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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Bill/WA who wrote (99196)	6/12/2003 11:36:44 AM
From: Joan Osland Graffius	Read Replies (1) \| Respond to of 132070

Bill, Knightwbridge purchased the tankers. From the quarterly report: >>On February 27, 1997, the Company’s ship owning subsidiaries purchased five very large crude carriers (“VLCC’s”) from their previous owners and delivered them to Shell International Petroleum Company Limited (“Shell International”), as charterer, under separate “hell and high water” bareboat charters. Under those charters, the Company’s ship owning subsidiaries receive the greater of a Base Rate of hire in the amount of $22,069 per day per VLCC or a spot market related rate. After inclusion of a component for operating expenses of $10,500 per day, the spot market related rate must exceed $32,569 per day for the Company’s subsidiaries to receive any Additional Hire over the Base Rate One thing that did not make sense to me from the write up was the life cycle of the tankers. He stated they were old - and IMO these tankers should have a life cycle of at least 20 years. Also all single hull tankers will be taken out of commission by 2010 and IMO if VLCCF does not renew the contract the equipment should be attractive to companies that need to replace their single hull tankers. TK shipping has a bunch of tankers they need to moth ball. The writers option of scraping the ships makes no economic sense at all.