June 21, 2012:

ANTWERP, Belgium - Gunvor Group CEO Torbjorn Tornqvist this week visited the company's recently acquired refinery, Independent Belgian Refinery NV (IBR), to meet with management and staff and discuss continuing integration with Gunvor's operations. IBR, a former Petroplus asset, is now 100%-owned by Gunvor. Through the May purchase, Gunvor retained all 200-plus IBR employees; however, the Antwerp refinery is currently looking to hire new staff to support its operations, which are fully up and running. IBR had temporarily closed in January as a result of Petroplus' financial situation. For job inquiries, visit IBR's website. Gunvor is investing the required capital expenditure to maintain and improve IBR's current safety, operational and environmental standards. IBR has a processing capability of more than 100,000 barrels of oil per day, and storage capacity of more than 1.2 million cubic metres.

Gunvor's acquisition of IBR, along with the pending purchase of Petroplus' Bavaria refinery, is a part of Gunvor's strategy to diversify from being a pure trading operation. Gunvor is a market leader in trade, transportation, storage and optimization of crude oil, petroleum products and other energy products. Gunvor Group, one of the world's largest independent commodity trading companies by turnover, provides integrated trading products and logistics services for participants in the worldwide oil and energy markets. Headquartered in Cyprus, the company's main trading offices are Geneva and Singapore with a network of representative offices around the globe.

By Gunvor Group

June 21, 2012:

OAO Rosneft agreed to borrow as much as 100 billion rubles ($3 billion) for five years from VTB Group as it plans an oil refinery near Moscow and aims to develop projects with Eni SpA (ENI) and Statoil ASA. (STL). Igor Sechin, the head of Rosneft and Vladimir Putin’s former deputy prime minister for energy, signed a series of agreements today at the St. Petersburg International Economic Forum as the state-run oil producer expands transnational alliances and seeks to tap growing fuel demand at home. “All of these projects will be realized through our partnership with VTB and using the credit line,” Sechin told reporters today at the event. “The credit is for regional projects in Russia.” Rosneft may build an oil refinery in the Moscow region at a cost of more than $7 billion and with capacity of as much as 12 million metric tons a year, Sergei Shoigu, the regional governor, said at the forum. The company may also use the funds to help build an oil products pipeline from Rosneft’s Samara group of refineries, construct a petrochemical complex in Russia’s Far East and modernize refineries, according to Sechin.

Rosneft today also signed agreements with Eni and Statoil, bolstering accords reached in April and May. Statoil will get the right to help develop five fields with hard-to-recover resources in the Stavropol region of southern Russia, Sechin said. The companies also agreed in May to cooperate in the region and West Siberia, as well as four blocks in Russia’s part of the Barents Sea and in the Sea of Okhotsk, as well as in Norway’s offshore. Rosneft will grant Eni access to resources in the Arctic offshore and Black Sea, in exchange for stakes in refining and North African production assets, Sechin told reports after the signing.

By Bloomberg

June 21, 2012:

Motiva Enterprises 600,000 barrel per day (bpd) Port Arthur, Texas, refinery was shutting a catalytic reformer and a catalytic feed hydrotreater on Wednesday because of a lack of feedstock due to the shutdown of the 325,000 bpd crude distillation unit, said sources familiar with refinery operations. Motiva built a reformer, which creates gasoline additives, during the 5-year, $10-billion project in which the shut CDU was built. The reformer being shut was not built during the expansion project, the sources said. However, the hydrotreater being taken out of production was built during the expansion, which was completed in late 2011 and brought into production in the first half of 2012. The hydrotreater removes sulfur from feedstock going to the refinery's gasoline-producing fluidic catalytic cracking unit.

A Motiva representative was not immediately available to discuss refinery operations. The new crude distillation unit, which began production in April and was shut following a June 9 fire, may be idle for up to a year to repair extensive corrosion found in the unit after the blaze was extinguished. Motiva's Port Arthur refinery is not shutting the refinery's FCC, but will emphasize production of diesel, which is yielding higher returns for U.S. refiners as an export, the sources said.

