Group performance TOTAL ENERGY VOLUMES GROUP TURNOVER BREAKDOWN OF GROUP TURNOVER 2010 SPOT CRUDE PRICES VITOL GROUP 2009 EMISSIONS (equity basis) millions of metric tonnes 400 billion US dollars 200 billion US dollars US dollars per barrel (Dated Brent) 100 Tonnes CO2 e 97.25 3814 180 *394 *195 350 191 2208 103785 160 80 300 316 *79.50 20.8 140 291 72.39 145 143 250 120 60 65.14 266 74.8 195 271425 61.67 4.3 200 100 13.8 229 54.52 116 201 200 150 80 14.9 40 160558 1060 82.4 38.27 60 29.2 37.2 100 61.9 40 20 50 20 Crude Oil 74.8 tCO2e EFFICIENCY Gasoline & Naphtha 37.2 00 00 Gas Oil & Jet 29.2 00 E&P 160558 0.0284 tC02e/bbl Fuel Oil 14.9 VTTI 103785 0.0029 tC02e/m^3 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 Natural Gas 13.8 Travel 3814 n/a n/a LPG 4.3 Coal 2208 0.2558 tC02e/te coal Other trading 20.8 Oﬃces 1060 0.0093 tC02e/ft^2 *As at 10 January 2011 Total 195.0 Total 271425
ENERGY 01CONTENTSViTol Trading Terminals, refining and shipping02 Welcome 16 Introduction 44 Introduction04 A physical trader 18 Crude Oil 46 Terminals06 Global reach 19 Natural Gas 48 Case study08 Local understanding 20 LPG – A major new terminal for Florida10 Speed & flexibility 21 LNG 50 Refining12 Partnership 22 Case study 52 Shipping14 People, systems & liquidity – Pre-financing of crude oil 24 Naphtha UpsTream 25 Gasoline 54 Introduction 26 Gas Oil & Jet 56 Upstream 27 Vitol Aviation 58 Case study 28 Fuel Oil – Marketing a new crude oil 29 Coal 30 Power index 31 Carbon 32 Case study 60 Network Locations – Utility energy supply 34 Ethanol 35 Methanol 36 Chemicals 37 Non-Ferrous Metals 38 Case study – Securing the future of a coal mine 40 Sugar 41 Risk Management 42 Case study – Risk Management
02 VITOL ENERGY 03A WARM WELCOMEThe Vitol Group exists to help meet the energy needs of Our trading is, first and foremost, physical. We charter tankers and move crude oil of experience in the business of oil transportation, market intelligence, refining, a rapidly changing world. and oil products. Products such as gasoline, diesel and heating oil, fuel oil, jet distribution, marketing, trading and finance. fuel, naphtha and non-ferrous metals, as Our shareholders are our employees, and well as ethanol and chemicals: all over the this fosters a true spirit of partnership world, every day. And we pipe gas, fill and internally: every facet of the business andOne of the world’s largest independent energy trading operate terminals, ship coal and sugar. its well-being is of fundamental importance to us all. We attract talented entrepreneurs companies, we find, extract, refine, trade, store and transport The breadth and reach of our global who respond to the exciting opportunities network gives us a profound understanding that an independent company gives them. materials and resources from where supply is abundant of the intricate interdependencies of the world’s energy markets. Our status as a We’re resourceful and adept at understanding and managing risk. We trust to where demand is great. We forge connections; we trade private company and non-hierarchical our people, and give them considerable partnership structure gives us a unique ability responsibility. We make decisions quickly, physical commodities; we help make things happen and to act swiftly, innovatively and decisively. with short chains of command.markets work. We are, by any standards, a major participant in world energy trading. In 2010 This solid platform allows us to build long-standing partnerships with our we shipped nearly 400m tonnes of crude customers, who look to and rely upon oil and product; we had revenues of $195 bn Vitol for nimble thinking, creative and we offer 24-hour coverage of world solutions - and an unwavering There, any apparent similarities with other oil and gas markets. We also couple physical resources commitment to reliability. with in depth expertise in risk management.conglomerates end. We do things differently, and the Founded in 1966 with the focused aim ofdifference lies less in what we do than how we do it. This trading crude oil and oil products, Vitol is still resolutely an independent group of brochure is designed to take you inside the world of Vitol separate companies, each staffed by energy professionals with a true depthand show you how our 360° expertise and unique culturecombine to make us one of the energy sector’s businesspartners of choice.
04 VITOL ENERGY 05A PHYSICAL TRADEROurs is primarily a physical distributionbusiness and one that operates on atruly global scale. We identify imbalancesbetween supply and demand and we ...to where it is neededact quickly and safely to restore the When massive Mediterranean swells caused Algeria’s Arzew-Bethioua port to close down, supplies of LPG to Western Europe were threatened. Our ability to take on tough physical equilibrium. We move energy from trading challenges meant that we were able to supply a region extending from southern France to eastern Poland by transporting LPG in rail cars over the Alps. where it is sourced and stored…We are not speculators on absolute pricemovements. Nor do we expose ourselves Our principal responsibility is to our customers; we are able to think fast and 134m Tonnes of CrUde oil sales in 2010or our customers to unnecessary risks. act decisively. Vitol is a broadly based group VersUs 110m Tonnes in 2009Rather, we use our worldwide reach, of complementary businesses and welocal understanding and experience to have the systems, people and flexibility to anticipate change, marshal resources and deliver innovative, effective and reliable make intelligent connections, optimise economies of scale and create external 5m+ oVer 5m Barrels of CrUde oil andlogistics solutions. partnerships every bit as enduring and prodUCTs Traded eVerY daY BY ViTol open as their internal counterparts.
06 VITOL ENERGY 07GLOBAL REACHVitol’s global reach means we have apresence and local expertise whereverin the world energy is sourced, stored,transported, traded or needed. The sizeand diversity of our complementaryworldwide interests means that wetruly understand the markets in whichwe operate…There’s more to running an international network than simply having offices around As one of the world’s largest oil and gas traders, we understand the nature of the 6 regional CenTres ...and we understand the relationships between themthe world. We forge partnerships with local relationship between energy demand businesses and hire the best people to help and fuel supply. Our information systems There’s more to global reach than having a presence all over the world. Global reach is the ability to see the us work with, not against, the prevailing business culture. Indeed, we are often told enable us to see opportunities across oceans and geo-political boundaries, 21 addiTional offiCes WorldWide bigger picture, gain local insights and anticipate how changes in demand in one part of the world will affect supply to another.by customers that we’ve won a contract and we have the shipping and storage A particularly cold winter in Asia means that demand for kerosene – jet fuel – escalates as people turn to 3,150because we’ve clearly tried harder to gain resources to rapidly adapt to changing an understanding of how local practices, circumstances and consistently try to it for domestic heating. Because we know when, where and how this happens, we’re able to source, trade regulations and cultural differences make the right trades at the right time. emploYees in Trading & UpsTream, VTTi and deliver alternative supplies of jet fuel for the US and European markets which otherwise would havecharacterise their local markets. and araWaK WiThin The ViTol groUp been supplied from Asia.
08 VITOL ENERGY 09LOCAL UNDERSTANDINGWe pride ourselves on our commitmentto embracing the nuances, dynamics andunique sensitivities of local markets. Vitol isa partnership, and one that looks to formexternal partnerships based on fair andmutually agreed objectives wherever in theworld we are doing business. We listen… We employ the best local people and use their expertise and experience to 250 CarBon proJeCTs WorldWide ensure that wherever we are doing business, we are sensitive and alert to the cultural, economic, political and environmental concerns of the community. There is no imposition of ‘one size fits all’ solutions dreamed up ...and we learn in a distant Head Office. Rather, we form Ghana’s offshore fishermen told us that our seismic surveying ship was a problem for them, partnerships born of common interest particularly at night, when their small wooden boats were effectively undetectable by Vitol’s and long term sustainability. seismic vessel. We commissioned local people to help us make simple metal radar reflectors for the fishing boats so that they could be seen and avoided at all times, letting them carry on with their business, while we carried on with ours.
10 VITOL ENERGY 11SPEED & FLEXIBILITYEnergy markets are volatile. They changewith the political climate, with shifts insupply and demand, and with currencyfluctuations. They change with theweather, with elections, with technologicalbreakthroughs and with economicbreakdowns. We anticipate… ...and we act fast Our strength lies in being able to anticipate and react to change faster and more 5,291 ship VoYages in 2010 With existing shipping unable to convey the required tonnage through the inland waterways of the Amazon river, we spoke to ship owners and marine architects and commissioned vessels of wider beam and shallower draft. effectively than our competitors. It is a strength that gives us the time and space to innovate, to think laterally and to make the most of the opportunities presented to us 200+ ships on The sea aT anY one Time by a unique, comprehensive and balanced portfolio of energy sector interests.
