Bahri Annual Report-2008

Board of Directors Report

Transportation of Crude Oil and Liquefied Gas Crude OilTransportation:

The company’s tendency through the nineties to engage in the transportation of crude oil has been successful by all standards, and its strategic plans to focus on the successive expansion of this activity is rendered to be a good return on equity, through which the company has assumed a leading position in the Middle East. In this regard, the company has pursued a thoroughly studied operational policy for investment in crude oil carriers (VLCC), aimed at achieving a balance between operating revenues and market risks by: Leasing some of its vessels on long-term contracts (Time Charter), to ensure steady income. By the end of 2008, the number of vessels leased on long-term contracts were six, two of which can contribute to the company's rental revenues in accordance with an equation that ensures a minimum level of rent and provides the company with the opportunity to benefit from any rise in the spot market.

Operating in the spot market in order to take advantage of the opportunities available in that market. By the end of 2008, the number of VLCCs operating in the spot market reached seven. The company currently owns (13) VLCCs in service, two of which were received in 2008 and four carriers which had previously been contracted to build are still under construction and are expected to be received during 2009. This comes within the framework of the five- year strategic plan of the company's ambitious expansion and growth in the shipping sector, which envisages that the company’s fleet capacity will be in the range of (5.25) million static tons. Transportation of crude oil and liquefied gas realized an operating profit of SAR 685.6 million in 2008, compared to SAR 260.7 million in 2007, representing 71% of the total operational profits of the company.

VLCCs fleet operational and under construction

Weight (StaticTons)

Length (Meter)

Width (Meter)

Number of Tanks

Speed (Knots)

31/01/1996 30/04/1996 30/08/1996 31/10/1996 14/01/1997 12/10/2001 11/02/2002 17/06/2002 07/11/2002 26/02/2007 24/09/2007 03/09/2008 14/10/2008 March 2009 April 2009 July 2009 Sept. 2009 Date of Delivery

Year of Manufacture

VLCC name

Type

Ramlah Ghawar Watban Hawtah Safaniyah Harad Marjan Safwa

1996 1996 1996 1996 1996 2001 2002 2002 2002 2007 2007 2008 2008 2009 2009 2009 2009

300.361 300.361 300.361 300.361 300.361 302.700 302.700 302.700 302.700 318.000 318.000 318.000 318.000 318.000 318.000 318.000 318.000 5.256.605

340 340 340 340 340 333 333 333 333 333 333 333 333 333 333 333 333

56 56 56 56 56 58 58 58 58 60 60 60 60 60 60 60 60

17 17 17 17 17 17 17 17 17 17 17 17 17 17 17 17 17

15 15 15 15 15

Double Hull

17.1 17.1 17.1 17.1 16.7 16.7 16.1 16.1 16.1 16.1 16.1 16.1

Double Hull

Abqaiq Wafrah Leyla Jana Habari

Double Hull

Kahla Dorra

Double Hull

Ghazal Sahba

Double Hull

Total Capacity