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Vitol

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Vitol
Company typePrivate
Industry
Founded1966; 58 years ago (1966)
Rotterdam, Netherlands[1]
FounderHenk Viëtor[1][2]
Jacques Detiger[1][2]
HeadquartersGeneva, Switzerland; Rotterdam, Netherlands [3]
Number of locations
Increase 40
Area served
Worldwide
Key people
Services
RevenueDecrease US$400 billion (2023)[5]
Decrease US$13 billion (2023)[6]
OwnerVitol Holding II S.A.
Number of employees
1,600 (2019)[7]
Websitevitol.com

Vitol is a Swiss-based Dutch multinational energy and commodity trading company that was founded in Rotterdam in 1966 by Henk Viëtor and Jacques Detiger.[1][2] Though trading, logistics, and distribution are at the core of its business, these are notably complemented by refining, shipping, terminals, exploration and production, power generation, and retail businesses. Vitol has over 40 offices worldwide, with its largest operations in Geneva, Houston, London, and Singapore.[8]

With revenues of $505 billion in 2022,[9] Vitol is the largest independent energy trader in the world, and would be the second-largest company worldwide as measured by revenue on the Fortune Global 500 list.[10] Given the secrecy Vitol maintains around all its business activities and the limited nature of its statutory disclosures,[11] it is excluded from rankings. The company, however, does provide some more financial information to its lenders and to a few other entities with which it trades.[12] The company ships more than 350 million tonnes of crude oil per year and controls 250 supertankers and other vessels to move it around the world. On average it handles more than 7.6 million barrels a day of oil and products,[9] roughly equivalent to the daily consumption of Japan, the world's fourth-largest oil consumer after the United States, China, and India.[13][14]

Vitol is a privately held company by about 400 partners who are current and former employees,[15] who are known for their intense culture of privacy and secrecy from both competitors and the general public.[16] It is reported that Vitol made a payout of $2.9 billion to all its partners in 2021.[17][18]

Activities

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In 2021, Vitol's revenues doubled to around $279 billion, after oil demand spiked after the end of pandemic lockdowns. In 2021, its website stated it traded 7.6 million barrels of crude and other oil products.[19] In 2022, Vitol Group said it would stop trading Russian crude and oil products by the end of that year.[19]

In 2024, it owned and operated five power plants in the UK through VPI, a partially owned subsidiary.[20]

In April 2024, it remained the world's largest independent commodity trader. It does not publicly release financial results, but in 2023, it reportedly made $13 billion in net profit, according to the Financial Times. It had made $15.1 billion in 2022, and $4 billion in 2021. In 2024, it had approximately 450 senior partners in London, Geneva, Singapore, and Houston. In 2022, it had shareholder equity of $25.8 billion.[20]

In early 2024, Vitol held a 10.4% stake in Saras S.p.A., the owner of the Sarroch refiner plant in Sardinia. That April, Italy's government partly approved Vitol's plan to take over the company for $1.83 billion.[21] State-run GAIL (India) Ltd. signed a 10 year import deal with Vitol in early 2024, for liquefied natural gas.[22]

Trading

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In addition to the global crude and product trading businesses, the company trades coal, natural gas, power, ethanol, methanol, gasoline, LNG, LPG, naphtha, bitumen, base oils and carbon emissions.[23][24] In 2023, Vitol was the world's largest independent energy trader.[25] The company confirmed in 2024 that it was expanding into metals, with the CEO calling it a "relatively small addition to our business." It had received net profits over $28 billion over the prior two years. It had previously, in the 1990s, had little success with metals trading when it purchased Euromin.[26]

Terminals and infrastructure

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In total, Vitol has around 16 million cubic meters of storage capacity across the globe.[27]

Vitol (45% stake), along with IFM Investors (45% stake) and Abu Dhabi National Oil Company (10% stake), own 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).[28] MISC Berhad held a 50% stake in VTTI from May 2010 until August 2015.[29] In April 2022, Vitol announced its intention to stop trading Russian petrol by the end of 2022 due to international sanctions during the Russo-Ukrainian War.[30]

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.[31]

Refining

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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.[32] Vitol also has invested in refining assets in Bayernoil (Germany), Cressier (Switzerland), Antwerp (Belgium) and the Geelong refinery near Melbourne (Australia). In 2018, Vitol bought the 85,000 barrel per day Rotterdam Condensate Splitter from Koch Industries.