12 VITOL ENERGY 13PARTNERSHIPVitol is a very different kind of business.It is a privately owned company andone in which the focus is always, withoutexception, on our customers. And whenwe say customers…Our partnership model is at the heartof the way we do business and gives us This is a confederation of entrepreneurs in which everyone works together for the 330 aCTiVe emploYee shareholdersa very real advantage as compared with greater good of both the business and competitors who are required to consider our customers.the needs of external shareholders as well as customers. The partnership model is not confined to inward-facing expressions. Far from it. Vitol is owned by its employees. That Our customers are partners, too, andmeans that every business decision our relationships with them are born ofhas the potential to affect – positively equality, mutual respect and the desireor negatively – every employee. Vitol people have a very real interest in seeing to build and sustain lasting value for both parties. ...we mean partnerssuccess across every part of the business. At the end of 2003, Iraq was on the brink of a major humanitarian crisis. Bombed refineries and wrecked infrastructure meant that the country had effectively run out of gasoline. Vitol’s partnerships with customers on the ground allowed us to act quickly. We shipped gasoline to the only available port – a military container dock in Umm Qasr – and off loaded into fleets of specially adapted trucks. We also provided the Iraqi Oil Ministry with an extended line of credit and so helped avert a potential disaster.
14 VITOL ENERGY 15PEOPLE, SYSTEMS & LIQUIDITYVitol’s unique combination of talent, ...and we have the human, information technology and financial resources to make the most of themtechnology and resource management Local knowledge, experienced traders and fully integrated data management systems allowed us to understand the underlying reason for a big surge in demand gives us the ability to turn ideas for propane in the Bordeaux region. The region’s plum brandy producers were rushing to dry the plums after a particularly wet harvest. If you know why demand increases, you know how and when to meet it.into reality – quickly and securely.We see opportunities…Vitol people stay with Vitol. We aim to hire the best people in the marketplace and we We have the right people and the right information. Finance is the facilitator $195bn of reVenUe in 2010make sure that they share our professional that allows us to complete the circle andvalues. We hire on merit and experience, take decisive action – even in volatilenot just potential, while our partnershipstructure fosters a culture of conservative or high priced markets – secure in the knowledge that we have both proven risk 44 ConseCUTiVe Years ofrisk management. management tools and robust liquidity profiTaBle operaTion metrics. Whether we are structuring a Our people have the best information at pre-finance deal or working with any their fingertips, thanks to our proprietary of our 50 or more worldwide banking ‘Vista’ system. Unequalled in the industry, partners, we are known and trusted as athe system – designed by Vitol for Vitol – business with firm and carefully managed allows users to view the progress of each financial foundations.transaction from all angles, connecting everyone involved to a ‘big picture’ of real time data.
16 VITOL ENERGY 17 TRADING Trading is the engine of our business, and energy – in many different physical forms – is the resource we trade the most. In fact, almost all of the Vitol Group’s activities are driven by trading – from exploration, to shipping, to storage. More than simply a thread linking every aspect of what we do, trading is the conduit through which we receive and share vital market information, maintain the balance and flow of our liquidity, and forge lasting, rewarding relationships with customers all over the world. We take pride in our ability to take can see the real relationship between on difficult, complex projects and cause and effect. We don’t make decisions deliver effective solutions quickly and based on theoretical modeling or transparently. Because our partnership mathematical abstractions. With 5,291 model is based on collective responsibility, ship voyages in 2010 and over 200 we are careful to assess risk exposure on ships at sea at any given time, Vitol is – the ground, in local markets – where we by any definition – a very physical trader.
18 VITOL ENERGY 19 01 gas drying unit at BeB’s underground gas storage site in harsefeld, near hamburg 02 Vitol has long term pipeline contracts extending up to two decades aheadCRUDE OIL NATURAL GAS 01 02What we do how we do it What we do how we do itVitol is a significant participant in global crude oil markets and crude oil is the largest part of Vitol’s total energy portfolio. In 2010 we sold around 130m We believe that we offer a competitive advantage because we have the flexibility, speed and logistics expertise that our customers need and expect. 134m Tonnes of CrUde oil sales in 2010 Our gas teams operate across three continents – Europe, Asia and the Americas – in both pipeline product and LNG, and we follow the business model The scale of our operations and extent of our geographical coverage allow us to take an holistic view of market changes, leverage economies of 20 bcm ViTol moVes 20 BCm of phYsiCaltonnes of crude oil which amounts to more than More than 44 years experience of turning market that characterises every part of the Vitol Group: scale and match supply to demand wherever and gas per Year in eUrope 44 Years2.5m barrels per day. This compares with crude oil intelligence into market advantage as well as our physical trading based on transportation and whenever the need arises. We have built on the 30 mcmsales of 110m tonnes in 2009. extensive links with all the major crude producers logistics, storage and arbitrage. relationships in place with our energy industry and refiners means that we are able to work with of experienCe in TUrning partners, and invested in new relationships andWhere we do it existing and new crude streams in any part of the inTelligenCe inTo marKeT adVanTage With over 15 years’ experience in the gas business, innovative contractual arrangements with suppliers, ViTol’s sTorage faCiliTies in eUrope deliVerVitol trades crude oil globally. We have a presence world. This will help the producer to understand the Vitol has grown it’s physical supply to more than pipeline and storage operators in the gas sector, Up To 30 mCm per daY of phYsiCal gasand on the ground expertise wherever crude is real value of the crude oil. 20 BCM per annum in Europe alone, supported and with commitments reaching out nearly two produced, traded, stored and supplied to customersfor refining. This means that we operate in Africa, the We also help our customers manage their risk on 394m Tonnes of ToTal CrUde and enabled by storage capacity across the key countries. We work with producers, wholesalers, distributors decades ahead. 1.5mMiddle East and the Far East, as well as in Russia, the margins and prices, all within an overall commitment and industrials on a global basis – our unique In addition to being one of the main liquidity prodUCT sales in 2010 Tonnes of lng sales in 2010Caspian, and North and South America. to the development of long term relationships that independence combined with innovative solutions providers at trading hubs and cross border points, benefit all parties. Our long established ventures for has made us the partner of choice for our significant and flexible portfolio makes us an We have local offices in countries around the example with the state oil companies of Nigeria and a number of important industry participants. ideal trading partner for tailor-made, structured world covering everywhere from Buenos Aires to Oman are clear demonstrations of our commitment products. We are able to offer our clients a wide Beijing, and Luanda to Latvia. Having a presence on to long term relationships. Where we do it range of both physical and virtual services – helping the ground is key to our approach to getting first We deliver gas to customers in virtually every country them to expand across markets and borders. They hand information as it happens and sharing that Overall, we lift crude oil from all the key producers across Europe – from Slovakia in the East to Ireland can benefit from Vitol’s core strengths in risk and information, quickly and efficiently. and sell to every refining company in the world, in the West, and from the North Sea to Italy and Spain portfolio management, where we are able to help wherever they are located. in the South. them to maximise the profitability of their portfolio with a range of sophisticated solutions. Across the Atlantic we source and trade Canadian gas, and facilitate the growing LNG trade around the US Gulf region, where we have invested heavily in storage.
20 VITOL ENERGY 2101 The Charlton forms part of a 40+ LPG tanker fleet built to 02 Oman LNG’s tanker, Sohar LNG, was one of Vitol’s first Vitol’s specifications within the last ten years to enable us lng charters to meet increasing demand with flexibility and speed 01 02LPG LNGWhat we do Where we do it What we do Where we do it ToTal indUsTrY lng VolUmesVitol is one of the largest international LPG traders. Our fleet ships considerable volumes to countries 40+ Vitol moved into the LNG marketplace because We have developed existing relationships and World gas intelligence, may 2009 300 mTWe have the world’s largest pressurised vessels and, where bottled gas is popular – such as Portugal, it is a logical progression for our business and has quickly established new supply partnerships in Asia, mT = m tonnesindeed, the largest fleet. France, Germany, Poland, Morocco and Turkey – fleeT of lpg TanKers BUilT clear synergies with our other trading, shipping Europe, the Middle East and the Americas. Through as well as supplying cargoes to the US, China, To ViTol’s speCifiCaTions and storage activities as well as with the interests our network of regional offices and locally in country At the core of our operation is a fleet of more than West Africa, East Africa and the Caribbean. of our customers. we are able to work with our customers on their 200 mT40 LPG tankers. These vessels, built primarily within short and longer term requirements.the last ten years to Vitol’s specifications, enable us Vitol also has access to LPG storage in Europe, We started by focusing on the pure spot market, 185 mT 172 mTto offer excellent flexibility and, importantly, speed as well as West Africa, through a joint venture cargoes not sold under long term contracts. While how we do itand reliability. Refiners tend to have limited LPG that will see significant reductions in flaring in this important sector of the industry is continuing Vitol’s independence is important to our LNG 158 mTstorage on site, and with increasingly stringent Nigeria by providing infrastructure for the gas to grow, it will remain a small proportion of the total customers. Unlike many of the largest operators, 140 mTflaring regulations they need to be able to ship to be marketed inland. trade annually. Increasingly, Vitol is moving more we are impartial and uncompromised, with no jointthe gas to market quickly. towards long term contracts to support our natural ventures or upstream/downstream obligations. 2005 how we do it gas business and provide broader services to our Our business is based on the market fundamentals, 2006By collecting, shipping, storing and trading gas that Our size is not and never has been an end in itself: customers. We continue to apply our core energy and our customers gain by our ability to respond 2007would otherwise be flared, we are meeting the needs it is simply a consequence of our success and the trading skills to bring opportunities and new risk with speed and flexibility. 2008of both the petrochemical industry and domestic strength of our customer relationships. The Vitol management solutions to the sector. By taking LNG users, as well as supplying the growing demand for LPG team is truly multinational, and we use local from areas of surplus, we are actively contributing to 2009 (forecast)autogas. We are also making the best economic use knowledge and insights to anticipate demand and the growth in the market. 2012 (forecast)of a resource that otherwise would do no more than react swiftly and efficiently. Increasingly, we work contribute to climate change. with oil and gas companies as a logistics and risk management solutions provider, and we are known In addition, Vitol is highly active in the refrigerated for our ability to bring innovative thinking to life long-haul arbitrage business, ready to move cargoes through decisive action. wherever global market conditions dictate.
