of cargo or passengers repairs and maintenance are carried out, including all
for a specified time. underwater maintenance such as external hull painting. During
the dry-docking, certain mandatory Classification Society
Classification Societies - Organizations that establish inspections are carried out and relevant certifications issued.
and administer standards for the design, construction and Modern vessels are designed to operate for five years between
operational maintenance of vessels. Vessels cannot trade dry-dockings. Normally, as the age of a vessel increases, the
unless they meet these standards. cost and frequency of dry-docking increase. After the third
Special Survey, dry-docks will be conducted every 2.5 years.
Commercial Management or Commercially Managed -
The management of the employment, or chartering, of a vessel FPSO - Stands for Floating Production, Storage and Offloading.
ISM - International Safety Management is a set of regulations Semi - A semi-submersible (semi-submerged ship) is a
that operators of tankers must comply with, which aims to specialized marine vessel used in a number of specific offshore
improve the safety standards of the tanker industry. roles such as offshore drilling rigs, safety platforms, oil
production platforms and heavy lift cranes. They are designed
Knot - A unit of speed equal to one nautical mile (1.852 km) per with good stability and seakeeping characteristics. Other terms
hour, approximately 1.151 mph. include semisubmersible, semi-sub, or simply semi.
KPI - Key Performance Indicator. A performance indicator Shale oil - Crude oil that is extracted from oil shale (fine-
or key performance indicator is a type of performance grained sedimentary rock containing kerogen) by using
measurement. An organization may use KPIs to evaluate its techniques other than the conventional (oil well) method, for
success, or to evaluate the success of a particular activity in example heating and distillation.
which it is engaged.
Spar - Single Point Mooring and Reservoir - A spar is a type
LR1/LR2 - Abbreviations for Long Range oil tankers. Tankers of floating oil platform typically used in very deep waters and
with approx. 50-80,000 dwt (LR1) and approx. 80-120,000 dwt. is named for logs used as buoys in shipping that are moored
(LR2). in place vertically. Spar production platforms have been
developed as an alternative to conventional platforms.
MOPU - Mobile Offshore Production Unit.
Special Survey - The survey required by the Classification
OCIMF - The Oil Companies International Marine Forum is Society that usually takes place every five years and usually
a voluntary association of oil companies with an interest in a dry-dock. During the Special Survey all vital pieces of
in the shipment and terminalling of crude oil, oil products, equipment and compartments and steel structures are opened
petrochemicals and gas. up and inspected by the classification surveyor.
P&I Insurance - Protection and indemnity insurance, Spill - Oil getting into the sea, in any amount, for any reason.
commonly known as P&I insurance, is a form of marine
insurance provided by a P&I club. A P&I club is a mutual (i.e. Spot (Voyage) Charter - A charter for a particular vessel to
a co-operative) insurance association that provides cover for transport a single cargo between specified loading port(s)
its members, who will typically be ship owners, ship operators and discharge port(s) in the immediate future. The contract
or charterers. rate (spot rate) covers total operating expenses such as port
charges, bunkering, crew expenses, insurance, repairs and
Pool - A pool is a group of similar size and quality vessels with canal tolls. The charterer will generally pay all cargo-related
different ship owners that are placed under one administrator costs and is liable for Demurrage, if incurred. The rate is usually
or manager. Pools allow for scheduling and other operating quoted in terms of Worldscale.
efficiencies such as multi-legged charters and Contracts of
Affreightment.
RESPONSIBLE EDITOR
Lieve Logghe
De Gerlachekaai 20
B-2000 Antwerp - Belgium