Vitol

Vitol Group of Companies
Private
Industry Commodity
Founded 1966 (1966)
Rotterdam, Netherlands[1]
Founder Henk Viëtor[1][2]
Jacques Detiger[1][2]
Headquarters Geneva, Switzerland
Area served
 Global
Key people
 Ian Taylor, CEO[3]
Services Energy trading, Commodity trading
Revenue Decrease US$ 270 billion (2014)
Owner Vitol Holding B.V
Number of employees
 7,500+ (2014)
Website www.vitol.com

The Vitol Group is a global energy and commodity trading company that was founded in Rotterdam in 1966 by Henk Viëtor and Jacques Detiger.[1][2][4] Though physical trading, logistics and distribution are at the core of the business, these are complemented by refining, shipping, terminals, exploration and production, power generation, mining and retail businesses. Vitol has almost 40 offices worldwide and its largest operations are in Geneva, Houston, London, and Singapore. With revenues of $270 billion in 2014, it is the largest independent energy trader in the world, and would rank eighth on the Fortune Global 500 list.[5] Because Vitol does not publish its profits widely, much like most of its competitors in commodity trading, it is largely excluded from rankings. But the company does provide financial information to its lenders and some energy groups with which it trades.[6] The company ships more than 270 million tonnes of crude oil per year and controls 200 supertankers and other vessels to move it around the world. On average it handles more than 5 million barrels a day of oil and products - roughly equivalent to the daily consumption of Japan - the world's third largest oil consumer after the United States and China.[7][8]

The company’s chief executive is Ian Taylor. Vitol is a private company which is owned significantly by a proportion of its employees, who are known for their culture of privacy and secrecy, from both competitors and the general public.[4] In 2014, it paid dividends to its 300 plus shareholders – mainly present and former core employees – of over $37.2 billion. When it comes to the financial industry’s richest and most risk-taking executives, few top those in the world of energy trading and especially at Vitol where the average pay is over $1.1 million.[9][10]

Activities

Trading

In addition to the global crude and product trading businesses, the company trades coal, natural gas, power, agricultural products, ethanol, methanol, gasoline, LNG, LPG, naphtha, bitumen, base oils and carbon emissions.[11][12]

Terminals and infrastructure

In total, Vitol has 17.9 million cubic meters of storage capacity across the globe.

Vitol is the sole owner of VTTI B.V., a storage and terminals business with a capacity of around 8.7 million cubic meters (MCM) in 11 countries: Netherlands (1.328 MCM + 1.118 MCM), Latvia (1.195 MCM), UAE (1.180 MCM), Belgium (0.965 MCM), Malaysia (0.893 MCM), Cyprus (0.544 MCM), USA (0.452 MCM), Argentina (0.218 MCM), Kenya (0.111 MCM), Russia (0.049 MCM), Nigeria (0.016 MCM).[13] MISC Berhad held a 50% stake in VTTI from May 2010 until August 2015.[14]

In January 2012 Vitol acquired a stake in a subsidiary of the South African shipping firm Grindrod, which gives it access to a coal terminal in Mozambique.[15]

Refining

In addition to offices in Dubai and Bahrain, Vitol's key strategic asset in the Middle East is the Fujairah Refinery Company Limited (FRCL), which operates an 82,000 barrel per day refinery and a 1,034,000 cubic meter tank farm. FRCL has further development plans in place, which include a 140,000 cubic meter expansion of the tank farm, refurbishment of existing refining units and the installation of additional processing units.[16] Vitol also has invested in refining assets in Bayernoil, Germany, Cressier, Switzerland, Antwerp, Belgium and the Geelong refinery near Melbourne, Australia.

Exploration and production

Vitol, through its wholly owned subsidiaries Arawak Energy Limited and Vitol E&P, has interests in various exploration and production projects worldwide. Arawak Energy is mainly focused on the FSU where it produces oil and gas in Ukraine, Kazakhstan and Azerbaijan, while Vitol E&P holds a portfolio of exploration and development assets along the West African Transform Margin in Ghana and the Ivory Coast.

In February 2014, it was reported that Vitol, in concert with the Abu Dhabi Investment Council, had bought the downstream businesses of Shell Australia (excluding aviation) for a total of approximately AU$2.9 billion. The purchase included Shell's Geelong Refinery and its 870-site retail business, along with its bulk fuels, bitumen, chemicals and part of its lubricants businesses in Australia.[17] The business trades as Viva Energy Australia, although the Shell brand remains on many of its retail products.[18]

Further in January 2015, Vitol in collaboration with Eni signed a $7 billion agreement with the government, for the production of oil and gas at Cape Three Points in Western Region of Ghana. The contract is expected to help meet Ghana's burgeoning energy needs.[19]

Aviation

Vitol Aviation is focused on Europe, North America and Africa, serving the world’s largest airlines and militaryers with 4.7 million tonnes of jet fuel a year into wing.

Power

In 2013 Vitol invested in its first power plant, VPI Immingham in the UK. The combined heat and power plant (CHP) is one of the largest of its kind in Europe, capable of generating 1,240 MW and up to 930 tonnes of steam per hour which is used by nearby refineries. The gas-fired plant provides approximately 2.5% of UK peak electricity demand.