22 VITOL ENERGY 23CASE STUDYPRE-FINANCING OF CRUDE OILWhen a small producer discovered a crudeoil field in Kazakhstan, they wanted torelease cash from future exports to assistin the development of their business.Vitol was invited to participate in Vitol’s presence in this three-waya pre-financing venture: agreement was the key to its success.• itol entered into an offtake agreement V with the producer.• he bank agreed to loan funds to the T producer based on the security of the offtake agreement.• tri-partite agreement was signed A between the producer, the bank and Vitol.• itol pays part of the value of each V cargo directly to the bank, repaying the producer’s loan.
24 VITOL ENERGY 2501 Vitol trades and operates in every naphtha producing 02 The truck loading rack at our amsterdam Terminal has country in the world the capacity to fill between four and six trucks per hourNAPHTHA GASOLINE 02 01What we do What we do how we do itVitol trades and moves approximately 14m tonnes of naphtha globally per year. The volume bought and sold has grown steadily over the last five years. We have a growing number of partnerships in Russia – where we have an exclusive naphtha terminal in Kaliningrad – and the former Soviet states, Asia and Every day, Vitol moves over 850,000 barrels of gasoline – more than twice the UK’s entire daily demand. At any given time, Vitol will have between In a non-commoditised market, where gasoline specifications differ according to state and country regulations and where change is increasingly driven 22.4m Barrels per daY of gasoline 6.4mWe source, trade and move naphtha feedstock and North Africa. 50 and 100 gasoline tankers on the world’s oceans, by environmental concerns and a growing demand ConsUmed gloBallY in 2010clean condensate for petrochemical customers, and is a significant supplier of gasoline to the USA. for low sulphur products, market intelligence 850,000refineries and large industrial concerns, leveraging We have a truly global presence and principal We are experts in identifying added value and really matters. Our experience, combined with our the logistics advantages available to us through the offices in Houston, Geneva, Singapore and London. arbitrage opportunities and we aim to develop long understanding of worldwide energy markets, gives scale and flexibility of our global shipping, strategic Consequently, we are able to optimise our arbitrage term strategic relationships, either by supplying or us an in depth, real time awareness of the specific ViTol Trades approx. 850,000 Barrelsstorage and arbitrage operations. We strive to be activity through 24 hour coverage of world markets. by offtaking and often adapting to changing local needs of end users. Our logistics reach and ability of gasoline per daY WorldWidethe leader in both supply and delivery contracts to Barrels per daY of naphTha specifications to ensure security of supply. to act decisively wherever demand occurs meansensure the best value for our customers. how we do it ConsUmed gloBallY in 2010 we’re able consistently to understand and We bring all our core oil trading values, skills and Where we do it meet those needs.Where we do it services to the naphtha market: clients rely on us for We operate, trade and participate in tenders inWe operate and trade with every producing country our physical expertise, our professional operations every producing country in the world. We own in the world. We lift from Saudi Arabia, the Emirates, staff as well as our absolute commitment to deliver and lease extensive storage in Singapore, Fujairah the Russian Federation, South America and North products that are on specification and on time. (UAE), Houston, California, the Netherlands, Latvia,and West Africa to name a few. We facilitate the Our ability to always deliver is a reflection of our Argentina and Canada. We serve the requirements of requirements of refiners, state-owned oil companies commitment to building long term relationships, refiners, state-owned oil companies and marketers and marketers in North America, Europe, Russia, the the flexibility afforded by our shipping and storage in North and South America, Europe, the Middle East,Middle East, Africa and the Far East – and are working resources, our financial security and our complete Africa and the Far East – and are working hard to hard to meet the growing needs of refineries and range of risk management skills and tools. meet the growing needs of refineries and ethylene ethylene plants in China and India. plants in China and India. We have a growing number We have the skills and track record to respond of partnerships in Russia and the former Soviet to opportunities swiftly, reliably and, whenever states. Our markets are global and include California, necessary, innovatively. one of the most highly regulated gasoline markets in the world.
26 VITOL ENERGY 2701 Vitol supplies jet fuel to airlines throughout the world 03 our storage capability extends to strategic locations in 1102 Vitol’s experience and expertise in handling physical product countries across 5 continents. We have capacity of 6m cubic plays an essential role in our success within this sector metres, and new projects that will grow the capacity to 8m cubic metres by 2013, with terminals at the worlds key trading hubs.GAS OIL & JET VITOL AVIATIONWhat we do how we do it What we do how we do itVitol is the world’s leading trader in middle distillates and has a real depth and reach of expertise in global arbitrage business. We are one of the largest users of Excellent market intelligence underpins each and every trade we make. We are keen observers of economic, political and consumer trends on both Vitol Aviation was established in 2010 for the specific purpose of providing both bulk and into wing jet fuel supply to a broad inland customer base, sharing the As one of the world’s largest bulk traders of jet fuel, Vitol has always been a major participant in trading markets, with significant supply contracts with all Over 1m Tonnes of JeT fUel sold inTo 25monshore tank storage, with 70% of product stored in macro and micro levels; we understand how cold benefits of Vitol’s global supply chain efficiencies and the major export refiners, including in the Middle plane in Usa and oVer 1 mVitol-owned tanks. weather in Asia affects supply to Europe; we try expertise. A long term value offering of both physical East, Europe and the Far East. Underpinned by this Tonnes of JeT fUel sold to predict, anticipate and react to international, jet fuel, risk management and carbon reduction security of supply, we have an understanding of the inland aT airporTs in BUlKVitol already supplies jet fuel to many of the world’s national and regional imbalances wherever in instruments. dynamics that influence jet fuel prices and linkage and inTo plane in eUropeairlines. We are rapidly expanding our business in this the world they occur. with our trading and risk management business. 1marea, adding value through our wealth of experience Where we do it This is supported by an unwavering commitment to in handling physical products. Drawing on our global trading, shipping and Barrels per daY of gas oil PTFC, now Vitol Aviation Company, has been becoming a significant participant in the wholesale storage resources and expertise in the US, South ConsUmed gloBallY in 2010 supplying aviation fuel to the US West Coast since and retail jet markets. A firm base on which to build Tonnes of JeT fUel aVailaBleWith our strong storage position and market America, Europe and Asia, we are ideally placed to 2007 and now supplies more than 1m tonnes this new enterprise. in The ara Basin and 70%expertise we are one of the key global suppliers of move cargoes and realise the opportunities arising per year into plane at Los Angeles, San Francisco, assoCiaTed sUpplY Chains,gas oil and ultra low sulphur diesel (ULSD). As the from regional and global imbalances. Our detailed Honolulu, Las Vegas, San Diego and Ontario proViding seCUriTY of sUpplYworld moves towards ever cleaner sources of energy, knowledge of specifications – particularly important of ViTol’s onshore gas oil and airports. Since then Vitol Aviation has expanded it’s and flexiBiliTY.Vitol is also emerging as one of the significant players in jet fuel – gives us a real advantage in achieving JeT sTored in ViTol-oWned TanKs airport network to include Orlando (MCO and SFB), in biodiesel, offering a full range of fuels from B5 to better trading performance. Melbourne, Gainesville, Jacksonville and Daytona B100 based on sustainable oils. Beach in the US, Frankfurt, Brussels, Luxembourg, Global arbitrage has long been a core Vitol strength. Liege, Stansted and Manchester in Europe and Hong Where we do it Today, it is a structural feature of the middle distillates Kong in Asia. Further plans are in place to expand this We have offices in Houston, Geneva, London, market and, as such, Vitol is fully qualified and network to include all major global hub airports.Singapore, Bahrain, Dubai and Moscow and we equipped to optimise trading opportunities – serve the key distillates markets in Asia, Europe, both now and in the future.the Middle East, South America and the US. We are actively expanding our business in Africa and China. flexiBle gloBal sUpplY Chain generaTing BUlK effiCienCes for The end UserOur middle distillates trading is supported by Vitol’s expertise and scope of resources in storage, based in Singapore, the Middle East, the US and a network of locations throughout Europe. 02 03 01
