ENER G Y > 2013 > MEETING THE ENERGY NEEDS OF A RAPIDLY CHANGING WORLD Designed, written and produced by CONNORGODDARD

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1 ENERGY

2 > MEETING THE ENERGY NEEDS OF A RAPIDLY CHANGING WORLD

3 VITOL 01 CONTENTS VITOL 02 Welcome 04 A physical trader 06 Global reach 08 Local understanding 10 Speed & flexibility 12 Partnership 14 People, systems & liquidity TRADING 16 Introduction 18 Crude Oil 19 Natural Gas 20 Case study > ADDING VALUE TO USA REFINERIES 22 LPG 23 LNG 24 Case study > DOUBLING LPG SUPPLY TO NIGERIA 26 Naphtha 27 Gasoline 28 Gas Oil & Jet 29 Fuel Oil 30 Coal 31 Power 32 Case study > THE FUTURE OF COAL TRADING IN SOUTHERN AFRICA 34 Carbon 35 Ethanol 36 Case study > UTILITY ENERGY SUPPLY 38 Methanol 39 Chemicals 40 Metals and Minerals 41 Sugar TERMINALS, REFINING & SHIPPING 42 Introduction 44 Terminals 46 Case study > 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

4 GROUP PERFORMACE

5 Crude Oil 92 Gasoline & Naphtha 59 Gas Oil & Jet 51 Fuel Oil 24 Natural Gas 42 LPG 7 Other trading 28 TOTAL TCO2 EFFICIENCY E&P 69, tc02e/bbl Coal 101, tc02e/te coal Terminals* 96, tc02e/m3 Blue Knight 24, tc02e/m3 Travel 3,069 n/a n/a Offices 1, tc02e/ft2 TOTAL 296,238 0

6 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.

7 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. 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. 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. 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. 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. 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.

8 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 m+ OVER 5M BARRELS OF CRUDE OIL AND PRODUCTS TRADED EVERY DAY BY VITOL

9 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. VITOL

10 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

11 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.

12 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

13 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. VITOL

14 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 5,495 SHIP VOYAGES IN 2012 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 200+ portfolio of energy sector interests. SHIPS ON THE SEA AT ANY ONE TIME

15 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.

16 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

17 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. VITOL

18 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 CONSECUTIVE YEARS OF PROFITABLE OPERATION

19 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. VITOL

20 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.

21 VITOL 17

22 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. 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 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. 117m TONNES OF CRUDE OIL SALES IN m TONNES OF CRUDE OIL AND OIL PRODUCT SALES IN 2012

23 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

24 20 VITOL ADDING VALUE TO USA REFINERIES Vitol manages the supply chains to CVR Refining s Coffeyville and Wynnewood refineries in the USA.

25 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.

26 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 FLEET OF LPG TANKERS BUILT TO VITOL S SPECIFICATIONS

27 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.

28 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.

29 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.

30 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

31 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 ,000 APPROX. BARRELS OF PHYSICAL GASOLINE TRADED WORLDWIDE PER DAY BY VITOL

32 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. 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. 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. 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. 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. 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 % OF VITOL S ONSHORE GAS OIL AND JET STORED IN VITOL-OWNED TANKS

33 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

34 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

35 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

36 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.

37 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.

38 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. 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. 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 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. 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. 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

39 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 This programme now mandates a renewable content of 9.63% in all road transportation fuel, up from 9.23% in 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.

40 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.

41 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.

42 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 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

43 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

44 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

45 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 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.

46 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.