ENERGY - Vitol

ENERGY
>
MEETING THE ENERGY NEEDS OF A RAPIDLY CHANGING WORLD
VITOL 01
CONTENTS
VITOL
TRADING
TERMINALS, REFINING & SHIPPING
02
04
06
08
10
12
14
16
18
19
20
42 Introduction
44 Terminals
46 Case study
Welcome
A physical trader
Global reach
Local understanding
Speed & flexibility
Partnership
People, systems & liquidity
Introduction
Crude Oil
Natural Gas
Case study
> ADDING VALUE TO
USA REFINERIES
22 LPG
23 LNG
24 Case study
> DOUBLING LPG SUPPLY
TO NIGERIA
26
27
28
29
30
31
32
Naphtha
Gasoline
Gas Oil & Jet
Fuel Oil
Coal
Power
Case study
> THE FUTURE OF COAL TRADING
IN SOUTHERN AFRICA
34 Carbon
35 Ethanol
36 Case study
> UTILITY ENERGY SUPPLY
38
39
40
41
Methanol
Chemicals
Metals and Minerals
Sugar
> SETTING A NEW BENCHMARK FOR
INDEPENDENT TERMINALS
48 Refining
50 Case study
> A HIGHLY FLEXIBLE REFINING ASSET
JUST SOUTH OF THE STRAITS
OF HORMUZ
52 Shipping
MARKETING
54 Introduction
56 Vitol Aviation
58 Case study
> VITOL AVIATION ARRIVES
AT LONDON HEATHROW
60 Vitol Germany
62 Vivo Energy
64 Varo Energy
UPSTREAM
66 Introduction
68 Upstream
70 Case study
> VITOL POWERS THE
INDUSTRIALIZATION OF GHANA
VITOL FOUNDATION
72 Introduction
74 The Vitol Foundation
NETWORK LOCATIONS
76 Network Locations
GROUP PERFORMACE
300
250
200
150
100
50
2005
2006
2007
2008
2009
1500
300
1250
250
1000
200
2010
2011
0
2012
125
35
30
100
25
75
750
150
500
100
20
15
50
10
250
2008
2009
2010
2011
2012
0
25
50
2008
2009
2010
2011
2012
0
5
2008
2009
2010
2011
2012
0
2008
2009
2010
2011
2012
0
120
350
300
100
250
80
200
60
150
40
100
20
50
2004
2005
2006
2007
2008
2009
2010
Crude Oil
92
Gasoline & Naphtha
59
Gas Oil & Jet
51
Fuel Oil
24
Natural Gas
42
LPG
7
Other trading
28
TOTAL
303
2011
2012
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
TCO2
EFFICIENCY
E&P
69,689
0.0279
tC02e/bbl
Coal
101,539
0.2353
tC02e/te coal
Terminals*
96,450
0.0037
tC02e/m3
Blue Knight
24,404
0.0078
tC02e/m3
Travel
3,069
n/a
n/a
Offices
1,087
0.0095
tC02e/ft2
TOTAL
296,238
0
02 VITOL
A WARM WELCOME
The Vitol Group exists to help meet the energy needs of a
rapidly changing world.
One of the world’s largest independent energy trading
companies, we find, extract, refine, trade, store and transport
materials and resources from where supply is abundant to
where demand is great. We forge connections; we trade
physical commodities; we help make things happen and
markets work.
There, any apparent similarities with other oil and gas
conglomerates end.
We do things differently, and the difference lies less in what
we do than how we do it. This brochure is designed to take
you inside the world of Vitol and show you how our 360°
expertise and unique culture combine to make us one of
the energy sector’s business partners of choice.
VITOL
Our trading is, first and foremost, physical.
We charter tankers and move crude oil and
oil products. Products such as gasoline,
diesel and heating oil, fuel oil, jet fuel,
naphtha and metals, as well as ethanol and
chemicals: all over the world, every day.
And we pipe gas, fill and operate terminals,
ship coal and biofuels.
Founded in 1966 with the focused aim of
trading crude oil and oil products, Vitol is an
independent group of companies, staffed
by energy professionals with a true depth
of experience in the business of oil
transportation, market intelligence,
refining, distribution, marketing, trading
and finance.
The breadth and reach of our global
network gives us a profound
understanding of the intricate
interdependencies of the world’s energy
markets. Our status as a private company
and non-hierarchical partnership structure
gives us a unique ability to act swiftly,
innovatively and decisively.
All our shareholders are current
employees, and this fosters a true spirit of
partnership internally: every facet of the
business and its well-being is of
fundamental importance to us all. We
attract talented entrepreneurs who
respond to the exciting opportunities that
an independent company gives them.
We’re resourceful and adept at
understanding and managing risk. We trust
our people, and give them considerable
responsibility. We make decisions quickly,
with short chains of command.
We are, by any standards, a major
participant in world energy trading.
In 2012 we shipped 261m tonnes of crude
oil and oil products and we had revenues
of $303 bn. We also couple physical
resources with in-depth expertise in
managing our own financial risk.
This solid platform allows us to build
long-standing partnerships with our
customers, who look to and rely upon Vitol
for nimble thinking, creative solutions - and
an unwavering commitment to reliability.
04 VITOL
A PHYSICAL TRADER
Ours is primarily a physical distribution
business and one that operates on a truly
global scale. We identify imbalances
between supply and demand and we act
quickly and safely to restore the equilibrium.
We move energy from where it is sourced
and stored to where it is needed.
We are not speculators on absolute price
movements. Nor do we expose ourselves
or our customers to unnecessary risks.
Rather, we use our worldwide reach, local
understanding and experience to
anticipate change, marshal resources and
deliver innovative, effective and reliable
logistics solutions.
Our principal responsibility is to our
customers; we are able to think fast and act
decisively. Vitol is a broadly based group of
complementary businesses and we have
the systems, people and flexibility to make
intelligent connections, optimise
economies of scale and create external
partnerships every bit as enduring and
open as their internal counterparts.
117m
TONNES OF CRUDE OIL SALES IN 2012
5m+
OVER 5M BARRELS OF CRUDE OIL AND
PRODUCTS TRADED EVERY DAY BY VITOL
VITOL
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 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.
06 VITOL
GLOBAL REACH
Vitol’s global reach means we have a
presence and local expertise wherever in the
world energy is sourced, stored, transported,
traded or needed. The size and diversity of
our complementary worldwide interests
means that we truly understand the markets
in which we operate and we understand the
relationships between them.
There’s more to running an international
network than simply having offices around
the world. We forge partnerships with local
businesses and hire the best people to help
us work with, not against, the prevailing
business culture. Indeed, we are often told
by customers that we’ve won a contract
because we’ve clearly tried harder to gain
an understanding of how local practices,
regulations and cultural differences
characterise their local markets.
As one of the world’s largest oil and gas
traders, we understand the nature of the
relationship between energy demand and
fuel supply. Our information systems
enable us to see opportunities across
oceans and geo-political boundaries, and
we have the shipping and storage
resources to rapidly adapt to changing
circumstances and consistently try to
make the right trades at the right time.
7
REGIONAL CENTRES
30+
ADDITIONAL OFFICES WORLDWIDE
3,316
EMPLOYEES IN TRADING & UPSTREAM, VTTI
AND ARAWAK WITHIN THE VITOL GROUP
VITOL
There’s more to global reach than having a presence all over the world. Global reach is
the ability to see the bigger picture, gain local insights and anticipate how changes in
demand in one part of the world will affect supply to another.
A particularly cold winter in Asia means that demand for kerosene – jet fuel – escalates
as people turn to it for domestic heating. Because we know when, where and how this
happens, we’re able to source, trade and deliver alternative supplies of jet fuel for the US
and European markets which otherwise would have been supplied from Asia.
08 VITOL
LOCAL UNDERSTANDING
We pride ourselves on our commitment to
embracing the nuances, dynamics and
unique sensitivities of local markets. Vitol is a
partnership, and one that looks to form
external partnerships based on fair and
mutually agreed objectives wherever in the
world we are doing business.
We listen and we learn.
We employ the best local people and
use their expertise and experience to
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 in
a distant Head Office. Rather, we form
partnerships born of common interest
and long term sustainability.