28 VITOL ENERGY 2901 euro Tank rotterdam is equipped with jetties capable of 02 Capesize mV xin fa hai, loading at Bayan’s newly accommodating vessels ranging between bunker barges built 60kt capacity Kalimantan floating anchorage and VlCCs. The second phase of the expansion was completed off East Kalimantan, Indonesia at the end of 2008 and has increased capacity to 642,000m3. phase three will be completed by the end of 2011FUEL OIL COALWhat we do how we do it What we do Where we do itVitol is one of the most long established and active independent physical traders in the global fuel oil market. Every month, we ship more than 1m tonnes We have the flexibility, speed and logistics expertise that our customers need and expect. Our longevity and success stems from our ability to add value Around 30% of The World’s fUel oil is Having entered the coal market in 2006, Vitol has grown rapidly to become one of the world’s top 5 coal traders. Vitol partners, finances and owns mines in Indonesia, Canada, South Africa, Columbia and Russia. We supply across the Asia Pacific region and into all Vitol is also focused on other areas central to the sector. In dry freight Vitol adds real value to their coal presence by taking longer term positions in cape, of fuel oil. Approximately 50% of our fuel oil business beyond simply moving physical product. Vitol is ConsUmed BY ships major European power utilities. Vitol is one of panamax, and handy sized vessels and compliment is based on trading feedstocks, bought by refiners for resolutely customer focused, providing fuel oil In recent years, the coal market has become the largest suppliers to the Comision Federal de this by being an active player in the shipping futures 50%further upgrading. solutions, stocks and risk management solutions increasingly liberalised, with new grades of coal Electricidad, Mexico’s state power utility. market. Additionally Vitol also now has a presence in all over the world. We also have the experience and and pre-financing instruments creating a more the biomass market and is involved in shipping and We have a large and increasing share of the bunker in-house blending expertise to meet refiners’ widely sophisticated environment and one that is ideally how we do it marketing of wood pellets of oUr fUel oil is BoUghTmarket, driven by the establishment of strong varying demands for different blends of feedstock. suited to Vitol’s experience and expertise. We cover Our flexibility, liquidity and risk management BY refiners for fUrTher Upgradinglong term relationships with fleet owners. We have a wide range of specific origins for both steam coal expertise allow us to work in more challenging Our approach is personal and trusted. We build long also built an extensive and expanding network of We are able to optimise the value of a seller’s stream and anthracite, have a presence in every major environments, both as a producer and a buyer, and term relationships with local partners and we investstorage terminals – both owned and leased – in key and to meet and exceed the demands of refinery, mining region and are successfully meeting the to trade in forward markets up to five years ahead. in a shared future.strategic locations. bunker and vessel owners. We succeed by being diverse needs of customers around the world. We are also applying models employed in oil and consistently dynamic, innovative and well-informed. natural gas; by focusing on the physical aspects, Where we do it gloBal fUel oil moVemenTs As well as investing significantly in production we can add significant value in areas such as coal Vitol trades fuel oil globally. We have extensive output, we have signed long term contracts with finance and logistics. storage facilities including Rotterdam, Fujairah producers in both the Far East and Europe andand Singapore. We source high sulphur fuel oil are now a major trading presence in steam coal. from markets such as Mexico, the Middle East Similarly, we are finding long term outletsand the former Soviet Union, to ship to Asia and with utilities. CANADA RUSSIAtake low sulphur fuel oil from the USA and Europe,often to Asia. Feedstocks are frequently sourced Anthracite is another significant strength, withfrom Europe, North and West Africa and shipped long term contracts in Russia, Ukraine and South to refiners in the US Gulf Coast. Africa, and we support this with a full break-bulk operation (for storage, handling and wholesale) in Ghent, Belgium. COLOMBIA INDONESIA hsfo ViTol’s gloBal mining operaTions lsfo SOUTH AFRICA Vgo/lssr 01 02
30 VITOL ENERGY 3101 Our power offering has a natural synergy with our activities † Bart Chilton, CfTC Commissioner and Chairman of CfTC in natural gas, coal and carbon emissions. Combining these energy and environmental markets advisory Committee functions provides a choice of solutions to utilities.POWER CARBONWhat we do how we do it What we doWe access power station capacity (by supplying fuels in exchange for power) – transport power cross-border – and operate as a power trader. Take, for example, an investor in a power plant who wants to lock in a fixed rate of return. Vitol might propose a solution whereby we take the power the 500m TW hoUrs Traded BY ViTol in lasT 12 In time, the carbon market could be the largest commodity market, surpassing even oil†. Today, Vitol has one of the largest and most diverse Our partnerships are key – including our ownership of carbon credit aggregator CRM and our successful joint venture with ICECAP, to name but two.We also have the flexibility to offer products that plant generates in exchange for fuel supply and monThs in UK, franCe & germanY carbon project portfolios in the world and our KEY pROjECTmimic power station dynamics and economics. emissions credits. The investor gets the comfort of involvement and expertise in carbon markets is Ultimately, we are focused on delivering value for our INITIATIVES wORLDwIDE: a margin over a defined term, and is protected from global and comprehensive. partners, whatever their objective and our clients are STruCTurE: AAu/CEr/EuAThere is a natural synergy with our existing activities volatility on power prices and the fuel needed to as diverse as our portfolio. They include: foresTrYin natural gas, coal and carbon emissions, and by produce it. Where we do it • Industrial companies looking to monetise their Cdm/Jicombining these functions we are able to offer a full Whilst Vitol has a global reach, we remain very much carbon position. gloBal Tradingrange of multicommodity management solutions Our experience as an oil, gas and coal trader gives poWer Trading a hands-on, physical trader with a local presence • Utility companies seeking liquidity in VolUnTarYto power plant owners and developers, utilities and us a rare and profound understanding of the where it matters. With carbon desks in Geneva, the marketplace. Us CarBonlarge industrial users, generators and suppliers, new relationship between energy and fuel. We leverage Singapore, Beijing, Dubai, Houston and London we • Governments, for whom Vitol can facilitate themarket entrants and hedge funds. this understanding to generate efficiencies, generaTion cover the global carbon market from Europe to US, meeting of compliance obligations. UniT predict trends and develop effective long term Japan to Australia and everywhere in between. • Pension and hedge funds, looking for a trading Where we do it risk management solutions. partner with solid expertise.Vitol has developed physical and financial positions fUel & how we do it • Project developers, looking to maximise the poWer CarBon emissionsthroughout Europe. This augments our existing We are independent of any utility or finance house, & Tolling fee Vitol is one of very few participants in the market profitability of their projects through our sophisticated power activity in the US, where we are active in we look to build and sustain long term relationships whose involvement extends all the way from project portfolio and risk management solutions.trading power forwards and options in the eastern whenever possible and we have the liquidity, assets inception to trading activity – right through the value states. We are also active across the UK, France, and reach to structure bespoke deals. VITOL chain. The size and diversity of our projects portfolio Vitol is constantly looking for new partners in the Germany and the Benelux countries, with a reach allows us to take on trades and structures that others carbon market. This highly complex market presents that is broadening to extend into Italy, Switzerland might have to syndicate. Although our portfolio is many risks – commercial, political and legal – and and Scandinavia. wide ranging we pride ourselves on being a small Vitol is ideally placed to help our partners safely team enabling speed of decision making – key in navigate these hazards while adding real and a dynamic and constantly changing environment. measurable long term value. gas Coal emissions marKeT marKeT marKeT 01
32 VITOL ENERGY 33CASE STUDYUTILITY ENERGY SUPPLYAs markets open up, this can create many Vitol worked with the generator to: • in their fuel oil supply tender at W competitive prices, acting as their ‘eyes The utility company now has access to Vitol’s unrivalled global network for the sourcing of feedstocks, and benefits from opportunities, and a state-owned electricity and ears’ around the global marketplace. • ring in our expertise and recommend B improvements to ensure optimum pricing, our expertise in price hedging and our ability to source alternative energy supplies.generator in Europe approached Vitol and possible price/margin hedging. • eview supply facilities and recommend R improvements, including financing to explore how we could add value as a options. • ropose different supply arrangements P – e.g. coal, natural gas, LNG – as well as supplier of their feedstocks. possible CER projects.