Figures

In 2014, Vitol traded:[12]

Controversies

Vitol is involved in war profiteering in ISIS ruled areas and is financing ISIS indirectly by selling the oil to American markets. A 2001 article in the Observer stated that in 1995 Vitol had secretly paid US$1 million to Serbian war criminal Arkan to settle a deal with a Serbian Oil company, Orion.[20][21] Vitol has denied all charges, arguing that no government agency has ever prosecuted the company in this respect.[22]

In 2007, Vitol pleaded guilty to grand larceny in a New York court for paying surcharges to Iraq's national oil company during Saddam's regime and circumventing the UN oil-for-food program. Vitol subsequently paid $17.5 million in restitution for its actions.[23]

According to an article in the Financial Times, Vitol was the company to organise the first controversial sale of Libyan rebel oil to Tesoro Corporation in early April 2011.[24] According to the Financial Times, the company was approached by the Qatari national oil company to sell a cargo of crude oil supplied by the Libyans in exchange for technological supplies and fuel for the National Transitional Council of Libya.[25]

In September 2012, and article in Reuters alleged that the company had bought and sold Iranian fuel oil, bypassing an EU embargo against Tehran. Vitol bought 2 million barrels using a ship-to-ship transfer off the coast of Malaysia from a National Iranian Tanker Company vessel and sold it to Chinese traders. The article stated that as Vitol is based in Switzerland, which did not implement Western sanctions, Vitol had skirted the charges.[26]

In 2013, The Telegraph alleged that the company had been using for over a decade an Employee Benefit Trust, avoiding paying income tax for its UK staff.[27]

See also

References

  1. 1 2 3 4 "Meet The Mysterious Trading Firms Who Control The Price Of Commodities". BusinessNews. 2011-10-31. Retrieved 2012-03-04.
  2. 1 2 3 Schneyer, Joshua (2011-10-28). "Commodity Traders: The trillion dollar club". Reuters. Retrieved 2012-04-11.
  3. ↑ "Vitol Holding B.V.: Private Company Information". Bloomberg Businessweek. Retrieved 5 January 2012.
  4. 1 2 O'Keefe, Brian. "The unseen hand that moves the world's oil". Fortune. Retrieved 28 February 2013.
  5. ↑ "Rosco Announces Cash Offer For Arawak". Oil Voice. 2008-10-28. Retrieved 2009-02-09.
  6. ↑ Blas, Javier (19 March 2015). "Vitol Said to Post Highest Profit Since 2011 as Oil Prices Swing". Bloomberg. Retrieved 18 October 2015.
  7. ↑ Schneyer, Joshua. "Corrected: Commodity Traders: The trillion dollar club". Reuters. Retrieved 28 October 2011.
  8. ↑ Hume, Neil (19 March 2015). "Oil trader Vitol’s profits rebound to $1.35bn". Financial Times. Retrieved 16 October 2015.
  9. ↑ Armitage, Jim. "Vitol: Tough work but staff stay loyal due to huge bonuses". Independent. Retrieved 23 July 2014.
  10. ↑ Butcher, Sarah. "Two commodity trading houses where average pay is £750k+". efinancialcareers. Retrieved 15 April 2013.
  11. ↑ "Vitol, RNK Capital Complete Inaugural Trade on The Green Exchange" (PDF) (Press release). Evolution Markets Inc. 2008-03-17. Retrieved 2009-02-09.
  12. 1 2 http://www.vitol.com/trading.html Retrieved on April 1, 2014
  13. ↑
  14. ↑ Vitol buys out oil tank partner’s stake in VTTI BV for $830m
  15. ↑ Reuters Africa: Vitol buys stake in Grindrod's coal terminal
  16. ↑ "UAE's Fujairah sells refinery stake to Vitol". Reuters. 2007-05-04. Retrieved 2009-02-09.
  17. ↑ Fowles, Shane (2014-02-21). "Vitol to retain jobs at Geelong refinery after buying Shell’s assets". Geelong Advertiser. Retrieved 2014-02-21.
  18. ↑ "Viva Energy Australia". Viva Energy Australia. Retrieved 2015-09-07.
  19. ↑ Gadugah, Nathan (2015-01-27). "Gov't signs $7billion oil and gas agreement to produce 1100 megawatts power". Joy Online. Retrieved 2015-09-07.
  20. ↑ Barnett, Antony; Bright, Martin (2001-07-01). "Oil chief paid m to warlord". The Guardian (London).
  21. ↑ http://www.theguardian.com/world/2001/jul/01/balkans.warcrimes2 Retrieved on April 1, 2014
  22. ↑ http://www.heraldscotland.com/politics/referendum-news/controversial-background-of-no-campaign-donor.20752120 Retrieved on April 1, 2014
  23. ↑ http://www.thinkadvisor.com/2012/10/09/swiss-commodities-business-may-be-revamped Retrieved on April 1, 2014
  24. ↑ Schneyer, Joshua (2011-05-25). "US refiner Tesoro buys cargo of Libyan rebel oil". Reuters.
  25. ↑ http://www.ft.com/intl/cms/s/0/93aecc44-d6f3-11e0-bc73-00144feabdc0.html#axzz2xcoW8FSG Retrieved on April 1, 2014
  26. ↑ http://www.reuters.com/article/2012/09/26/us-iran-oil-sanctions-vitol-idUSBRE88P06C20120926 Retrieved on April 1, 2014
  27. ↑ http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/9771537/Oil-trader-Vitol-in-talks-over-tax-avoidance-bill.html Retrieved on April 1, 2014

External links

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