350
CARBON PROJECTS WORLDWIDE
VITOL
Ghana’s offshore fishermen told us that our seismic surveying ship was a problem for
them, particularly at night, when their small wooden boats were effectively undetectable
by Vitol’s 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
SPEED & FLEXIBILITY
Energy markets are volatile. They change
with the political climate, with shifts in supply
and demand, and with currency
fluctuations. They change with the weather,
with elections, with technological
breakthroughs and with economic
breakdowns. We anticipate and we act fast.
Our strength lies in being able to anticipate
and react to change faster and more
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
by a unique, comprehensive and balanced
portfolio of energy sector interests.
5,495
SHIP VOYAGES IN 2012
200+
SHIPS ON THE SEA AT ANY ONE TIME
VITOL
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.
12 VITOL
PARTNERSHIP
Vitol is a very different kind of business.
It is a privately owned company and one
in which the focus is always, without
exception, on our customers. And when
we say customers we mean partners.
Our partnership model is at the heart of the
way we do business and gives us a very real
advantage when compared with
competitors who are required to consider
the needs of external shareholders as well
as customers.
Vitol is owned by its employees. There are
no external shareholders. That means that
every business decision has the potential
to affect – positively or negatively – every
employee. Vitol people have a very real
interest in seeing success across every part
of the business.
This is a confederation of entrepreneurs
in which everyone works together for the
greater good of both the business and
our customers.
The partnership model is not confined to
inward-facing expressions. Far from it.
Our customers are partners, too, and our
relationships with them are born of
equality, mutual respect and the desire
to build and sustain lasting value for
both parties.
1,025
EMPLOYEES IN OUR GLOBAL
TRADING BUSINESS
VITOL
With just days to spare, Vitol sourced, shipped and delivered jet fuel, gasoline and diesel
to meet the needs of a nation. When the incumbent fuel supplier to Guinea-Conakry
proved unable to deliver, Vitol stepped in at the last minute and helped the country avoid
the very real possibility of a stock out. Our strong position in NW Europe, combined with
our substantial in-tank reserves, financial liquidity and ability to ship product at a day’s
notice, meant that we were able to coordinate our resources and react immediately.
14 VITOL
PEOPLE, SYSTEMS & LIQUIDITY
Vitol’s unique combination of talent,
technology and resource management
gives us the ability to turn ideas into reality
– quickly and securely. We see opportunities
and we have the human, information
technology and financial resources to make
the most of them.
Vitol people stay with Vitol. We aim to hire
the best people in the marketplace and we
make sure that they share our professional
values. We hire on merit and experience,
not just potential, while our partnership
structure fosters a culture of conservative
management of our risk.
Our people have the best information at
their fingertips, thanks to our proprietary
‘Vista’ system. Unequalled in the industry,
the system – designed by Vitol for Vitol –
allows users to view the progress of each
transaction from all angles, connecting
everyone involved to a ‘big picture’ of real
time data.
We have the right people and the right
information. Finance is the facilitator that
allows us to complete the circle and take
decisive action – even in volatile or high
priced markets – secure in the knowledge
that we have both proven risk
management tools and robust liquidity
metrics. Whether we are structuring a
pre-finance deal or working with any of
our 50 or more worldwide banking
partners, we are known and trusted as a
business with firm and carefully managed
financial foundations.
$303bn
OF REVENUE IN 2012
47
CONSECUTIVE YEARS OF
PROFITABLE OPERATION
VITOL
Local knowledge, experienced traders and fully integrated data management systems allowed us to
understand the underlying reason for a big surge in demand 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.
16 VITOL
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 on
difficult, complex projects and deliver
effective solutions quickly and
transparently. Because our partnership
model is based on collective responsibility,
we are careful to assess risk exposure on
the ground, in local markets – where we
can see the real relationship between
cause and effect.
We don’t make decisions based on
theoretical modelling or mathematical
abstractions. With 5,495 ship voyages in
2012 and over 200 ships at sea at any
given time, Vitol is – by any definition – a
very physical trader.
VITOL 17
18 VITOL
CRUDE OIL
What we do
Vitol is a significant participant in global crude oil
markets and crude oil is the largest part of Vitol’s
total energy portfolio. In 2012 we sold 117m tonnes
of crude oil, which amounts to around 2.4m barrels
per day.
Where we do it
Vitol trades crude oil globally. We have a presence
and on the ground expertise wherever crude is
produced, traded, stored and supplied to customers
for refining. This means that we operate in Africa, the
Middle East and the Far East, as well as in Russia, the
Caspian, and North and South America.
hand information as it happens and sharing that
information, quickly and efficiently.
How we do it
We believe that we offer a competitive advantage
because we have the flexibility, speed and logistics
expertise that our customers need and expect.
More than 47 years’ experience of turning market
intelligence into market advantage as well as our
extensive links with all the major crude producers
and refiners means that we are able to work with
existing and new crude streams in any part of the
world. This will help the producer to understand the
real value of the crude oil.
Our long established ventures with the state
oil companies of Nigeria and Oman are clear
demonstrations of our commitment to long-term
relationships.
Overall, we lift crude oil from all the key producers
and sell to every refining company in the world,
wherever they are located.
We have local offices in countries around the world
covering everywhere from Buenos Aires to Beijing,
and Luanda to Latvia. Having a presence on the
ground is key to our approach to getting first
117m
TONNES OF CRUDE OIL SALES IN 2012
261m
TONNES OF CRUDE OIL AND
OIL PRODUCT SALES IN 2012
VITOL 19
NATURAL GAS
What we do
Our gas teams operate across three continents –
Europe, Asia and the Americas – in both pipeline
product and LNG, and we follow the business model
that characterises every part of the Vitol Group:
physical trading based on transportation and
logistics, storage and arbitrage.
With over 17 years’ experience in the gas business,
we have grown our physical supply to more than
25 BCM per annum in Europe alone, supported and
enabled by storage capacity across six countries.
We work with producers, importers, wholesalers,
distributors and industrials on a global basis. Our
unique independence, combined with our ability
to deliver innovative solutions, has made us the
partner of choice for a number of important industry
participants.
Where we do it
We deliver gas to customers in virtually every country
across Europe – utilising an extensive transportation
and storage portfolio.
Across the Atlantic we source and trade Canadian
gas, and facilitate the LNG trade around the US Gulf
region, where we have invested heavily in storage.
How we do it
The scale of our operations and extent of our
geographical coverage allow us to take an holistic
view of market changes, leverage economies of
scale and match supply to demand wherever and
whenever the need arises. We have built on the
relationships in place with our energy industry
partners, and invested in new relationships and
innovative contractual arrangements with suppliers,
pipeline and storage operators in the gas sector,
with commitments reaching out nearly two decades
ahead.
In addition to being one of the main liquidity
providers at trading hubs and cross border points,
our significant and flexible portfolio makes us an
ideal trading partner for tailor-made, structured
products. We are able to offer our clients a wide
range of physical services – helping them to expand
across markets and borders. They can benefit from
Vitol’s core strengths, where we are able to help
them to maximise the profitability of their portfolio
with a range of sophisticated solutions.
An appetite for investment in physical Natural
Gas assets has helped us cement our presence in
this sector and has led to a number of multi-year
transactions.
25 BCM
VITOL MOVES 25 BCM OF PHYSICAL
GAS PER YEAR IN EUROPE
30 MCM
VITOL’S STORAGE FACILITIES IN
EUROPE DELIVER UP TO 30 MCM
PER DAY OF PHYSICAL GAS
20 VITOL
ADDING VALUE TO USA REFINERIES
Vitol manages the
supply chains to CVR
Refining’s Coffeyville
and Wynnewood
refineries in the USA.
VITOL 21
> In addition to supplying up to 150,000
bpd of West Texas and Canadian crude,
we work in tandem to be the ‘face of
the market’ for the refineries and
provide working capital for stock
financing and ongoing investment.
> Our global reach and the quality of our
market intelligence are key
advantages, particularly when coupled
with our liquidity and ability to deliver
innovative and flexible solutions across
a range of capabilities that includes
procurement, financing, logistics and
continuity of supply.
22 VITOL
LPG
What we do
Vitol is one of the largest international LPG traders.
We have the world’s largest pressurised vessels and,
indeed, the largest fleet.
At the core of our operation is a fleet of 9 fully
refrigerated VLGCs and 27 pressurized vessels,
built primarily within the last ten years to Vitol’s
specifications. These enable us to offer excellent
flexibility and, importantly, speed and reliability.
Refiners tend to have limited LPG storage on site, and
with increasingly stringent flaring regulations they
need to be able to ship the gas to market quickly.