34 VITOL ENERGY 35ETHANOL METHANOLindustry Context that ethanol trading will remain essential for any how we do it What we do Where we do itThis past year also saw a historic shift in the patternof trade for ethanol. Until 2010 Brazil was the world leader in ethanol exports and the United States company exposed to the U.S. transportation fuel markets. The second quarter of 2010 saw the startup of Vitol’s grassroots storage, blending, distribution and marketing of finished gasoline and biofuels in Methanol is a highly versatile commodity and one for which demand is growing rapidly. Methanol derivatives find use in both energy Vitol has methanol teams in Houston, Geneva, Rotterdam, London, Dubai, Singapore, and Beijing. Vitol’s key partnership in Oman Trading International 2m ViTol plans To moVe 2m Tonneshad been the world’s largest importer of fuel 2011 and beyond will continue to bring increased Port Canaveral, Florida. Canaveral is Vitol’s first and petrochemical applications. In the energy supports its growing methanol business via its of meThanol gloBallY in 2011grade ethanol. ethanol mandates from the Renewable Fuel Standard entry into the U.S. market for rack marketing of sector the market for methanol is expanding offtake from the Salalah Methanol Company. We also in the US, the Renewable Energy Directive in Europe, transportation fuels. This important terminal location rapidly as methanol is used in transportation have long term supply and offtake relationships with That supply and demand relationship changed and a variety of other programs around the world. has had an excellent start and we have seen a rapid fuels and DME (dimethyl ether) is used as an LPG producers and consumers in the US, Europe, Africa,dramatically in 2010 with the United States ethanol Higher volumes of biofuels will be accompanied growth in our sales. substitute, particularly in bottled gas markets. In the Middle East and Asia.market responding to growing ethanol demand by more regulated markets. Each country and the petrochemical sector methanol derivatives areglobally, currency fluctuations and a historic level California itself, require not only individual quality used in everything from adhesives to paints and how we do itof sugar prices, by becoming a net exporter of specifications, but biofuels from specific feedstocks polyester to gasoline. We focus on building long term relationships ethanol. Vitol, through our global presence in the meeting specific carbon intensity requirements. based on our ability to provide security of supplyfuels markets and our ability to utilize our substantial This is an area where Vitol is able to accommodate In 2010, Vitol marketed over 2m tonnes of from multiple supply sources. Large trading flows terminal and shipping presence, actively participated and provide our customers with their specific Bio Us mandaTe for eThanol Methanol globally and has similar plans for 2011. – combined with comprehensive storage in key ConTriBUTion (gallons)in this dramatic market shift and we continue to look Fuel needs. locations and our status as one of the world’sfor opportunities as the markets continue to evolve. A major player in the methanol marketplace since largest charterers of shipping – mean we can meet Where we do it 1989, Vitol is a truly global trader and marketer practically any demand, anywhere, any time.2011 will see the implementation of the CaliforniaLow Carbon Fuel Standard (LCFS) which will placeincreasingly stringent targets for the carbon Vitol continues to actively participate in the growing world market for ethanol. In the U.S., now the worlds largest ethanol market, having surpassed long 15bn of methanol and has the logistics reach, strategic storage capacity, arbitrage expertise and flexibility to both break-bulk and serve the diverse needs of We also have the risk management tools and financial stability to put in place pre-financing intensity of transportation fuels used in the State of time leader, Brazil, Vitol maintains an important end users. arrangements and manage risk regardless California. The LCFS will require participants to find presence in the key markets of New York harbor, of market conditions.creative solutions to supply fuel in this important Chicago, Florida, Houston, San Francisco and Los 11bnmarket and Vitol is uniquely qualified to do this. The Angeles. Vitol maintains ethanol storage, supply and combination of the LCFS, combined with the current distribution in all of those markets and continues to 2006nationwide Renewable Fuel Standard, ensures look for opportunities to grow and add value. 4bn 2009 2015
36 VITOL ENERGY 3701 Vitol has chemicals storage facilities strategically situated 02 We have developed a strategic partnership with the in rotterdam, houston and Korea london-listed Chelyabinsk zinc plant, the largest smelter in russia 01 02CHEMICALS NON-FERROUS METALSWhat we do Where we do it What we doVitol is a major and growing supplier of bulk raw materials from Asia and the Middle East to, Europeanand US chemicals consumers. Vitol’s Chemicals team operates on a global basis across Europe, the Middle East, Asia, the Far East and the US. We have strategically situated storage in Euromin SA provides Vitol with trade expertise in the metals and mining sector. Euromin is a significant international trader, also trading in copper ores and concentrates, lead and silver ores and concentrates, high purity indium 40+ Countries ViTol sUpplies a ComprehensiVe Rotterdam, Houston and Korea, and we have a Trading through the Group’s wholly owned metal and cadmium metal. Euromin benefits from range of meTal prodUCTs (inClUdingWe deal directly with petrochemical producers and long term supply partnership in place with TPPI subsidiary Euromin SA, we are active in base metal the extensive network of Vitol Group offices around speCialisT) To CUsTomers inconsumers, receiving shipments into our worldwide (Trans-Pacific Petrochemical Indotama). concentrates, ores, secondary raw materials and the world. oVer 40 CoUnTries WorldWidelogistics facilities and using our reach and market residues as well as primary base metals and minorknowledge as a global energy trader to identify and how we do it metals. We trade around ten different metals – Euromin SA is an Associate Trader Member of theact upon arbitrage opportunities. We have an in depth understanding of world energy representing some 30 products – from ore to master LME (London Metal Exchange) and a member of markets and can react to changes in the chemicals alloys, from low value to high value, and from small the Galvanizers Association.Our business is focused on two main products: marketplace quickly and decisively. This knowledge volumes to major cargoes.• Benzene – used among other things in the and speed of response, combined with our ability Where we do it production of styrene, phenol and cyclohexane. to move physical product, means we are able to Euromin specialises in zinc, from ores through Our areas of operation include Europe, North• paraxylene – a main feedstock for the tolerate price fluctuations and better manage risk. to refined product, with the expertise to trade, America, Russia, Kazakhstan, Latin America, Mexico, manufacture of polyester. distribute and market zinc metal through various Africa, the Middle East and China. industrial sectors. We deliver zinc metal and a wide range of zinc alloys to the steel mills and galvanizing how we do it plants. Euromin also supplies metal to the chemical, Vitol’s status as a global energy trader gives Euromin die casting and metallurgical industries. We have access to new markets and allows the business developed a key strategic partnership with the to build on synergies generated within the Group. London-listed Chelyabinsk Zinc Plant, the largest Euromin has a broad spectrum of customers smelter in Russia. and an equally broad offer: the capability to take raw materials to smelters and smelted metals to end users – backed by the financial stability, risk management expertise and global reach of Vitol.
38 VITOL ENERGY 39CASE STUDYSECURING THE FUTUREOF A COAL MINEHillsborough Resources Ltd, a coal minein Vancouver, turned to Vitol to help themmeet their supply contracts. Vitol’s globalreach in the coal marketplace and ability tomarshal and coordinate logistics resource What we did: Vitol’s success in helping Hillsborough • itol has contracted all of Hillsborough’s V secure a long term future for the mine export coal for the next two years. has led, ultimately, to Vitol’s acquisitionhas delivered real and lasting benefits for • ll of Hillsborough’s production is shipped A by Vitol to a single, long term buyer – the Mexican State utility company. of Hillsborough in November 2009. A sign of real confidence.the mine. • itol helped Hillsborough finance their V ongoing commitment to us.
40 VITOL ENERGY 41 01 Vitol works with producers in Brazil, Central america, Thailand, 02 Vitol provides effective risk management solutions to a india and south africa wide variety of clients, including oil producers 01 02SUGAR RISK MANAGEMENT SOLUTIONSWhat we do how we do it raW sUgar ViTol What we do Where we do it TransporTs annUallYVitol is a significant participant in the world sugar Vitol is ideally placed to draw on our knowledge Risk is not something that can always be avoided. Our dedicated team manages risk across the globe. market, with a wealth of experience in the sector of both energy and sugar, at a time when ethanol Nor is it something that should always be avoided. We have a major presence in Europe and the US anddating back to 1992. Today we trade up to 5% of production is growing due to the mandated use of But it should be managed. And risk is where Vitol and are increasingly active on new projects in Asia and the world’s physically traded sugar in free market alternative fuels. our customers often find opportunity, and our skill Africa. The range of customers we serve is as varied OUR wORLDwIDEareas, adding value to trade flows from producers in 1.5m lies in managing the risk to optimise the opportunity. as the projects we cover: from governments, utility CUSTOMERS INCLUDE:the Western and Eastern hemispheres to markets We work with clients to help them to manage tonnes companies and airlines all over the world to coal oil prodUCersin North Africa, the Black and Baltic Seas and the inherent risks in one of the most volatile of We can meet practically any risk management producers in Indonesia, emission reduction clients refinersMiddle and Far East. Annually, we move 1.5m tonnes agricultural commodities. This could include challenge and we have the breadth of experience in China, power plants in the UK, oil producers in UTiliTY Companiesand trade 2.5m tonnes of raw sugar in bulk. We making sense of a market such as India, which to meet the specific needs of diverse customers Kazakhstan and Africa and refineries in Canada. TransporT Companies raW sUgar ViTolspot charter and time charter vessels ranging from alternates from being a major exporter to a Trades annUallY with individually tailored solutions. shipping fleeTs20,000 to 50,000 tonnes. significant importer, as well as how to access how we do it airlines opportunities that continue to develop in countries Our risk management skill has long been a Where we do it such as China. cornerstone of our business success. Today, that Vitol works with producers in Brazil, Central America, Thailand, India and South Africa, and end-users in We invest time in building long term relationships 2.5m expertise is available to our customers.North Africa and the Middle East, Russia and the with our customers, helping where necessary tonnesother former Soviet Republics, the Subcontinent, with finance initiatives and working together South East Asia and the Far East to source and place to anticipate and react to changing market their physical requirements. conditions.
