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Tuesday 12.12.2017 | Name days: Otīlija, Iveta

Vitol: this year will be challenging for the oil industry

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUVitol’s total traded volumes of crude and oil products grew 13% to 303 million tons in 2015. Unfortunately, the company’s revenue fell 38% to USD 168 billion.

A total of 6,629 ship journeys were carried out in 2015, compared with 6,053 ship journeys the year before, as reported by Vitol, owner of Ventspils nafta.

Sales of natural gas fell to 683 TWh (1,202 Twh in 2014). Electricity sales fell from 117 TWh in 2014 to 102 TWh in 2015. Sales of coal fell to 20 million tons in 2015 (34 million tons in 2014).

«Current market conditions are challenging. Whilst the market structure favours a physical trader, the absolute price levels and market volatility are causes for caution. Revenues, which are dictated by absolute prices as well as volumes traded, fell markedly – despite an increase in oil and product trading activity. Whilst opportunities in the physical market continue to exist, we are increasingly vigilant in respect of counterparty risk as current price levels will inevitably test some market participants,» – says Ian Taylor, President & CEO of Vitol.

According to him, «this current environment vindicates the extremely cautious approach we have long taken towards risk and debt. We believe it is prudent to continuously review both business lines and asset exposures, and we will manage the business conservatively in these uncertain times. For us, this means focusing on what we believe we do best – that is moving energy around the world – with a real attention to the careful management of each and every trade».

«Our downstream assets, in particular our refineries, performed well through 2015. However, the broader implications of slowing global growth and a rebalancing of the Chinese economy are likely to impact parts of the portfolio and we expect a slowdown in the rate of demand growth in some energy markets. Notwithstanding, we will continue to invest where the appropriate long-term opportunities arise,» – he continues.

«We were pleased to acquire the outstanding 50% shareholding in VTTI from MISC Berhad through our investment vehicle, Vitol Investment Partnership. During the five years of co-ownership VTTI evolved into a market leader with a total gross storage capacity of 8.7 million cubic meters and we will continue to invest and expand the company’s footprint,» – says Taylor.

«We expect this coming year to be challenging for the oil sector. Demand growth will be in line with long term averages, but below the high levels seen in 2015. Stocks of crude and products continue to build and these will weigh upon the market. In this context, we shall focus on adding value to our customers and seek interesting opportunities, whilst remaining mindful of increased risks,» – Taylor warns.

Founded in Rotterdam in 1966, today Vitol serves clients from some 40 offices worldwide and is invested in energy assets globally including; over 17.9mm3 of storage across six continents, 390kbpd of refining capacity and Shell-branded downstream businesses in 16 African countries, as well as Australia. Revenues in 2015 was USD 168 billion.

Ref: 102.109.109.6373


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