By collecting, shipping, storing and trading gas that
would otherwise be flared, we are meeting the needs
of both the petrochemical industry and domestic
users, as well as supplying the growing demand
for autogas. We are also optimising the economic
use of a resource that would otherwise contribute
negatively to climate change.
In addition, Vitol is highly active in the refrigerated
long-haul arbitrage business, ready to move cargoes
wherever global market conditions dictate.
Where we do it
Our fleet ships considerable volumes to countries
where bottled gas is popular – such as Portugal,
France, Germany, Poland, Morocco and Turkey – as
well as supplying cargoes to the US, China, West
Africa, East Africa and the Caribbean.
Vitol also has access to LPG storage in West Africa,
through a joint venture that provides infrastructure
for the gas to be marketed inland, and which will see
significant reductions in flaring in Nigeria.
How we do it
Our size is not and never has been an end in itself:
it is simply a consequence of our success and the
strength of our customer relationships. The Vitol
LPG team is truly multinational, and we use local
knowledge and insights to anticipate demand and
react swiftly and efficiently. Increasingly, we work
with oil and gas companies as a logistics solutions
provider, and we are known for our ability to bring
innovative thinking to life through decisive action.
9.3m
VITOL TRADED 9.3M TONNES OF LPG IN 2012
27
FLEET OF LPG TANKERS BUILT
TO VITOL’S SPECIFICATIONS
VITOL 23
LNG
What we do
LNG will continue to be the fastest growing sector
of the international energy business for many
years. Delivering over 2.3 million tons of LNG in
2012, Vitol has re-affirmed its position as the largest
independent trader of LNG. Vitol continues to supply
our customers both on long-term and spot bases as
their requirements change. Our ability to integrate
with the Group’s natural gas business, to optimise
shipping and manage cross-commodity pricing
provides a wealth of opportunities to meet our
customers’ needs.
The continually expanding business is now balanced
between term sales and spot transactions. With a
growing portfolio we are committing to more longerterm agreements. Operating these agreements
enables Vitol to offer more flexibility and optimise the
flow of LNG both inside the portfolio and externally.
We continue to apply our core energy trading skills to
bring new opportunities to the sector.
Where we do it
As the number of new entrants continues to grow
our customer base is expanding in all the supply
and traded regions of the world. In the last few
years, we have deepened existing relationships and
established new partnerships in Asia, Europe, the
Middle East and the Americas. Through our network
of regional and in-country offices we are able to work
with our customers to meet their short and longerterm requirements.
How we do it
Vitol’s independence is important to our LNG
customers. Unlike many of the largest, nonindependent operators, we are impartial and
uncompromised, with no upstream or
downstream conflicts. Our business is based on market fundamentals, and
our customers benefit from our ability to respond
with speed, flexibility and reliability.
24 VITOL
DOUBLING LPG SUPPLY TO NIGERIA
Working through VTTI
and in partnership with
Nidogas, Vitol has
helped finance and
construct the newest
and largest LPG
spheres on the West
African coast.
VITOL 25
> The Navgas LPG terminal at Lagos was
built in accordance with EU standards
and is almost entirely staffed by local
employees. The terminal features two
4,000 tonne spheres, has a dedicated
jetty and is uniquely capable of supplying
Nigeria’s LPG needs 24/7, 365 days a year.
Vitol’s 27-strong fleet of pressurized LPG
tankers is being significantly expanded to
meet planned demand.
> For Vitol, this major project represents
access to a Nigerian market of over 160
million people. For the people of Nigeria,
the Navgas terminal means a reliable and
expandable supply of an energy source
that is far safer and more efficient than the
only two alternatives – wood or kerosene.
26 VITOL
NAPHTHA
What we do
Vitol trades and moves approximately 17m tonnes
of naphtha globally per year. The volume bought
and sold has grown steadily over the last five years.
We source, trade and move naphtha feedstock and
clean condensate for petrochemical customers,
refineries and large industrial concerns, leveraging
the logistics advantages available to us through the
scale and flexibility of our global shipping, strategic
storage and arbitrage operations. We strive to be
the leader in both supply and delivery contracts to
ensure the best value for our customers.
Where we do it
We operate and trade with every producing country
in the world. We lift from Saudi Arabia, the Emirates,
the Russian Federation, South America and North
and West Africa to name a few. We facilitate the
requirements of refiners, state-owned oil companies
and marketers in North America, Europe, Russia, the
Middle East, Africa and the Far East – and are working
hard to meet the growing needs of refineries and
ethylene plants in China and India.
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
North Africa.
We have a truly global presence and principal
offices in Houston, Geneva, Singapore and London.
Consequently, we are able to optimise our arbitrage
activity through 24 hour coverage of world markets.
How we do it
We bring all our core oil trading values, skills and
services to the naphtha market: clients rely on us for
our physical expertise, our professional operations
staff as well as our absolute commitment to deliver
products that are on specification and on time.
Our ability to always deliver is a reflection of our
commitment to building long term relationships,
the flexibility afforded by our shipping and storage
resources, our financial security and our complete
range of skills and tools.
We have the skills and track record to respond
to opportunities swiftly, reliably and, whenever
necessary, innovatively.
6.3m
BARRELS PER DAY OF NAPHTHA
CONSUMED GLOBALLY IN 2012
VITOL 27
GASOLINE
What we do
Every day, Vitol trades over 950,000 barrels of
gasoline, more than twice the UK’s entire daily
demand. At any given time, we will have between
50 and 100 gasoline tankers on the world’s oceans
and we are a significant supplier of gasoline to the
USA. We are experts in identifying added value and
arbitrage opportunities and we aim to develop longterm strategic relationships, either by supplying or
by offtaking and often adapting to changing local
specifications to ensure security of supply.
Where we do it
We operate, trade and participate in tenders in
every producing country in the world. We own and
lease extensive storage in Singapore, Fujairah (UAE),
Houston, California, Florida, the Netherlands, Nova
Scotia, Latvia, Malaysia and Spain. We serve the
requirements of refiners, state-owned oil companies
and marketers in North and South America, Europe,
the Middle East, Africa and the Far East – and
are working hard to meet the growing needs of
refineries and marketers in China and India. We have
a growing number of partnerships in Russia and the
former Soviet states. Our markets are global and
include California, one of the most highly regulated
gasoline markets in the world.
How we do it
In a non-commoditised market, where gasoline
specifications differ according to state and country
regulations and where change is increasingly driven
by environmental concerns and a growing demand
for low sulphur products, market intelligence
really matters. Our experience, combined with our
understanding of worldwide energy markets, gives
us an in depth, real-time awareness of the specific
needs of end users. Our logistics reach and ability
to act decisively wherever demand occurs means
we’re able consistently to understand and meet
those needs.
23.2m
BARRELS PER DAY OF GASOLINE
CONSUMED GLOBALLY IN 2012
950,000
APPROX. BARRELS OF PHYSICAL
GASOLINE TRADED WORLDWIDE
PER DAY BY VITOL
28 VITOL
GAS OIL & JET
What we do
Vitol 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
onshore tank storage, with 70% of product stored in
Vitol-owned tanks.
Where we do it
We have offices in Houston, Geneva, London,
Singapore, Bahrain, Dubai and Moscow and we
serve the key distillates markets in Asia, Europe,
the Middle East, South America and the US. We are
actively expanding our business in Africa and China.
Vitol already supplies jet fuel to many of the world’s
airlines. We are rapidly expanding our business in this
area, adding value through our wealth of experience
in handling physical products.
Our 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.
With our strong storage position and market
expertise we are one of the key global suppliers of
gas oil and ultra low sulphur diesel (ULSD). As the
world moves towards ever cleaner sources of energy,
Vitol is also emerging as one of the significant players
in biodiesel, offering a full range of fuels from B5 to
B100 based on sustainable oils.
How we do it
Excellent market intelligence underpins each and
every trade we make. We are keen observers of
economic, political and consumer trends on both
macro and micro levels; we understand how cold
weather in Asia affects supply to Europe; we try to
predict, anticipate and react to international, national
and regional imbalances wherever in the world they
occur.
Drawing on our global trading, shipping and
storage resources and expertise in the US, South
America, Europe and Asia, we are ideally placed to
move cargoes and realise the opportunities arising
from regional and global imbalances. Our detailed
knowledge of specifications – particularly important
in jet fuel – gives us a real advantage in achieving
better trading performance.