42 VITOL ENERGY 43CASE STUDYPHYSICAL SUPPLY AND RISKMANAGEMENT FOR AN AIRLINEVitol provided a key airline customer with What we did: • e agreed a global risk portfolio and W hedge strategy to best meet the • itol also continues to advise and offer V solutions to help the airline manage the complex issues that arise from changing the tools it needed to maintain and improve airline’s needs. • sing Vitol’s risk management and trading U teams, a best fit solution was developed carbon emission legislation and their requirements for carbon credits, that help meet both legislative requirements its competitive position. to manage their price exposure. • n partnership with Vitol Aviation’s I expanding physical into plane supply and their corporate targets. • n Europe, Vitol Aviation is developing a I carbon neutral, physical, into plane business, opportunities were also supply offer for this customer. developed to link fixed price solutions with the physical supply, when this was As a direct result of our relationship with aligned with the airline’s risk this airline customer, they have reduced management strategy. their exposure to oil market price volatility, • itol continues to work with this V improved their physical into wing pricing customer to ensure that the risk and their relative competitive position, and management solution remains fit for are now developing, in partnership with purpose and competitive. Vitol Aviation, a Carbon Neutral position to meet their immediate and future legislative requirements.
44 VITOL ENERGY 45TERMINALS, REFINING VTTI represents far more than simply a rapidly expanding storage resource. It is matrix of fully integrated servicesAND SHIPPING delivering coordinated solutions from our terminals facilities, shipping operations and refining interests. In 2010 MISC Berhad of Malaysia acquired 50% of the shares in VTTI, with the other 50% owned by the Vitol Group. We have a presence in many key trading To be a world class player means working centres around the world and an to world class standards – a fact reflected investment strategy that will see us more in our commitment to the highest safety than double our storage capacity within and environmental standards, the the next three years. The Vitol Group constant pursuit of smarter, more owns and charters a fleet of modern efficient engineering solutions and vessels with a truly global reach and transparent working relationships with we own, operate or have interests in local and state authorities, governments refineries on three continents. and pressure groups. And the feedback and interaction that we get from our largest customer, the Vitol trading team, is just one of the ways by which we are constantly seeking to improve.
46 VITOL ENERGY 4701 euro Tank amsterdam site on the Benzolweg 02 euro Tank amsterdam has a total storage capacity of 1,394,000m3, consisting of over 244 tanks 02TERMINALS 01What we do Terminals located in: Our Vitol Group expertise and experience VTTI’s mission is to serve the worldwide energy ETT, Rotterdam, The Netherlands encompasses upstream, trading, utilities, shipping industry by linking oil and gas flows safely, efficiently ETA, Amsterdam, The Netherlands and terminals, and so we are able to coordinate andand profitably. Today, VTTI is active in 11 countries ATPC, Antwerp, Belgium direct resources, maximise efficiencies, shorten around the world and offers a combined capacity VNT, Ventspils, Latvia turnaround times and reduce costs.of around 6m m3. This capacity is set to increase to BNK, Kaliningrad, Russiaaround 8m m3 by 2013. FRCL, Fujairah, United Arab Emirates Above all, we deliver safe, intelligent, flexible solutions VTT Port Qasim, Karachi, Pakistan – often born of local knowledge and expertise. From Our strength derives from our knowledge and Vitco, Zarate, Argentina the vibrant Russian export market; to the hub of understanding of the energy sector. We know what Seaport Canaveral, Canaveral, USA Europe’s oil industry; to the entry and exit point of the our customers require of a storage facility because Navgas, Lagos, Nigeria Persian Gulf; to the access point for Latin America’sof the interaction with one of our key customers, growing internal market – VTTI is adding lasting and the Vitol trading team – hence our focus on the Projects under development: measurable value – safely and reliably. flexibility, loading capabilities and infrastructure ATT Tanjung Bin, Malaysianeeded to maximise trading opportunities, leverage ETT3, Rotterdam, The Netherlandseconomies of scale and make swift and decisive VTTI Kenya Ltd, Mombasause of market insights. ROTAN Pipeline, The Netherlands Vassiliko, CyprusWhere we do itVTTI is an integral part of a bigger picture that might how we do itsee, for example, Vitol oil from Russia flow through Our holistic view of the energy sector allows us Vitol pipelines to a Vitol ship destined for a VTTIterminal in Amsterdam. to accurately bridge the gap between asset people, who take a long term view, and traders, who 6m m3 CUrrenT VTTi ComBined CapaCiTY have to make instant decisions. We never cut In building a global network, we have pursued corners, always look to protect our assets and thea policy of investing in oil and gas terminals and associated pipelines at the major import/export locations – or trans-shipment points – around environments and communities in which they’re located, and actively seek out those customers whose business synergies stand to deliver the 8m m3 ComBined CapaCiTY of VTTi BY 2013the world. greatest mutual commercial benefit.
48 VITOL ENERGY 49CASE STUDYA MAJOR NEW TERMINALFOR FLORIDAVTTI has commissioned and constructed VTTI’s Seaport Canaveral terminal is: • Providing security of supply. This exciting new venture will make a major difference to the local economy and has the first major new terminal to be built in • etting new standards in efficiency S turned what was once an area of unused and Health & Safety. marshland into a world-class terminal that • ringing new sources of energy, B promises to be of real significance to Florida for many years. This 450,000m3 at scale, to American markets. American markets and consumers. • reating competition. C • upplying fuel to the cruise ship Sfacility, built and staffed by local employees, industry at Canaveral.is driving down the cost of energy throughcargo-sized deliveries of gasoline, diesel,jet, kerosene, naphtha and fuel oil,delivering economies of scale.
50 VITOL ENERGY 51REFININGWhat we do unused refining capacity to try and benefit from and Vitol Refining SA. Vitol provides NARL with The refinery had been mothballed since 2003 and The futureVitol has been involved in refining since it was positive refining margins. Our global access to crude comprehensive working capital, financing of following maintenance it is now able to operate at Vitol continues to look for opportunities to work withestablished in 1966, both through direct ownership and feedstock may provide attractive crude input feedstock and finished products, including Letters up to 80,000 barrels per day. There is still additional crude oil producers to access our owned refinery and indirectly through processing agreements. options, and the products produced can be made of Credit, in-transit and in-storage inventory and land to expand and further investment opportunities system and with other refiners to optimise their available to our product trading teams. The refinery trade credit. Additionally, Vitol provides feedstock are being considered. Since the purchase, significant investment by accessing the best possible crude Vitol’s growing refining presence is focused on profits from the processing fee and the ability to lock procurement and shipping, finished product additional investment has been made, with now over oil and feedstock alternatives, getting best values three specific areas: in a refining margin for that part of its capacity that is marketing and shipping, price risk management, 1m m3 of product storage in place. on products and leveraging our access to the best • Owned and Operated: Vitol currently owns and leased to Vitol. administrative and back office services. possible financial terms. operates over 100 kbd of refining assets closely In January 2010, Vitol completed the acquisition linked with our tankage facilities, in Fujairah further detail The agreement with Harvest also requires that Vitol of the refining assets in Antwerp that previously and Antwerp. As more detailed background to Vitol’s refining purchase and lift all refined products produced by belonged to Petrolpus Holding AG. The facilities are • Crude Supply Agreements, Products Offtake activity, the company’s first actual ownership and NARL, except for certain excluded refined products located in the Port of Antwerp and are connected and Stock Financing: We continue to be closely operation of a refinery came when it acquired what to be marketed by NARL in the local Newfoundland to an extensive pipeline network and harbour involved with North Atlantic Refining Company was then known as the Come By Chance refinery market. Also, the agreement provides that the infrastructure providing flexibility for hydrocarbon (NARL), the