Exploration and production

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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.[33] The business trades as Viva Energy, although the Shell brand remains on many of its retail products.[34]

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.[35]

Aviation

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Vitol Aviation is focused on Europe, North America and Africa, serving the world’s largest airlines and military customers with 5.7 million tonnes of jet fuel a year.[citation needed]

Power

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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.

Renewable

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In 2021, Vitol had 1.2 GW[9] of renewable power generation currently operational, planned & with further investments across the energy spectrum.

Figures

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In 2018, Vitol traded:[24]

  • Oil: 367 million tonnes of crude oil and product sales
  • Natural Gas: over 20 billion cubic meters of physical gas globally
  • LPG: 14 million tonnes
  • Naphtha: 15 million tonnes
  • Gasoline: 1 million barrels of physical gasoline traded per day
  • Coal: over 30 million tonnes
  • Power: 93 TWh of power sales contracted
  • Carbon: 49 mm tonnes of contracted carbon volume
  • Methanol: 1.4 million tonnes
  • Chemicals: 4 million tonnes (Benzene and Paraxylene)

Controversies

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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.[36] Vitol has denied all charges, arguing that no government agency has ever prosecuted the company in this respect.[37]

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.[38]

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.[39] 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.[40]

In September 2012, it was 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. It was also stated that Vitol is based in Switzerland, which did not implement international sanctions, so Vitol had skirted the charges.[41]

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.[42]

In 2018, The Dispute Settlement and Sanctions Committee of CRE, the French Energy Regulatory Commission, fined VITOL S.A. €5 million for engaging in market manipulation on the French Southern virtual Gas Trading Point (“PEG Sud”) between 1 June 2013 and 31 March 2014.[43] Vitol appealed this decision,[44] but the French Council of State confirmed the sanction in June 2021.[45]

In 2020, Vitol Inc. agreed to pay a combined total criminal penalty of $135 million to resolve bribery charges with law enforcement authorities in the United States and Brazil.[46][47] The resolution arises out of Vitol schemes to pay bribes to officials in Brazil, Ecuador and Mexico.[46]

In 2023, both Shell and Vitol were accused by Oleg Ustenko, the economic advisor to the Ukrainian president, of prolonging the war in Ukraine through exploiting a loophole in EU sanctions to bring products derived from Russian oil into Europe, through Turkey. Vitol, in April 2022, had pledged to cease trading Russian origin crude oil and product.[25]

Vitol Asia Pte Ltd

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Vitol Asia Pte Ltd operates as an energy and commodities company, and offers refining, trading, shipping, and storage of crude oil and energy products.[48]

The company was founded in April 1990 and is headquartered in Singapore. The CEO of this subsidiary has been Mike Muller since 10 September 2019.[49]