Global arbitrage has long been a core Vitol strength.
Today, it is a structural feature of the middle distillates
market and, as such, Vitol is fully qualified and
equipped to optimise trading opportunities – both
now and in the future.
26.5m
BARRELS PER DAY OF GAS OIL
CONSUMED GLOBALLY IN 2012
70%
OF VITOL’S ONSHORE GAS OIL AND
JET STORED IN VITOL-OWNED TANKS
VITOL 29
FUEL OIL
What we do
Vitol is one of the most long established and active
independent physical traders in the global fuel oil
market. Every month we ship 3m tonnes of fuel oil.
Approximately 50% of our fuel oil business is based
on trading feedstocks, bought by refiners for further
upgrading.
We have a large and increasing share of the bunker
market, driven by the establishment of strong long
term relationships with fleet owners. We have also
built an extensive and expanding network of storage
terminals – both owned and leased – in key strategic
locations.
Where we do it
Vitol trades fuel oil globally. We have extensive
storage facilities including Rotterdam, Fujairah, the
Caribbean and Singapore. We source high sulphur
fuel oil from markets such as Mexico, the Middle
East and the former Soviet Union, to ship to Asia and
take low sulphur fuel oil from the USA and Europe,
often to Asia. Feedstocks are frequently sourced
from Europe, North and West Africa and shipped
to refiners in the US Gulf Coast. To facilitate these
movements we charter over 450 vessels per annum.
How we do it
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
beyond simply moving physical product. Vitol is
resolutely customer focused, providing fuel oil
solutions and stocks all over the world. We also have
the experience and in-house blending expertise to
meet utilities, bunker buyers and refiners’ widely
varying demands for different blends of fuel oils and
feedstocks.
We are able to optimise the value of a seller’s stream
and to meet and exceed the demands of refinery,
bunker and vessel owners. We succeed by being
consistently dynamic, innovative and well-informed.
Around 40%
OF THE WORLD’S FUEL OIL IS
CONSUMED BY SHIPS
Leading
SUPPLIER OF FEEDSTOCKS TO REFINERS
30 VITOL
COAL
What we do
Having entered the coal market in 2006, Vitol has
grown rapidly to become one of the world’s top 5
coal traders.
In recent years, the coal market has become
increasingly liberalised, with new grades of coal
and pre-financing instruments creating a more
sophisticated environment and one that is ideally
suited to Vitol’s experience and expertise. We cover a
wide range of specific origins for both steam coal and
anthracite, have a presence in every major mining
region and are successfully meeting the diverse
needs of customers around the world. As well as investing significantly in production
output, we have signed long term contracts with
producers in both the Far East and Europe and are
now a major trading presence in steam coal.
Similarly, we are now servicing numerous long-term
outlets with utilities.
Vitol is also actively managing and developing a
range of innovative logistics solutions ,which are
providing access to international markets for a wide
range of small and medium sized producers with
whom we have developed long-term relationships.
Anthracite is another significant strength, with longterm contracts in Russia, Ukraine and South Africa,
and we support this with a full break-bulk operation
(for storage, handling and wholesale) in Ghent,
Belgium.
Where we do it
Vitol partners, finances and owns mines in Indonesia,
Canada, South Africa, Colombia and Russia. We
supply across the Asia Pacific region and into
all major European power utilities. Vitol is also
participating in the development of major new port
and loading facilities in Southern Africa , Colombia
and North America.
How we do it
Our flexibility, liquidity and ability to manage our
financial risks allow us to work in more challenging
environments, both as a producer and a buyer, and
to trade in forward markets up to five years ahead.
We are also applying models employed in oil and
natural gas; by focusing on the physical aspects,
we can add significant value in areas such as coal
finance and logistics.
Vitol is also focused on other areas central to the
sector. In dry freight we add real value to our coal
presence by taking longer term positions in Cape,
Panamax, and Handy sized vessels and complement
this by being an active player in the shipping futures
market. Additionally, Vitol also now has a presence in
the biomass market and is involved in shipping and
marketing of wood pellets.
Our approach is personal and trusted. We build longterm relationships with local partners and we invest
in a shared future.
25.2m
TONNES OF COAL SALES CONTRACTED IN 2012
VITOL 31
POWER
What we do
We access power station capacity (by supplying
fuels in exchange for power) – transport power
cross-border – and operate as a power trader. We
also have the flexibility to offer products that mimic
power station dynamics and economics.
There is a natural synergy with our existing activities
in natural gas, coal and carbon emissions, and by
combining these functions we are able to offer a full
range of multi-commodity solutions to power plant
owners and developers, utilities and large industrial
users, generators and suppliers.
Where we do it
Vitol has developed physical and financial positions
throughout Europe. This augments our existing
power activity in the US, where we are active in
trading power forwards and options in the Eastern
states. We are also active across the UK, France,
Germany, Switzerland, Italy, Austria, Slovenia and the
Benelux countries, with a reach that is broadening to
extend further into Eastern Europe.
How we do it
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
plant generates in exchange for fuel supply and
emissions credits. The investor gets the comfort of
a margin over a defined term, and is protected from
volatility on power prices and the fuel needed to
produce it.
Our experience as an oil, gas and coal trader gives
us a rare and profound understanding of the
relationship between energy and fuel. We leverage
this understanding to generate efficiencies, predict
trends and develop effective long term solutions.
We are independent of any utility or finance house,
we look to build and sustain long-term relationships
whenever possible and we have the liquidity, assets
and reach to structure bespoke deals.
322 TWh
TRADED BY VITOL IN 2012 IN EUROPE
POWER TRADING
GENERATION
UNIT
POWER
FUEL &
CARBON EMISSIONS
& TOLLING FEE
VITOL
GAS
MARKET
COAL
MARKET
EMISSIONS
MARKET
32 VITOL
THE FUTURE OF COAL TRADING
IN SOUTHERN AFRICA
Vitol is partnered with
Grindrod Limited
in a coal and iron
ore export terminal
in Mozambique.
Currently expanding
to 7.3 million tonnes
per annum, this will
provide incremental
export capacity
for junior miners in
southern Africa.
VITOL 33
> As South Africa’s Richards Bay Coal
Terminal (RBCT) nears maximum
capacity, so the challenges facing coal
exporters have become more acute –
particularly in South Africa where RBCT
has long been the only export option.
> The Maputo terminal is destined to set
new standards for health and safety,
employee welfare and the long-term
management of its environmental
impact. It will also promote dramatic
and lasting growth in local and regional
economies (particularly in Zimbabwe
and Botswana).
> With Vitol providing liquidity and
logistical and trading expertise, TCM
Phase IV will be exporting 20 million
tonnes of coal and 10 million tonnes of
iron ore by 2018.
34 VITOL
CARBON
What we do
Vitol has one of the largest and most diverse carbon
project portfolios in the world and our involvement
and expertise in carbon markets is global and
comprehensive.
allows us to take on trades and structures that others
might have to syndicate. Although our portfolio is
wide ranging we pride ourselves on being a small
team enabling speed of decision making – key in a
dynamic and constantly changing environment.
Where we do it
Whilst Vitol has a global reach, we remain very
much a hands-on, physical trader with a local
presence where it matters. With carbon desks in
Geneva, Singapore, Beijing, Dubai, Moscow, Houston
and London we cover the global carbon market
from Europe to US, Japan to Australia and
everywhere in between.
Our partnerships are key – including our ownership
of carbon credit aggregator CRM and with the
Chinese state owned company Huaneng , with
whom we formed a carbon fund, to name just two.
Ultimately, we are focused on delivering value for our
partners, whatever their objective and our clients are
as diverse as our portfolio.
How we do it
Vitol is one of very few participants in the market
whose involvement extends all the way from project
inception to trading activity – right through the value
chain. The size and diversity of our projects portfolio
They include:
> Industrial companies looking to monetise
their carbon position.
> Utility companies seeking liquidity in
the marketplace.
> Governments, for whom Vitol can facilitate the
meeting of compliance obligations.
> Pension and hedge funds, looking for a trading
partner with solid expertise.
> Project developers, looking to maximise the
profitability of their projects through our
sophisticated portfolio.
Vitol is constantly looking for new partners in the
carbon market. This highly complex market presents
many opportunities and Vitol is ideally placed to help
our partners take advantage of them while adding
real and measurable long-term value.
