Vitol and Harvest Energy Announce Improved Terms For crude oil supply and refined product offtake agreement
Vitol Refining S.A (“Vitol”)and Harvest Energy Trust (“Harvest”) are pleased to announce that Harvest’s North Atlantic Refining Limited subsidiary (“NARL”) has renewed and extended its existing crude oil supply and refined product offtake agreement (“SOA”) with Vitol .
Similar to the terms of the previous agreement, Vitol will provide to NARL comprehensive working capital financing of feedstocks and finished products, including Letters of Credit, in-transit and in-storage inventories, and trade credit. Additionally, Vitol will provide feedstock procurement and shipping, finished product marketing and shipping, price risk management, administrative and back office services. The SOA will be effective beginning in November 1, 2009 for an initial period of 2 years, after which, it will automatically renew. The Vitol SOA replaces the existing agreement in place since Harvest’s acquisition of NARL in October 2006, and is based on more favorable financing charges, fees, and product sales prices. Further, the renewed SOA will provide for the inclusion of high sulphur fuel oil inventories and other amendments, which will increase the amount of working capital financing realized under this agreement.
The SOA also requires that Vitol Refining S.A. purchase and lift all refined products produced by the Refinery, except for certain excluded refined products to be marketed by North Atlantic in the local Newfoundland market. Also, the SOA provides that the ownership of substantially all feedstock and refined product inventory at the Refinery be retained by Vitol Refining S.A. and that during the term of the SOA, Vitol Refining S.A. will be granted the right and obligation to provide feedstock for delivery to the Refinery as well as the right and obligation to purchase all refined export products produced by the Refinery.
Vitol Refining S.A. is an indirect wholly-owned subsidiary of the Vitol Refining Group B.V which is part of the Vitol Group of companies.
With headquarters in Rotterdam, the Netherlands and Geneva, Switzerland, the Vitol Group has its primary trading operations in Houston, Geneva, Rotterdam, London and Singapore, which provide 24 hour coverage of all the world’s oil markets. The trading portfolio includes crude oil, oil products, LNG, natural gas, coal, power, carbon emissions, as well as ethanol, chemicals and methanol, non-ferrous metals and sugar. Vitol trades with all the major national oil companies, the integrated oil majors, as well as the independent refiners and traders.
In addition to its trading business, Vitol has 2 other key businesses. A storage and terminals business, Vitol Tank Terminals International (VTTI) with a number of major terminals including Amsterdam and Rotterdam, as well as a refinery and terminal in Fujairah, UAE and a new terminal in Port Canaveral, Florida, due to open in early 2010. The exploration and production business includes production from the Arawak assets in Kazakhstan, Russia and Azerbaijan, the Galoc joint venture in the Philippines and recent exploration activity in Ghana.