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designed to ensure the long-term health of Teekay. Enhanced operating mode A very basic restructuring of Teekay's marine operations was dubbed "Project Synergy." In short, the move entails the division of the fleet into smaller units, with all aspects managed by a cross- functional ship team, designed to opti- mize fleet operations and make the com- pany more responsive to customer needs. The ship teams support and are supported by standards and policy teams, which fulfill several critical func- tions including acting as a center of expertise to the ship teams; ensuring high, uniform standard of operation and driving continuous improvement. More recently, Teekay has entered into the launch of an innovative marine pur- chasing cooperative known as MAR- CAS. In partnership with two other major shipping entities, MARCAS seeks to leverage economies of scale in the purchase of products and services for ships, and in effect creates an entity that buys supplies for 250 ships. Vessel operating expenses totaled more than $84 million, including salaries — for the company in FY'99, and Teekay antici- pates that cost efficiencies through pro- grams such as MARCAS — particularly with a gradual increase of membership and a widening of the scope of services provided to the organization's members -— will help enhance the bottom line for years to come. According to Bjorn Moller, Teekay's director president & CEO, the company expects the tanker market to remain dif- ficult in the near term, but is counting on The Teekay Fleet Name Type DWT Year Built Hamane Spirit DH 105,300 97 Poul Spirit DH 105,300 95 Roben Spirit DH 98,600 94 Mayon Spirit DH 98,600 92 Luzon Spirit DH 98,600 92 Leyte Spirit DH 98,600 92 Samar Spirit DH 98.600 92 Palmstar Thistle SH 100,200 91 Palmstar Lotus SH 100200 91 Teekay Spirit SH 100200 91 Palmstar Cheny SH 100200 90 Onozo Spirit SH 100200 90 Palmstar Poppy SH 100200 90 Palmstar Rose SH 100200 90 Palmstar Orchid SH 100200 89 Gotland Spirit DH 95,400 95 Falster Spirit DH 95,400 95 Sotra Spirit DH 95,400 95 Ulsan Spirit SH 106,700 90 Shilla Spirit SH 106,700 90 Pioneer Spirit SH 106,700 88 Pacific Spirit SH 106,700 88 Dampier Spirit (FS0) Sh 106,700 88 Namsen Spirit SH 106,700 88 Mersey Spirit DS 94,700 86 Clyde Spirit SD 94,700 85 Nassau Spirit DH 107,000 98 Senang Spirit DH 95,700 94 Sebarok Spirit DH 95,700 93 Seraya Spirit DS 97,300 92 Seafalcon DS 97,300 90 Alliance Spirit DS 97,300 89 Sentosa Spirit DS 97,300 89 Semakau Spirit DS 97,300 88 Seletar Spirit DS 97,300 87 Sudong Spirit DS 97,300 87 Singapore Spirit DS 97,300 87 Silver Paradise DH 105,200 98 Seabridge DH 105,200 96 ToiTess Spirit SH 96,000 90 semaster SH 101,000 90 Hakuyou Mani SH 93,000 87 Cook Spirit SH 91,500 87 Magellan Spirit DS 95,000 85 Bomes DS 88,900 90 Mendana Spirit SH 81,700 80 Shetland Spirit DH 106,200 94 Orkney Spirit DH 106,200 93 Kyushu Spirit DS 95,600 91 Koyagi Spirit SH 96,000 89 Sabine Spirit DS 84,800 89 Hudson Spirit DS 84,800 88 Columbia Spirit DS 84,800 88 Shannon Spirit SH 99,300 87 Clare Spirit SH 99,300 86 Kanata Spirit DH 113,000 99 Kareela Spirit DH 113,000 99 Kiowa Spirit DH 113,000 99 Koa Spirit DH 113,000 99 Kyeema Spirit DH 113,000 99 99 OBO CARRIERS Victoria Spirit DH 103,200 93 Vancouver Spirit DH 103,200 92 Teekay Forum DB 78,500 83 Teekay Fulmar DB 78,500 83 Teekay Fountain DB 78,500 82 Teekay Fortuna DB 78,500 82 Teekay Freighter DB 75,400 82 Teekay Foam DB 78,500 81 Teekay Favour DB 82,500 81 Teekay Fair DH 75,500 81 OTHER SIZE TANKERS Mushashi Spirit SH 280,700 93 Inago DS 159,800 93 Erati DS 159,700 92 Palmerston DB 36,700 89 Banington DH 33,300 89 Scotland DS 40,800 82 Key to Vessel Type SH = Single Hull DH = Double Hull DS = Double Side DB = Double Bottom a medium-term recovery and long-term prospects to buoy the company's finan- cial prospects. In his message to share- holders, Moller notes that global oil con- sumption is again on the rise, parallel with recovery among the Asian economies, and that oil production is continuing to shift to the Middle East countries. This, of course, is a favorable trend to tanker operators, as it requires longer voyages and greater tanker demand. Teekay also points to positive trends within the ship supply and demand side that could indicate a strong charge ahead is inevitable. Specifically, much press has been given in the past few years to the "aging fleet," and the replacement requirement of ships sent to the ship breakers. In 1999, the pace of new tanker ordering has slowed consid- erably in reaction to the poor tanker rates, and Teekay notes that the Aframax tanker orderbook has fallen from 10 mil- lion dwt on order in May 1998 (19.4 percent of the Aframax tanker fleet), to 6.3 million dwt, or 11.5 percent of the Aframax tanker fleet just one year later. Enhancing this trend (from the tanker owner's side) is the fact that the rate of tanker scrapping in 1999 is twice that of the rate in 1998, and scrapping is run- ning at its highest annualized level since the mid-1980s. Factors involved in the decision to scrap are numerous indeed, AMOS Intematic Get the most out of your AMOS system With over 5,000 AMOS installations worldwide there is a wealth of user experience which you can share. Seminars by leading industry figures, lectures and discussions on important topics to all AMOS users. Only US$600 per delegate (excl. hotel accomodation) SpecTec ™ a a _ . • i\ n i- r* I .. i.: Marine Management Solutions ional User Conference Oslo 18-20 October 1999 Book your place now for this important event Phone or fax Petter Mowinckel, Marketing Director Tel: + 47 23136500 Fax: +47 23136501 Or register on our Website: www.visma.com/spectec 14 Circle 271 on Reader Service Card Maritime Reporter/Engineering News