>350m
TONNES OF CONTRACTED CARBON VOLUME
350
CARBON PROJECTS
INVOLVING VITOL GLOBALLY
Vitol
WINNER OF ENVIRONMENTAL FINANCE AWARD:
BEST TRADING COMPANY FOR CARBON
No.1:
POINT CARBON LISTED VITOL NUMBER 1
PROJECT PARTICIPANT BY REGISTERED
PROJECTS IN THEIR LAST AWARDS
VITOL 35
ETHANOL
Industry Context
The U.S. continues to implement the Renewable
Fuels Standard with dramatic effect. The renewable
fuel market has reached more than 1 million barrels
per day, a wholly unprecedented volume, under the
direction of a programme that calls for a volume of
2.3 million barrels per day by 2022. This programme
now mandates a renewable content of 9.63% in all
road transportation fuel, up from 9.23% in 2012.
2012 also saw the U.S. market shift from a net
exporter in 2011 to a large net importer, importing
around 40,000 barrels per day of ethanol, mainly
originating from Brazil, with peak imports reaching
over 80,000 barrels per day. While the United States is the largest single
renewable fuel market in the world, Vitol continues
to expand its presence in this growing and
increasingly important fuel market globally, with
renewable fuel blending capability in Europe, the
Middle East, Africa and Far East market.
Where we do it
Vitol continues to actively participate in the growing
world market for ethanol. In the U.S., now the world’s
largest ethanol market, having surpassed long
time leader, Brazil, Vitol maintains an important
presence in the key markets of New York harbour,
Chicago, Florida, Houston, San Francisco and Los
Angeles. Vitol maintains ethanol storage, supply and
distribution in all of those markets and continues to
look for opportunities to grow and add value.
36 VITOL
UTILITY ENERGY SUPPLY
As markets open up,
new opportunities
are created. A stateowned electricity
generator in Europe
approached Vitol to
explore how we might
add value as a supplier
of their feedstocks.
VITOL 37
Vitol worked with the generator to:
> Win their fuel oil supply tender at
competitive prices, acting as their ‘eyes
and ears’ around the global
marketplace.
> Bring in our expertise and recommend
improvements to ensure
optimum pricing.
> Review supply facilities and
recommend improvements, including
financing options.
> Propose different supply arrangements
– e.g. coal, natural gas, LNG – as well as
possible CER projects.
The utility company now has access to
Vitol’s unrivalled global network for the
sourcing of feedstocks and our ability to
source alternative energy supplies.
38 VITOL
METHANOL
What we do
Methanol is a highly versatile commodity
and one for which demand is growing rapidly.
Methanol derivatives find use in both energy and
petrochemical applications. In the energy sector
the market for methanol is expanding rapidly as
methanol is used in transportation fuels such as
MTBE, bio-diesel and gasoline blending. With biofuel mandates increasing yearly, methanol demand
for this application will continue to grow. Through
DME (dimethyl ether) methanol can be used as an
LPG substitute, particularly in bottled gas markets,
and in MTO (Methanol to Olefins) methanol is
replacing higher cost naphtha as a feedstock for
olefins. In the traditional petrochemical sector
methanol derivatives are used in everything from
adhesives to paints and polyester.
In 2012, Vitol marketed over 2m tonnes of methanol
globally and has similar plans for 2013.
A major player in the methanol marketplace since
1989, Vitol is a truly global trader and marketer
of methanol and has the logistics reach, strategic
storage capacity, arbitrage expertise and flexibility
to both break-bulk and serve the diverse needs
of end users.
Where we do it
Vitol has methanol teams in Houston, Geneva,
Rotterdam, London, Dubai, Singapore, and Beijing.
Vitol’s key partnership in Oman Trading International
supports its growing methanol business via its
offtake from the Salalah Methanol Company. We also
have long term supply and offtake relationships with
producers and consumers in the US, Europe, Africa,
the Middle East and Asia.
How we do it
We focus on building long-term relationships
based on our ability to provide security of supply
from multiple supply sources. Large trading flows
– combined with comprehensive storage in key
locations and our status as one of the world’s
largest charterers of shipping – mean we can meet
practically any demand, anywhere, any time.
2m
VITOL PLANS TO MOVE 2M TONNES
OF METHANOL GLOBALLY IN 2013
VITOL 39
CHEMICALS
What we do
Vitol is a major and growing supplier of bulk raw
materials from Asia and the Middle East to European
and US chemicals consumers.
We deal directly with petrochemical producers and
consumers, receiving shipments into our worldwide
logistics facilities and using our reach and market
knowledge as a global energy trader to identify and
act upon arbitrage opportunities.
Our business is focused on two core products:
> Benzene – used among other things in the
production of styrene, phenol and cyclohexane.
> Paraxylene – a main feedstock for the manufacture
of polyester.
Where we do it
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
Rotterdam, Houston and Korea.
How we do it
We have an in depth understanding of world energy
markets and can react to changes in the chemicals
marketplace, quickly and decisively. This knowledge
and speed of response, combined with our ability
to move physical product, means we are able to
tolerate price fluctuations and better manage our
physical price risk exposure.
We also trade styrene, toluene, mixed xylene
and pygas.
3.3m
VITOL TRADED 3.3M TONNES
OF CHEMICALS IN 2012
40 VITOL
METALS AND MINERALS
What we do
Trading through the Group’s wholly owned
subsidiary Euromin SA, we are active in base metal
concentrates, ores, secondary raw materials and
residues as well as primary base metals and minor
metals. We trade around ten different metals –
representing some 30 products – from bulk ores to
master alloys with a wide range of values and cargo
sizes. We are active in copper, aluminium, nickel, and
tin metal, but specialize in zinc and lead, from ores
through to refined product, with the expertise to
source, trade, distribute and market metal through
a range of industrial sectors. We deliver zinc metal
and zinc alloys to steel plants for galvanizing and we
also supply metal to the chemical, die casting and
metallurgical industries.
Euromin trades in copper ores, lead and silver ores
and concentrates, high purity indium metal and
cadmium metal, and is also developing the trading of
bauxite and alumina. Euromin has established a steel
scrap trading business and is building an iron ore
trading business in conjunction with Vitol.
Euromin benefits from the extensive network of Vitol
Group offices around the world, and is an Associate
Trade Member of the LME (London Metal Exchange)
and a member of the International Zinc Association
and the Galvanizers Association.
Where we do it
Our areas of operation are global. China is a major
recipient of most of our ores and concentrates.
How we do it
Vitol’s status as a global energy trader gives Euromin
access to new markets and allows the business
to build on synergies generated within the Group.
Euromin has a broad spectrum of customers and
the capability to take raw materials to smelters and
refined metals to end users – backed by the financial
stability, risk management expertise and global reach
of Vitol.
40+ Countries
VITOL SUPPLIED A COMPREHENSIVE
RANGE OF METAL PRODUCTS (INCLUDING
SPECIALIST) TO CUSTOMERS IN OVER 40
COUNTRIES WORLDWIDE
VITOL 41
SUGAR
What we do
Vitol is a significant participant in the world sugar
market, with a wealth of experience in the sector
dating back to 1992. Today we trade up to 5% of
the world’s physically traded sugar in free market
areas, adding value to trade flows from producers in
the Western and Eastern hemispheres to markets
in North Africa, the Black and Baltic Seas and the
Middle and Far East. Annually, we move 1.5m tonnes
and trade 2.5m tonnes of raw sugar in bulk. We
spot charter and time charter vessels ranging from
20,000 to 50,000 tonnes.
Where we do it
Vitol works with producers in Brazil, Central America,
Thailand, India and South Africa, and end-users in
North Africa and the Middle East, Russia and the
other former Soviet Republics, the Subcontinent,
South East Asia and the Far East to source and place
their physical requirements.
How we do it
Vitol is ideally placed to draw on our knowledge
of both energy and sugar, at a time when ethanol
production is growing due to the mandated use of
alternative fuels.
We work with clients to help them to take advantage
of changing supply and demand patterns for
agricultural commodities. This could include making
sense of a market such as India, which alternates
from being a major exporter to a significant importer,
as well as how to access opportunities that continue
to develop in countries such as China.
We invest time in building long term relationships
with our customers, helping where necessary with
finance initiatives and working together to anticipate
and react to changing market conditions.
42 VITOL
TERMINALS, REFINING AND SHIPPING
VTTI represents far more than simply a rapidly expanding
storage resource. It is a matrix of fully integrated services
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
centres around the world and an
investment strategy that will see us more
than double our storage capacity within
the next three years. The Vitol Group
owns and charters a fleet of modern
vessels with a truly global reach and we
own, operate or have interests in
refineries on three continents.
