Effective Risk ManagementINTERTANKO Tokyo May 15, 2009

Charles W. ParksVice President - MarineTesoro Corporation

2

Anacortes, Wa• 120 mbpd• Key product:

Gasoline

Mandan, ND• 58 mbpd• Key products:

Gasoline & Diesel

Salt Lake City, Utah• 58 mbpd• Key products:

Gasoline & Diesel

Kapolei, Hawaii• 93 mbpd• Key product: Jet

The Tesoro System

Corporate Office

Singapore Office

Auburn Office

Long Beach Office

Martinez, Ca• 166 mbpd• Key products:

CARB Gasoline & CARB Diesel

Los Angeles, Ca• 97 mbpd• Key products: CARB

Gasoline & CARB Diesel

Calgary Office

Tesoro System Highlights• 7 Refineries• 664 mbpd total crude capacity• Retail network of over 870 sites• 5,600 Employees

RETAIL BRANDS

Kenai, Alaska• 72 mbpd• Key product: Jet

3Tesoro Today

2008

Fortune “150” # 91

Global “500” # 388

Revenues $ 28 billion

Operating Income $ 471 million

Refining & Marketing 100%

4Tesoro Marine – 2008 Statistics

• # of cargo transfers 4,400

• Total barrels moved 315 million

• Vessels vetted 740

• Rejection rate 4.1%

– Poor SIRE reports

– Past experience with vessel/owner

– Inadequate mooring system

• Spills 3

– Volume spilled Trace

5Tesoro Time Chartered Fleet

• 2 – Suezmax

• 3 – Aframax

• 5 – MR’s

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

- All are double hull -

6Vetting Importance

• Protection of people

• Protection of the environment

• Financial exposure

• Business disruption

• Our relationship with stakeholders

• Our reputation as a publicly owned company

• In Alaska we are the oil spill plan holder

7Vetting Importance

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

tankers better than you do,

BUT,

– Not all tankers are the same

– Not all crews are the same

– Not all operators/managers are the same

– Not all owners are the same

8Vetting Infrastructure

• Two tiered vetting system– Corporate level– Local level

• Experienced mariners– Captain Tim Plummer – Head of Operations & Vetting– Vetting Superintendent based at Tesoro headquarters

(Captain Debra Cobb)– Tesoro Marine Superintendent at each waterborne refinery

location

• Tesoro Assessment & Ship Clearance (TASC) system– Centralized data capture– Links to SIRE, Q88, LMIU, industry databases

• Vessel performance feedback• OCIMF member and SIRE submitting participant

9Vetting Process

• Vetting requests are submitted in TASC

• Detailed review of:– Tesoro Vessel Questionnaire - owners submit questionnaires via

Q-88 (www.Q88.com)

– Lloyd’s MIU

– SIRE

– U.S. Coast Guard PSIX

– Equasis & Tokyo MOU

– Internal Facility Feedback & Facility specific acceptability

• Draft, mooring, KTM, DWT, LOA, Beam, etc.

10Vetting Process

• Facility specific recommendation is made to approve

or reject

• Final determination to approve or reject is made and

sent to requestor

11General Criteria

• Key criteria in Tesoro system– Hawaii SPM (official dwt, BMA, draft)

– Alaska (draft, cargo volume, mooring)

– Puget Sound (dwt)

– San Francisco (draft, KTM)

12Summary

“We really don’t think we know how to

operate your tankers better than you do,

but we have a lot on the line as well.”