References

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  1. ^ a b c d "Meet The Mysterious Trading Firms Who Control The Price Of Commodities". BusinessNews. 2011-10-31. Archived from the original on 2012-04-27. Retrieved 2012-03-04.
  2. ^ a b c Schneyer, Joshua (2011-10-28). "Commodity Traders: The trillion dollar club". Reuters. Archived from the original on 2015-12-28. Retrieved 2012-04-11.
  3. ^ "Top ten global oil and commodities traders". April 15, 2011. Archived from the original on November 13, 2019. Retrieved May 21, 2019 – via www.telegraph.co.uk.
  4. ^ Hoffman, Andy and Blas, Javier. "Top Trader Vitol Has New CEO as Taylor Becomes Chairman" Archived 2019-07-28 at the Wayback Machine, Bloomberg, 15 March 2018. Retrieved on 16 March 2018.
  5. ^ "Vitol 2023 volumes and review". 26 March 2024. Archived from the original on 2024-03-26. Retrieved 2024-03-26.
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  21. ^ Italy sets conditions for Vitol's takeover of Saras, Reuters, 26 April 2024
  22. ^ India's GAIL Signs 10-Year LNG Purchase Deal with Vitol, Pipeline & Gas Journal, 5 January 2024
  23. ^ "Vitol, RNK Capital Complete Inaugural Trade on The Green Exchange" (PDF) (Press release). Evolution Markets Inc. 2008-03-17. Archived from the original (PDF) on 2011-07-10. Retrieved 2009-02-09.
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  25. ^ a b Lawson, Alex (19 February 2023), "Shell and Vitol accused of prolonging Ukraine war with sanctions 'loophole'", The Guardian
  26. ^ Vitol CEO confirms energy trading giant is getting into metals, Bloomberg, 2024
  27. ^ "Terminals and storage". Vitol. Archived from the original on 2021-01-20. Retrieved 2021-01-19.
  28. ^ VTTI. "VTTI - Terminals - Better placed". www.vtti.com. Archived from the original on 2019-06-03. Retrieved 2015-11-10.
  29. ^ Sheppard, David; Raval, Anjli (21 August 2015). "Vitol buys out oil tank partner's stake in VTTI BV for $830m". Financial Times. Archived from the original on 17 April 2021. Retrieved 15 April 2021.
  30. ^ "Vitol перестанет торговать российской нефтью к концу 2022 года" (in Russian). Интерфакс. 2022-04-13. Archived from the original on 2022-04-13. Retrieved 2022-04-13.
  31. ^ "Vitol buys stake in Grindrod's coal terminal". Archived from the original on 2012-01-22.
  32. ^ "UAE's Fujairah sells refinery stake to Vitol". Reuters. 2007-05-04. Archived from the original on July 17, 2012. Retrieved 2009-02-09.
  33. ^ Fowles, Shane (2014-02-21). "Vitol to retain jobs at Geelong refinery after buying Shell's assets". Geelong Advertiser. Archived from the original on 2014-02-24. Retrieved 2014-02-21.
  34. ^ "Viva Energy Australia". Viva Energy Australia. Archived from the original on 2015-09-01. Retrieved 2015-09-07.
  35. ^ Gadugah, Nathan (2015-01-27). "Gov't signs $7billion oil and gas agreement to produce 1100 megawatts power". Joy Online. Archived from the original on 2017-06-01. Retrieved 2015-09-07.
  36. ^ Barnett, Antony; Bright, Martin (2001-07-01). "Oil chief paid m to warlord". The Guardian. London. Archived from the original on 2014-05-10. Retrieved April 1, 2014.
  37. ^ "Controversial background of No campaign donor". HeraldScotland. 10 April 2013. Archived from the original on March 5, 2014. Retrieved April 1, 2014.
  38. ^ "Swiss Commodities Business May Be Revamped". Archived from the original on April 3, 2014. Retrieved April 1, 2014.
  39. ^ Schneyer, Joshua (2011-05-25). "US refiner Tesoro buys cargo of Libyan rebel oil". Reuters. Archived from the original on 2021-05-15. Retrieved 2021-07-05.
  40. ^ Blas, Javier (September 5, 2011). "Risky oil supply deal pays off for Vitol". Financial Times. Archived from the original on February 13, 2017. Retrieved April 1, 2014.
  41. ^ "Exclusive: Vitol trades Iranian fuel oil, skirting sanctions". Reuters. 26 September 2012. Archived from the original on 14 February 2016. Retrieved April 1, 2014.
  42. ^ "Oil trader Vitol in talks over tax-avoidance bill". 30 December 2012. Archived from the original on February 1, 2014. Retrieved April 1, 2014.
  43. ^ "The Dispute Settlement and Sanctions Committee (CoRDiS) imposes a penalty for market manipulations on the wholesale energy market". Archived from the original on October 20, 2018. Retrieved October 20, 2018.
  44. ^ "Vitol response to CoRDiS decision". Vitol. October 9, 2018. Archived from the original on December 15, 2019. Retrieved November 12, 2018.
  45. ^ "Council of State decision". Légifrance. June 18, 2021. Archived from the original on June 29, 2021. Retrieved June 29, 2021.
  46. ^ a b "Vitol Inc. Agrees to Pay Over $135 Million to Resolve Charges for Bribery Schemes in Latin America". www.justice.gov. December 3, 2020. Archived from the original on January 20, 2021. Retrieved January 18, 2021.
  47. ^ Tokar, Dylan (December 22, 2020). "Derivatives Regulator Uses Dodd-Frank Rule to Target Foreign Bribery". Wall Street Journal. Archived from the original on January 19, 2021. Retrieved January 18, 2021 – via www.wsj.com.
  48. ^ Lim, Hwee Ming. "Research Guides: Commodities: Commodity trading firms". researchguides.smu.edu.sg. Archived from the original on 2020-02-20. Retrieved 2020-03-25.
  49. ^ "Energy trader Vitol appoints Mike Muller new head of Asia trading". Reuters. 2019-09-10. Archived from the original on 2023-07-17. Retrieved 2023-07-17.
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