To be a world class player means working
to world class standards – a fact reflected
in our commitment to the highest safety
and environmental standards, the
constant pursuit of smarter, more
efficient engineering solutions and
transparent working relationships with
local and state authorities, governments
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.
VITOL 43
44 VITOL
TERMINALS
What we do
VTTI’s mission is to own and/or operate
bulk logistics assets such as terminals and
pipelines, to the highest safety and
environmental industry standards, while
maximizing return for shareholders. Today,
VTTI is active in 14 countries around the
world and offers access to a total capacity
of around 8.6m m³. This capacity is set to
increase to over 13m m³ in the coming
years through a proactive expansion and
construction programme*.
Our strength derives from our knowledge
and understanding of the energy sector.
We know what our customers require of a
storage facility because of the interaction
with one of our key customers, the Vitol
trading team – hence our focus on the
flexibility, loading capabilities and
infrastructure needed to maximise trading
opportunities, leverage economies of
scale and make swift and decisive use of
market insights.
Where we do it
VTTI is an integral part of a bigger picture
that might see, for example, Vitol oil from
Russia flow through Vitol pipelines to a Vitol
ship destined for a VTTI terminal in
Amsterdam. In building a global network,
we have pursued a policy of investing in oil
and gas terminals and associated pipelines
at the major import/export locations – or
trans-shipment points – around the world.
*Gross capacity, not on an equity basis
Terminals located in:
ETT, Rotterdam, The Netherlands
ETA, Amsterdam, The Netherlands
VNT, Ventspils, Latvia
BNK, Kaliningrad, Russia
VTTI FTL, Fujairah, United Arab Emirates
VTT Port Qasim, Karachi, Pakistan
Vitco, Zarate, Argentina
Seaport Canaveral, Cape Canaveral,
Florida, USA
Navgas, Lagos, Nigeria
ATPC, Antwerp, Belgium
ATB, Johor, Malaysia
VTTI Kenya, Mombasa, Kenya
Petrotank, Germany
Projects under development
ATB expansion, Johore, Malaysia
VTTI FTL expansion, United Arab Emirates
VTTV, Vasiliko, Cyprus
TEW Rotterdam, The Netherlands
VTTI Algeciras, Los Barrios, Spain
Vitco expansion, Zarate, Argentina
8.6m m3
CURRENT VTTI TOTAL CAPACITY
How we do it
Our holistic view of the energy sector
allows us to accurately bridge the gap
between asset people, who take a long
term view, and traders, who have to make
instant decisions. We never cut corners,
always look to protect our assets and the
environments and communities in which
they’re located, and actively seek out those
customers whose business synergies
stand to deliver the greatest mutual
commercial benefit.
Our Vitol Group expertise and experience
encompasses upstream, trading, utilities,
shipping and terminals, and so we are able
to coordinate and direct resources,
maximise efficiencies, shorten turnaround
times and reduce costs.
Above all, we deliver safe, intelligent, flexible
solutions – often born of local knowledge
and expertise. From the vibrant Russian
export market; to the hub of Europe’s oil
industry; to the entry and exit point of the
Arabian Gulf; to the access point for Latin
America’s growing internal market – VTTI is
adding lasting and measurable value –
safely and reliably.
Around 13m m3
TOTAL CAPACITY OF VTTI BY 2016
VITOL
46 VITOL
SETTING A NEW BENCHMARK
FOR INDEPENDENT TERMINALS
VTTI, in partnership
with a local maritime
conglomerate, has
created a world-class
terminal at Tanjung
Bin, Johore.
VITOL 47
> Phase 2 and 3 developments will take
total fuel oil, gasoline and middle
distillates storage capacity from 890,000
cubic metres to over 1.6 million cubic
metres. It will also set new standards for
safety, flexibility, security and load rates
in the independent terminals industry.
> The ATB terminal can accommodate
all sizes of tanker, including VLCC, and
is purpose-built to meet or exceed the
demanding storage requirements of
oil traders.
> With its proximity to Singapore, the
largest Asian hub, ATB is ideally situated
to open up exciting regional distribution
opportunities and contribute
significantly to the vibrant Malaysian
energy landscape.
48 VITOL
REFINING
What we do
Vitol has been involved in refining since it
was established in 1966, both through
direct ownership and indirectly through
processing agreements.
Vitol’s growing refining presence is focused
on three specific areas:
> Owned and Operated: Vitol currently
owns and operates over 150 kbd of
refining assets in Fujairah, Cressier
and Antwerp.
> Crude Supply Agreements and Stock
Financing: in the US, we supply
Coffeyville and Wynnewood refineries up
to 150,000 bpd of crude and provide
working capital for stock financing and
ongoing investment. Our global energy
trading presence, combined with our
strong balance sheet, allows us to tailor
specific agreements that can provide
benefits to any refining counterparty.
> Processing Agreements: these allow Vitol
to lease unused refining capacity to try
and benefit from positive refining
margins. Our global access to crude and
feedstock may provide attractive crude
options, and the products produced can
be made available to our product trading
teams. The refinery profits from the
processing fee and the ability to lock in a
refining margin for that part of its
capacity that is leased to Vitol.
Further detail
Vitol’s first actual ownership and operation
of a refinery came when we acquired what
became the North Atlantic Refining
Company (NARL) in Newfoundland. Our
highly successful ownership and operation
of this refinery over 13 years gave us the
experience and expertise to expand further
into the refining sector.
We next acquired a 90% stake in Fujairah
Terminal Limited ( FTL) in 2007, with
refining and storage assets in the
Emirate of Fujairah (UAE).
Mothballed since 2003, the refinery now
operates at up to 80,000 barrels per day.
There is still additional land to expand and
further investment opportunities are being
considered. Since the purchase, significant
additional investment has been made,
with now over 1m m3 of product storage
in place.
In 2010 Vitol purchased the Antwerp
refining assets of Petroplus Holding AG.
The facilities are connected to an extensive
pipeline network and harbour
infrastructure providing flexibility for
hydrocarbon feedstock, intermediates and
finished products. They include one of the
largest bitumen processing plants in the
Benelux region with a capacity of
approximately 875,000 tonnes per annum
and a tank storage facility with a potential
capacity of approximately 450,000 cubic
metres after additional investment.
In June 2012 Vitol, in partnership with
AtlasInvest, purchased the Cressier refinery
in Switzerland, as well as logistics and
marketing assets. A new company was
formed, Varo Energy. The refinery is an
integrated atmospheric-vacuum
distillation, visbreaking and
thermal-cracking refinery with a
throughput of 68,000 bpd and able to
process a wide variety of crude feedstocks.
The future
Vitol continues to look for opportunities to
work with crude oil producers to access
our own refinery system and with other
refiners to optimise their investment by
accessing the best possible crude oil and
feedstock alternatives, getting best values
on products and leveraging our access to
the best possible financial terms. Future
refining investments will be evaluated on a
case by case basis.
80,000
THE FUJAIRAH REFINERY IS NOW ABLE
TO REFINE 80,000 BARRELS PER
DAY AT MAXIMUM CAPACITY
VITOL
50 VITOL
A HIGHLY FLEXIBLE REFINING ASSET JUST
SOUTH OF THE STRAITS OF HORMUZ
Our Fujairah refinery
offers across-thebarrel capability at a
strategically key Indian
Ocean location.
VITOL 51
> Behind the headline statistic of being an
80 kbpd refinery, Fujairah has a more
interesting story to tell. This highly
efficient, straight-run refinery, consisting
of what were initially two refineries, has
the capability to run heavy, acidic crudes
due to its stainless steel units. Recently
fully overhauled, Fujairah’s ability to take a
broad basket of different crudes,
combined with a blending capacity that
allows us to produce bespoke product
qualities for regional markets, makes this
a particularly flexible asset.
52 VITOL
SHIPPING
What we do
We are physical traders and we move
energy from markets that are in surplus to
markets that are in deficit, across borders
and oceans. We move it safely,
competitively and efficiently, with due care
for the environment.
A world-class shipping operation is an
essential part of the management of this
supply chain, underpinned by the depth of
operational experience that exists across
the shipping team.
Where we do it
We have commercial and operational
offices in five of the world’s most strategic
shipping locations - London, Singapore,
Houston, Geneva and Bermuda - giving us
a leading strategic and logistical edge in a
global market where time zones blend
into one.