refinery in Canada that Vitol purchased in Newfoundland in 1994. This was subsequently ownership of substantially all feedstock and refined feedstock, intermediates and finished products. in 1994. We purchase all of the crude oil required renamed “the North Atlantic Refining Company product inventory at the refinery be retained by The Facilities have one of the largest bitumen by the refinery ( around 115 kbd), we purchase all of (NARL). Owning and operating this refinery for 13 Vitol and that during the term of the agreement, processing plants in the Benelux region with a the products except those required for local retail, years with an excellent operating performance Vitol is required to provide feedstock for delivery to capacity of approximately 875,000 tonnes per and we finance the refinery operation. In the US, provided the experience that underpinned the refinery as well as the obligation to purchase all annum and a tank storage facility with a potential 80,000 we have a similar supply/offtake arrangement with Vitol’s subsequent broader expansion into the refined export products produced by the refinery. capacity of approximately 450,000 cubic metres Coffeyville Resources Refining and Marketing for refining sector. after additional investment. about 80 kbd. Our global energy trading presence, Vitol’s refinery expansion continued with the combined with our strong balance sheet, allow us to In October 2006 Harvest Energy acquired NARL acquisition of a 90% stake in the Fujairah Refinery tailor specific agreements that can provide benefits from Vitol. However a condition linked to the sale Company Limited ( FRCL) in 2007 with refining and The fUJairah refinerY is noW aBle to all our refining counterparties. was a continuing crude oil supply and refined storage assets in the Emirate of Fujairah (UAE), on To refine 80,000 Barrels per• Processing Agreements: These allow Vitol to lease product offtake agreement between Harvest the Indian Ocean, south of the Straits of Hormuz. daY aT maximUm CapaCiTY
52 VITOL ENERGY 5301 m.V, fraTerniTY01 SHIPPING What we do how we do it We are physical traders and we move energy from Shipping markets are highly volatile and nowhere internal cargoes, contracts of affreightment and markets that are in surplus to markets that are in are the principles of supply and demand more derivatives. deficit, across borders and oceans. We move it relevant. Through close contact with our competitively and efficiently, fully conscious of our trading groups and utilization of our own market The portfolio of cargoes and shipping activity is responsibility to manage all our operations safely intelligence, Vitol has the best possible opportunity extensive and includes crude oil, oil products, and with due care for the environment. to anticipate worldwide freight movements. chemicals, dry cargo, such as coal and sugar, LPG and LNG. We are expanding our activities in the A world class shipping operation is an essential part of Within Vitol, the shipping team is not only a service dry cargo market where, as with every other Vitol the management of our supply chain, underpinned by provider, transporting commodities in the safest, business, market intelligence is key to our success. the depth of operational experience that exists across most efficient and cost effective way possible but is the shipping team. a competitive business in its own right. Vitol is the largest independent charterer of product tankers in the world, shipping nearly 400m Where we do it Commercial and operational control of shipping tones of crude oil and products in 2010. At any We have commercial and operational offices in five of allows the trading groups to provide ultimate one time there are over 200 tankers on the water the world’s most strategic shipping locations: London, flexibility to their customers as well as offering performing voyages for Vitol in either a short term Singapore, Houston, Geneva and Bermuda giving us a risk management solutions for the groups’ freight (spot market charter) or long term capacity. In 2010 leading strategic and logistical edge in a global market exposure. we completed almost 5,300 voyages, compared to where time zones blend into one. 5,100 in 2010. Vitol contracts vessels that are underpinned 5,291 by the core cargo flows of the trading groups, Nowhere are the core skills that underpin all of however, these contracts need to be commercially Vitol’s activity more prevalent than in our shipping VoYages in 2010 viable in their own right. Contracts will vary in business: a combination of global reach and terms of structure and period from a few weeks local understanding, leadership and partnership, to many years. The aim of the shipping group is to speed and flexibility results in a highly efficient and maximize the utilisation and thereby the returns, successful business. from these assets under our commercial control. Shipping profitability is maximized and exposure is itself managed using a range of third party and
54 VITOL ENERGY 55 UPSTREAM The strategic and operational advantages that apply to the Vitol Group as a whole – speed, flexibility, local understanding – are nowhere more relevant and mutually beneficial than in our upstream operations. The upstream business is at the core of We have the global reach, financial scale the oil and gas industry using technical and synergies with shipping, trading and and commercial expertise to explore terminals to identify and act on new for, develop and produce hydrocarbon opportunities wherever and whenever resources both onshore and offshore they occur. We also have the swiftness and often in challenging locations of thought and decisiveness of action to and conditions. bring new projects to life in months rather than years.
56 VITOL ENERGY 5701 Drilling operations at Arawak’s Akzhar field in Kazakhstan. arawak energy is a growing e&p company operating in russia, Kazakhstan and azerbaijan 01 asseT loCaTions WorldWide GHANA: RUSSIA: RUSSIA Offshore Cape Three Points north irael Offshore Cape Three Points South sotchemyu-Talyu south sotchemyu CONGO BRAzzAVILLE: prichalny Block xi east Kamensky Block xiV north Zeleneborsk KAzAKHSTAN ledovy licence 67 south Kadzherom AzERBAIjAN NIGERIA: oml 113 KAzAKHSTAN: CAMEROON: akzhar etinde permit Besbolek NIGERIA saigak pHILIppINES Karataikyz GHANA CAMEROON pHILIppINES: Galoc field alimbai CONGO Tamdykol Octon field AzERBAIjAN: northern Block Central Block Coastal Block UPSTREAM production, development and exploration development and exploration What we do Where we do it how we do it Our geoscientists and engineers work together Our upstream operations are split into two Our technical teams are paramount to our success. with the commercial teams to identify areas and dedicated teams. Inside the FSU, Vitol’s interests are Their interpretation and analysis of the geological assets considered highly prospective. We take represented by our wholly owned subsidiary Arawak and geophysical data lay the foundations for managed risks with maximum diligence and our Energy, which has built a portfolio of 17 assets exploration and development decisions. Our short command chain enables us to react to balanced between production, development and engineering and operations teams convert those opportunities as soon as they arise. exploration in Kazakhstan, Russia and Azerbaijan. decisions into actions, employing rigorous planning and precise execution to drilling programmes, Vitol’s upstream strategy encompasses organic Outside the FSU, Vitol E&P holds exploration and development schemes or ongoing management growth through exploration in parallel with highly producing assets in the Philippines and a portfolio of production and reservoirs. opportunistic acquisitions of new ventures, but of development and exploration properties in West always with a clear focus on projects that allow us Africa – Ghana, Nigeria, Cameroon and Congo. We continuously assess risk whether technical or to build from our core areas. We couple this with an commercial, and have an unfailing focus on health, active global network, identifying and realising the As at 31 December 2010, Vitol had equity safety and environmental issues. potential of undervalued assets worldwide. production of 18,000 barrels of oil per day. We have the operational, financial and logistics We also seek out upstream assets where Vitol credibility to build successful local partnerships all would be well positioned to become an offtaker, over the world, and our ability to cement strong, securing the commercialisation of the resources and providing additional volumes to our trading business. 185m boe proVed plUs proBaBle reserVes transparent relationships with people on the ground makes us a valued long term partner. Beyond this, we may act as a facilitator in multipartner transactions, our 360º capabilities enabling us to find connections, bridge gaps and deliver innovative financial solutions where 18,000 Barrels of oil per daY of others cannot. eQUiTY prodUCTion