By Reuters

June 21, 2012:

Lithuanian industrial production fell the most in 32 months in May as energy output plunged because of the closure of the Orlen Lietuva AB oil refinery for maintenance. Production tumbled 14.6 percent, the biggest drop since September 2009, compared with a 6.8 percent increase in April, the statistics office, based in the capital, Vilnius, said today in a statement on its website. Manufacturing excluding energy products grew 8.7 percent, compared with a 1.7 percent advance the previous month. The Baltic nation’s largest company by sales, Orlen Lietuva, the Lithuanian unit of Poland’s PKN Orlen SA, halted production for a month to carry out the biggest upgrades and repairs in the refinery’s history. Output resumed June 6. “The May results are somewhat reassuring because industrial output continues to rise” when the impact of the refinery is excluded, said Rokas Bancevicius, an economist at DnB Bank AB in Vilnius. The yield on Lithuania’s 2022 dollar bond fell 0.1 percentage point today to 4.8 percent, the lowest on record.

By Bloomberg

June 21, 2012:

Russian billionaire Gennady Timchenko wants his fast-growing oil trading house Gunvor to expand production and refining and get into other fuels to emulate top global players Glencore (GLEN.L) and Vitol. Gunvor bought its first oil refineries in Europe this year and Timchenko, a co-owner, said it would expand further both abroad and at home. He denied he had fallen out with Igor Sechin, Russia's former top state energy official who now runs its biggest oil firm Rosneft. "Like other big trading companies we are gradually turning into, if not a fully vertically integrated company, then something very similar," Timchenko said in a rare interview. The world's top commodities trader Glencore, started by oil trader Marc Rich as a pure merchant business, has grown into one of the world's largest oil, coal and metals conglomerates, and last year raised over $10 billion in a public share offering. Gunvor has achieved even more spectacular growth, with annual revenues rising to over $80 billion from just a few billions over the past decade. Several Russian opposition figures have suggested the rapid rise was due to close ties between Timchenko and President Vladimir Putin. Both men have denied the allegations, with Putin saying he had known Timchenko a long time but denying he ever helped him build the Gunvor empire. Timchenko has given only a couple of interviews over the past decade. He says he will have to put up with the idea that speculation will continue to surround him for years. "What can I do about it? I have to live with it ... I think it is unlikely to change in my lifetime," the billionaire, wearing a classic dark suit, said in the lobby of a luxurious hotel in St Petersburg.

Putin's home town is hosting the annual International Economic Forum, the country's main show for foreign investors, and several top Russian bankers and businessmen came to shake hands with Timchenko during the interview. "At some point I read Vladimir Vladimirovich (Putin) has a 75 percent stake in Gunvor. What a lot of nonsense!" said the silver-haired Timchenko, who kept a very low profile until a few years ago. Gunvor's shareholding structure has not changed over the past years, he said, adding that he himself owned just over 46 percent, chief executive Torbjorn Tornqvist 46 percent and management the rest. Gunvor generates net profit of between $300-$400 million a year on revenues of around $86 billion, Timchenko said. By comparison, the world's top trader Vitol had revenues of $297 billion in 2011 and No.2 trader Glencore had revenues of $186 billion.

NO DISPUTES WITH SECHIN

Timchenko has both Russian and Finnish citizenship and the Geneva-based firm has for several years been a leading exporter of Russian oil under term deals with companies such as state-owned Rosneft (ROSN.MM), and private Surgut and TNK-BP. At one point Gunvor handled as much as 40 percent of the overall seaborne exports of the world's largest oil producer. But over the past two years it has ceded its leading role to Royal Dutch Shell (RDSa.L) and Glencore, prompting media speculation that Timchenko had fallen out with Putin's main energy negotiator Sechin. "We have neutral, normal, working relations ... The newspapers are writing that we are quarreling - it is wrong. We don't have any problems," said Timchenko. He also said Gunvor was not yet ready for very large acquisitions. The comment followed market speculation Timchenko could try to buy 50 percent in TNK-BP (TNBP.MM), Russia's No.3 oil firm, after British oil major BP (BP.L) put it up for sale amid a dispute with its partners, a consortium of four Soviet-born billionaires.

"It (TNK-BP) is a very big company, we are not ready for such big purchases, we did not even discuss this subject," Timchenko said. "We have become active in buying oil refineries now as we think that now is the right time to enter oil refining." Gunvor has this year bought bankrupt Swiss oil firm Petroplus's refinery in Ingolstadt, Germany, and a plant in Antwerp, Belgium. Timchenko said Gunvor may look at other "interesting possibilities" if they arose and would expand into coal and other energy industries. "But from the point of view (buying) large companies - we are not ready. It is too early for us, we need to grow further first," the billionaire said.

By Reuters