5,495
VOYAGES IN 2012
How we do it
Through close contact with our trading
groups and utilization of our own market
intelligence, Vitol is perfectly positioned to
anticipate worldwide freight movements in
volatile shipping markets.
Mansel Ltd (www.mansel-ltd.com) is the
commercial shipping arm of Vitol. This
allows the trading groups to provide
flexibility to their customers as well as
offering risk management solutions for
Vitol’s freight exposure.
Within Vitol, the shipping team is not only a
service provider, transporting commodities
in the safest, most efficient and cost
effective way possible but is a competitive
business in its own right.
Mansel contracts vessels using various
financial structures for varying periods
from a few weeks to a number of years. The vessels are underpinned by the core
cargo flows of the trading groups, however,
these contracts need to be commercially
viable in their own right. The aim of the
shipping group is to maximize the
utilisation and thereby the returns, of these
assets under our commercial control.
Shipping profitability is maximized and
Vitol shipping exposure is managed using a
range of third-party and internal cargoes,
contracts of affreightment and derivatives.
Together with strategic partners, the Vitol
Group has invested in a series of newbuild
eco MRs from a major Korean shipyard for
delivery in 2013 and 2014. These
vessels offer improved fuel efficiency and
enhanced environmental
protection compared to existing tonnage
and are an example of Vitol protecting the
interests of our customers and partners
wherever we can.
The portfolio of cargoes and shipping
activity is extensive and includes crude oil,
oil products, chemicals, dry cargo, such as
coal and sugar, LPG and LNG. We are
expanding our activities in the dry cargo
market where, as with every other Vitol
business, market intelligence is key to our
success.
Vitol is the largest independent charterer
of product tankers in the world, shipping
around 300m tonnes of crude oil and
products in 2012. At any one time there are
over 200 tankers on the water undertaking
voyages for Vitol. In 2012 we completed
5,495 voyages, compared to 5,460 in 2011.
Nowhere are the core skills that underpin
all of Vitol’s activity more prevalent than in
our shipping business: a combination of
global reach and local understanding,
leadership and partnership and speed and
flexibility.
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54 VITOL
MARKETING
“Physical trading will always be at the heart of our company.
It is the engine that drives Vitol and gives us the global
presence, flexibility and market intelligence to quickly identify
and capitalize on opportunities. Equally, we have always had
expertise right across the value chain. Today, as many of the
established major players in the oil and gas sector look to
move away from refining and downstream marketing, we are
ideally positioned to build on our ability to maximize value in
the chain through both wholesale and retail marketing
initiatives.” Ian Taylor – Vitol Chief Executive
Our Marketing activities have grown
significantly in recent years. Today, we
supply aviation fuel to many major airlines
at hub airports around the world. We are
also marketing Shell-branded fuels and
lubricants across much of Africa. We have
opened up new wholesale markets via our
Cressier refinery in Switzerland and we
have expanded our capability to supply
middle distillates to customers in
Germany. In each instance, we add value
by working efficiently, ensuring continuity
of supply and harnessing the benefits of
our global reach.
VITOL 55
56 VITOL
VITOL AVIATION
Rapid, focused and sustainable growth
around the world is the hallmark of this
dynamic and successful business.
What we do
The Vitol Aviation brand was established to
provide both bulk or into-wing jet fuel
supply to a broad customer base, sharing
the benefits of Vitol’s global supply chain
efficiencies and jet fuel handling expertise.
A long-term value offering of both bulk and
into-wing jet fuel supply to commercial
airlines and military customers.
Where we do it
Vitol Aviation supplies more than 1m
tonnes per year into-plane at the US
locations of Los Angeles, San Francisco,
Honolulu, Las Vegas, San Diego, Orlando
(MCO and SFB), Melbourne, Gainesville,
Jacksonville, Daytona Beach and Ontario
airports. We also market volumes to airline
customers via the Colonial pipeline system
and supply ex-pipe to airports in Phoenix
and New York. In Europe, we supply bulk
and into-wing at Frankfurt, Munich,
Brussels, Amsterdam, Luxembourg, Liege,
Barcelona, Madrid, Palma de Mallorca,
Manchester, Stansted and London
Heathrow airports.
In Asia we supply Kuala Lumpur Airport.
Vitol Aviation’s African portfolio now
includes 21 airports as part of the purchase
of Shell’s downstream business by Vivo
Energy in December 2011. 2013 entry
plans include Paris Charles de Gaulle, Paris
Orly, Zurich, Moscow Domodedova,
Moscow Sheremetyevo, Vienna, and
Geneva airports.
How we do it
One of the world’s largest bulk traders of jet
fuel, Vitol has long been a major participant
in trading markets, with significant supply
contracts with all the major export refiners,
including in the Middle East, Europe and
the Far East. Our security of supply is
underpinned by system controls and fully
audited product quality practices which
meet and exceed the stringent global
specifications and joint industry guidelines
for managing and handling jet fuel,
coupled with an understanding of the
dynamics that influence jet fuel prices and
close linkage with our trading business.
This, supported by an unwavering
commitment to becoming a significant
long-term participant in the wholesale and
retail jet markets, gives us a firm yet
dynamic global base on which to continue
to build this fast growing enterprise.
1m+
TONNES OF JET FUEL SOLD INTO PLANE IN USA
1.6m
TONNES OF JET FUEL SOLD IN EUROPE
1m
TONNES OF STORED JET FUEL
IN EUROPEAN BASIN
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58 VITOL
VITOL AVIATION ARRIVES
AT LONDON HEATHROW
Vitol Aviation’s entry
into the Heathrow
(LHR) market makes us
the first new into-wing
jet fuel supplier and
marketer since 1987
at the world’s busiest
international airport.
VITOL 59
> We have made significant long-term
commitments and infrastructure
investments to make this possible and
LHR is now a key hub for Vitol Aviation’s
rapidly expanding global network of
airports and aviation refuelling
business. We are succeeding because
we have proven logistics ability, the
highest quality fuel handling processes
and expertise, the liquidity to invest
and the depth of resources to ensure
continuity and robustness of supply.
> Our entry to LHR supported a new
into-wing refuelling company operated
by Swissport, whose credentials as a
globally recognized and respected
into-wing refuelling and ground
handling company make them the
ideal partner for Vitol Aviation as we
actively grow our global business.
> Today, we supply around 2.5 million
tonnes of jet fuel into-wing across 44
airports. By the end of 2013 we aim to
provide supply at more than 60 airports
around the world. In 5 years’ time, we
fully expect to have quadrupled the size
of our operations and are confident of
supplying up to 10 million tonnes
into-plane across a network of over
150 airports.
60 VITOL
VITOL GERMANY
The ability to combine and coordinate
trading, terminals, refining, storage and
marketing capabilities underpins a
strong and growing presence in these
key regional markets.
What we do
Vitol Germany GmbH stores, distributes
and markets seaborne middle distillates,
primarily supplied from Latvia and Russia,
through our own network into markets in
Northern Germany.
Where we do it
Based in Hamburg, Vitol Germany brings
products into ARA tankage and supplies
bunker fuel and gas oil by barge in the port
areas around Hamburg, Bremerhaven and
Weser. Our new bunkering operation
means we can now provide fuel directly to
shipping customers. With our 75%
ownership of the Varo Energy refinery at
Cressier, we are also able to supply
products by rail from Switzerland to
Germany, ensuring security of supply on a
year-round basis.
How we do it
Reliability, continuity of supply and the
ability to meet demand regardless of
weather conditions are the hallmarks of
Vitol Germany’s operation. We have the
flexibility and resourcefulness to act fast,
access to significant and growing storage
capacity, and a highly experienced team.
By 2016, we expect to be distributing up to
one million tonnes of product per year.
1m
TONNES OF OIL PRODUCT - OUR 2016 TARGET
VITOL
62 VITOL
VIVO ENERGY
The new company behind the Shell brand in
Africa, distributing and marketing Shell’s
world-class fuels and lubricants to a growing
pan-African customer base.
What we do
Vivo Energy is the new company behind
the Shell brand in Africa. We are here to
distribute and market Shell’s world-class
fuels and lubricants to a growing
pan-African customer base. By delivering
the highest standards of safety, supply
reliability, technical expertise and customer
service, over time we will achieve our goal
of becoming the most respected energy
company in Africa.