58 VITOL ENERGY 59CASE STUDYMARKETING A NEW CRUDE OILVitol was approached by a small producer Vitol worked with their equity owners to: • Carry out and analyse the results of an The results are better netbacks for the producer and Vitol manages the on-going in Africa. They had discovered a new crude assay test in an independent laboratory. marketing of the new grade. • Establish a value for the new crude grade, benchmarked against global oil field, but lacked the resources and global marker crudes. • un a test cargo in refineries to prove R the logistics and the value.trading knowledge to realise the best return • gree a long term contract with the A producer for crude oil sales.for their production.
60 VITOL56 ENERGYNETwORK LOCATIONSWorldWide offiCes afriCa California singapore latvia norTh ameriCa Vitol aviation Company Vitol asia pte ltd. Ventspils nafta Terminal ltd.eUrope ghana 300 Continental Blvd. #315 Vitol singapore pte ltd. 75 Talsu Street, Ventspils florida Accra representative Office El Segundo, California CA 90245 260 Orchard Road LV-3602, Latvia seaport Canaveral llCnetherlands African Industries Building United States of America The Heeren #13-01 Tel (37 1) 6366 4090 555 Hwy 401Vitol holding B.V. Valco Road Tel (1 310) 416 9180 Singapore 238855 Fax (37 1) 636 24341 Cape Canaveral, FL 32920Vitol B.V. Heavy Industrial Area Fax (1 310) 416 9185 Tel (65) 6737 9922 United States of AmericaVitol s.a. rotterdam Branch PMB Community 1 Fax (65) 6737 0917 Cyprus Tel (1 321) 783 4890anker Coal Company B.V. Tema, Ghana Canada Tlx 33473 Vassiliko representative Office Fax (1 321) 783 4892petroned B.V. Tel (233 22) 21 6912 Vitol B.V. 6 Kondylaki Street, 1090 Lefkosiaanchor insurance B.V. Fax (233 22) 21 6913 Bankers Hall oman Trading international ltd. P.O. Box 24676, 1302 Lefkosia houstonVitol aviation B.V. Hollinsworth Building Singapore representative Office Cyprus Coastal Caverns, inc.K.P. van der Mandelelaan 130 nigeria Suite 600, 301 8th Avenue 260 Orchard Road #12-02/03 Tel (357 22) 818 884 1100 Louisiana Street3062 MB Rotterdam hyson (nigeria) ltd. S.W. Calgary, Alberta T2P 1C5 The Heeren, Singapore 238855 Fax (357 22) 873 634 Suite 5500P.O. Box 1546 West Wing, 3rd Floor Canada Tel (65) 6735 1937 Houston, TX 77002-52553000 BM Rotterdam SAPETRO Towers Tel (1 403) 313 9003 Tel (65) 6735 1921 afriCa United States of AmericaNetherlands Plot 98, 7 Adeola Odeku Street Fax (1 403) 313 9004 Tel (1 713) 230 1000Tel (31 10) 498 7200 Victoria Island middle easT Kenya Fax (1 713) 230 1111Fax (31 10) 452 9545 Lagos, Nigeria soUTh ameriCa VTTi Kenya ltd. Tel (234 1) 461 0765 Bahrain Maraket House oklahomaVTTi B.V. Fax (234 1) 461 0768/69 argentina Vitol Bahrain e.C. Elgeyo Marakwet (North) Road Blueknight energy partners, l.p.K.P. van der Mandelelaan 130 Vitol argentina s.a. National Bank of Bahrain Tower off Argwings Kodhek Road 6120 South Yale Ave,3062 MB Rotterdam hyson (nigeria) ltd. Alicia Moreau de Justo 140 18th floor (181), Building 113 P O Box 363 -00606 Suite 500, Tulsa, OK 74136P.O. Box 1546 4th Floor, Ceddi Plaza 1st floor Government Avenue Kilimani, Nairobi, Kenya Phone: (1 918) 237 40323000 BM Rotterdam Plot 264, Tafawa Balewa Way Puerto Madero, C1107 AAD Manama Town 316, Bahrain Tel: (254 20) 2384232Netherlands Central Business District Buenos Aires, Argentina Tel (973) 17 218855 Fax: (24 20) 2384233 soUTh ameriCaTel (31 10) 498 7351 Abuja, Nigeria Tel (54 11) 6325 0000 Fax (973) 17 224793Fax (31 10) 453 1663 Tel (234 9) 461 8118 Fax (54 11) 6325 0099 nigeria argentina Fax (234 9) 461 8119 dubai navgas ltd. Vitco s.a.switzerland Brazil Vitol dubai ltd. 23 Creek Road, Apapa Camino Costa BravaVitol holding sarl morocco Vitol do Brasil ltda. Level 5, Precinct Building 2 Lagos, Nigeria Parque Industrial ZàrateVitol s.a. Casablanca representative Vitol do Brasil maritima Dubai International Financial Tel (234 80) 6236 8192 B2800DCA ZàrateVitol Central asia s.a. Office Vitol do Brasil distribuidora ltda. Centre (DIFC) Buenos Aires, ArgentinaVitol refining S.A. Twin Center, Tour Ouest, 16ème Praia do Flamengo, 154-9th Floor P.O. Box No. 506514, Dubai asia Tel (54 3487) 423 382euromin s.a. étage CJ. 901, Rio de Janeiro United Arab EmiratesBoulevard du Pont d’Arve 28 Angle Bvds Zerktouni et Al RJ 22210-906, Brazil Tel (971 4) 428 1800 pakistan UpsTreamCH 1205 Geneva Massira Tel (55 21) 3235 8200 Fax (971 4) 363 7467 VTT port QasimP.O. Box 384, 1211 Geneva 4 20100 Casablanca, Morocco Fax (55 21) 3235 8209 North Western Zone norTh ameriCaSwitzerland Tel (212 522) 958247 oman Trading intl. Karachi 75020, Pakistan Tel (41 22) 322 1111 Fax (212 522) 958023 peru Level 5, Precinct Building 2 Phone (92 21) 4720 500 CanadaFax (41 22) 781 6611 euromin peru s.a.C. Dubai International Financial Fax (92 21) 4730 136 hillsborough resources ltd. Cape Town Lima Office Centre (DIFC) The Marine Building, Suite 1100 anchor insurance s.a. Cape Town representative Office Miguel Dasso 230 - office 702 P.O. Box No. 506515, Dubai singapore 355 Burrard Street, VancouverRoute des Acacias 54 Hudson Building, 1st floor Lima, Peru United Arab Emirates aTT Tanjung Bin sdn Bhd NC V6C 2G81227 Geneva-Carouge 28 Hudson Street Tel (511 4) 213 773 / 223 407 Tel (971 4) 428 1888 260 Orchard Road Tel: (1 604) 684 9288Switzerland Cape Town Fax (511 4) 217 206 Fax (971 4) 363 7468 The Heeren #13-01 Fax (1 604) 684 3178Tel (41 22) 300 0435 8001 Singapore 238855Fax (41 22) 827 6125 South Africa asia rUssia Tel (65 6737) 9922 afriCa Tel (27 21) 4010500 Fax (65 6737) 0917United Kingdom Fax (27 21) 401 0501 China Moscow representative Office ghanaVitol Broking ltd. Beijing representative Office 12 Tverskaya Street horizon singapore Terminals Vitol Upstream ghana ltd.Vitol services ltd. norTh ameriCa Room 912-913 Building 1, Floor 5 (pte) ltd. 21 Aviation RoadBelgrave House Hua Bin International Building 125009 Moscow, Russia 11 Meranti Crescent Airport Residential Area76 Buckingham Palace Road houston No. 8 Yong An Dong Li Tel (7 495) 956 2739/42 Jurong Island Banyan LogisPark PO Box KIA 30414London SW1W 9TQ Vitol inc. Jian Guo Men Wai Avenue Fax (7 495) 956 2741 Singapore 627 806 Accra, GhanaUnited Kingdom 1100 Louisiana Street Chaoyang District Tel (65) 6303 8200 Tel (233 302) 78 1124/5Tel (44 20) 7973 4200 Suite 5500 Beijing 100022 Terminals Fax (65) 6303 8234 Fax (233 302) 78 1126Fax (44 20) 7824 8239 Houston, TX 77002-5255 People’s Republic of China United States of America Tel (86 10) 8528 9033 eUrope middle easT nigeriaeuromin s.a. london Branch Tel (1 713) 230 1000 Fax (86 10) 8528 9108 Vitol exploration nigeria ltd.Tel (44 20) 7917 8960 Fax (1 713) 230 1111 netherlands fujairah 10th Floor, St Nicholas HouseFax (44 20) 7917 8961 india euro Tank amsterdam B.V. Fujairah refinery Company Ltd. Catholic Mission StreetTlx 423421 Bermuda Mumbai representative Office Jan van Riebeeckhavenweg 9 P.O. Box 1592, Fujairah, UAE Lagos, Nigeria Vitol energy (Bermuda) ltd. Dynasty Business Park 1041 AD Amsterdam Tel (9 719) 228 1188 Tel (234 1) 461 0460latvia Vitol refining S.A. Bermuda A – Wing, Office No 502 Harbour no: 2134 Fax (9 719) 222 8344 Fax (234 1) 461 0464 riga representative Office Branch Andheri Kurla Road NetherlandsVaļņu Street 3, Riga Calson (Bermuda) ltd. J.B. Nagar, Andheri - East Tel (31 20) 587 2121 rUssia asiaLV – 1050, Latvia Sutherland Place Mumbai 400 059, India Fax (31 20) 611 9768Tel (371) 6771 5975 10/12 Burnaby Street Tel (91 22) 6725 5371/74 CJsC Baltiyskaya singapore Hamilton HM 11, Bermuda Fax (91 22) 6725 5370 euro Tank Terminal B.V. nefteprevalochnaya galoc productionlithuania Tel (441) 295 1408 Moezelweg 151 Kompaniya (Zao “BnK”) Company WWlMazeikiai representative Office Fax (441) 295 1406 Kazakhstan 3198 LS Europoort-Rt Oil Terminal 260 Orchard RoadDauksos 34-18, LT - 89128 Almaty representative Office Harbourno: 5610 18 Sadovaya Street The Heeren #13-01Mazeikiai, Lithuania anchor insurance group 13 Al-Farabi P.O. Box 1000 238520 Baltiysk Singapore 238855Tel (370 443) 20440/41 rembrandt insurance Nurly Tau 2 “V”, 6th Floor, 601 3180 AA Rozenburg Kaliningrad Region, Russia Tel (65) 6248 5360Fax (370 443) 20442 Company ltd. Almaty 050059, Kazakhstan Netherlands Tel (7 40145) 20267 Fax (65) 6248 5370 25 Church Street Tel (7 727) 311 1099 Tel (31 181) 240024 Fax (7 40145) 20267Ukraine P.O. Box HM 824 Fax (7 727) 311 1109 Fax (31 181) 240010 United Kingdomukraine representative Office Hamilton HM BX, Bermuda arawak energy UK ltd.Bogdana. Khmelnitskogo str, 48 Tel (441) 295 9911 Belgium Belgrave House6th Floor, Kiev, 01030 Ukraine Fax (441) 292 1702 aTpC (antwerp Terminal & 76 Buckingham Palace RoadTel (380) 44538 1513 processing Company) London SW1W 9TQFax (380) 44538 1514 Beliweg 20, Haven 279 United Kingdom 2030 Antwerpen, Belgium Tel (44 20) 7973 4285 Tel (32 3) 303 1600 Fax (44 20) 7824 8466 Fax (32 3) 303 1660
rIGa, LaTVIa maZeIKIaI, LITHuanIa aLmaTY, KaZaKHSTan KaLInInGraD, ruSSIa DuBaI, uae amSTerDam, neTHerLanDS LonDon, unITeD KInGDom fuJaIraH, uae roTTerDam, neTHerLanDS KaracHI, paKISTanVancouVer, canaDacaLGarY, canaDa GeneVa, SWITZerLanD BeIJInG, cHIna moScoW, ruSSIa caSaBLanca, morocco KIeV, uKraIne mumBaI, InDIa VaSSILIKo, cYpruSeL SeGunDo, uSaTuLSa, uSa aBuJa, nIGerIa SInGapore LaGoS, nIGerIaHouSTon, uSa Tema, GHanacape canaVeraL, uSaHamILTon, BermuDa BaHraInLIma, peru naIroBI, KenYarIo De JaneIro, BraZIL cape ToWn, SouTH afrIcaBuenoS aIreS, arGenTIna