A joint venture between Vitol (40%), Helios
Investment Partners (40%) and Shell (20%),
Vivo Energy represents a unique
combination of resources, experience and
expertise. Vivo Energy has a long-term
commitment to the countries in which we
operate and their social, environmental
and economic success.
Where we do it
Vivo Energy is currently incorporated on a
national basis in 14 countries - Madagascar,
Burkina Faso, Cape Verde, Cote d’Ivoire,
Guinea, Mali, Mauritius, Morocco, Senegal,
Tunisia, Botswana, Namibia, Kenya and
Uganda - but with more to come as we are
actively engaged in adding countries to
this portfolio. We operate 1.2 million cbm of
storage and 1,300 retail sites, employ 2,500
people, market over 7 billion litres of Shell
fuel every year and provide quality Shell
fuels and lubricants to our customers
across much of Africa.
How we do it
Combining the strength and profile of the
Shell Brand with a flexible, dynamic and
entrepreneurial business style gives us a
unique competitive advantage in the fast
growing African markets.
We are ambitious, responsible and
safety-oriented in everything we do. Our
aim of doubling the size of the business
within the next five years is eminently
achievable because we have a very clear
and direct business vision: to focus, to
simplify and to perform.
1,300
RETAIL SITES IN 14 COUNTRIES
2,500
EMPLOYEES
VITOL
64 VITOL
VARO ENERGY
A fully integrated combination of supply
flexibility, high quality kit and excellent links
into a growing wholesale market.
What we do
Formed as a joint venture between Vitol
(75%) and AtlasInvest (25%), Varo Energy
now operates the Cressier refinery in
Cressier, Switzerland, runs all
Cressier-related marketing and logistics
activity in Switzerland and has created the
Varo Energy Tank Storage company. These
assets, together with Oléoduc du Jura
Neuchâtelois S.A. and Société Française du
Pipeline du Jura, were purchased from
Petroplus in June, 2012.
Varo Energy’s Cressier site is an integrated
atmospheric-vacuum distillation,
visbreaking and thermal-cracking refinery
with a throughput of 68,000 barrels per
day. It is one of only two refineries in
Switzerland and supplies around 25%, by
volume, of all light and middle distillates
sold nationally.
Where we do it
In addition to refining, storage and pipeline
assets in Switzerland, Varo Energy benefits
from the regional and worldwide logistics
expertise of the Vitol Group, including Vitol
Germany and VTTI. Consequently, we are
able to store and supply products to the
Swiss market via ARA tankage and the
Rhine, import directly through the global
Vitol network, find new and growing
markets for Cressier’s fuel oil and support
Cressier’s inland reach with VTTI’s
coastal presence.
How we do it
In combination with Vitol and VTTI, Varo
Energy benefits from a broader and larger
slate of crude oils and a wider network to
find new markets for Cressier products.
We have an experienced, motivated and
expert management team and we have
the tools and systems in place to manage
operational and financial risk effectively
in any scenario. Varo Energy will grow
by increasing local market share and,
over time, may even invest in other
European refining, marketing and
logistics businesses.
VITOL
66 VITOL
UPSTREAM
Vitol has been building its upstream oil and gas business for
20 years. Today, we have a diversified portfolio of exploration,
appraisal, development and production assets in the Former
Soviet Union (FSU) and West Africa.
Currently our operated production is
around 10,000 barrels of oil equivalent
per day and our proved plus probable (2P)
reserves and discovered resources are
in excess of 340 million barrels of oil
equivalent (net).
Although we already hold a large portfolio
of discovered but undeveloped oil and
gas resources and a material exploration
inventory, we are continuously seeking
other growth opportunities both within
our current core areas of West Africa
and the FSU and more broadly in
Africa and elsewhere.
VITOL 67
68 VITOL
UPSTREAM
Business context
As demand for oil and gas rises, largely
driven by economic growth in the
developed world and the rapid maturing of
emerging markets, so the challenges
facing the upstream industry become
more complex.
Geographical proximity means that the
FSU states are increasingly meeting the
rising demands of European consumers.
Today, the FSU region holds 40% of the
world’s proven reserves of crude oil outside
of OPEC.
In our other major focus area, Africa, where
around 10% of the world’s oil is produced,
vast tracts of acreage remain under or
unexplored – both onshore and offshore.
Oil and gas activity is accelerating across
the region.
Vitol – through Arawak Energy and Vitol
E&P – has the right people on the ground,
in the right place, at the right time. We are
ideally positioned and resourced to make
the most of these new opportunities with
original thinking and decisive action.
Where we do it
Our assets in the FSU are managed by
Vitol’s subsidiary, Arawak Energy, which
provides all of our production today, is an
established and trusted operator of
onshore fields in Russia, Kazakhstan and
Azerbaijan, and has recently acquired a
40% stake in 16 licences in Ukraine. Our
other upstream unit, Vitol Exploration and
Production (Vitol E&P), focuses today on
offshore exploration and development in
West Africa, including Ghana, Cameroon
and the Ivory Coast.
Our people
Our upstream teams succeed because we
employ dynamic people with the ability to
spot opportunities and bring innovation to
bear in solving tough problems.
15
PRODUCTION, DEVELOPMENT AND
EXPLORATION ASSETS IN FSU
AND WEST AFRICA
200m boe
OF RESERVES AND DISCOVERED
BUT UNDEVELOPED RESOURCES
IN THE PORTFOLIO TODAY
VITOL
70 VITOL
VITOL POWERS THE
INDUSTRIALIZATION OF GHANA
Vitol’s E&P operations
in West Africa have
resulted in substantial
gas discoveries which
are destined to help
deliver a sustainable
future to the economy
and people of Ghana.
VITOL 71
> Vitol, in partnership with ENI and the
Ghana National Petroleum Company, is
creating a major infrastructure project
that will ultimately see the
development of sub-sea wells, offshore
platforms, pipelines and a gas
processing plant as well as storage and
export facilities.
> This high profile project will result in the
supply of gas to power stations that are
currently oil-fired and to other industrial
gas users.
> The benefits of this major new energy
hub include a reliable, constant source
of energy, the impetus to initiate new
Ghanaian industries with the provision
of cleaner energy at lower costs. This
will create new employment
opportunities for Ghanaians in the
building and operation of this energy
project and also facilitate the
development of new community
initiatives around the project.
72 VITOL
THE VITOL FOUNDATION
The qualities that make us a responsive, dynamic global
business also enable us to support long-term community
development projects and emergency humanitarian
response efforts around the world. We have the contacts
and network to help us identify need and we have the
flexibility, resources and reach to make a difference where
it matters most - in communities inhibited by persistent
poverty or overwhelmed by the consequences
of natural disasters or conflict.
VITOL 73
74 VITOL
THE VITOL FOUNDATION
The Vitol Foundation was established in
2006 by the Vitol Group to support projects
that promote better living conditions for
deprived children around the world.
We fund a wide and growing range of
initiatives focused on the needs of young
people and families, children without
parental care and young people living
with disabilities across the developing
world. These projects aim to help
marginalized groups and communities
access education, healthcare, improved
water and sanitation and to achieve
economic resilience by securing
sustainable livelihoods.
In addition to these longer-term projects,
we also support emergency response
efforts to help alleviate humanitarian
disasters. Our unique ability to release and
allocate funds with immediate effect
resulted in Save the Children awarding the
Vitol Foundation their Corporate
Emergency Partner of the Year Award
in 2011.
Photograph (Page 75): © Afrikids, Ghana
Today, we work with 200 charities
worldwide and each year we fund over 250
projects in over 60 countries. We liaise with
expert individuals and organizations
around the world, and our involvement
extends from hands-on volunteering for
our employees to influencing key decision
makers at government level.
Whether we are supporting projects to
improve health, water and sanitation,
education or livelihoods; promoting
environmental protection; organizing staff
involvement or acting quickly and
decisively to help deal with emergencies,
we take great care to ensure that our
actions and funding empower local
communities and promote sustainable
solutions to poverty reduction.
200
THE NUMBER OF CHARITIES
WE WORK WITH WORLDWIDE
250+
THE NUMBER OF PROJECTS WE FUND
EACH YEAR IN OVER 60 COUNTRIES
VITOL
76 VITOL
NETWORK LOCATIONS
VITOL
Designed,
Designed,
written
written
and produced
and produced
by CONNORGODDARD
by CONNORGODDARD
www.vitol.com