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Ingoe’s brand new Tasca tanker
Although still a young company, Rochdale-based Ingoe Oils has big ambitions. Liz Boardman spoke to managing director and company owner, Jordan Ingoe about establishing the business and his plans for future expansion.A learning curve
Having bought the Fern Street Depot and existing fuel business in 2009, former industrial boiler engineer, Jordan, has taken time to immerse himself in the industry before really pushing the company forward over the last twelve months: “I am brand new to fuels,” he admits. “The last three years have been a massive learning curve for me. Although I already held Class 1 and 2 licences I’ve had to gain the necessary health and safety qualifications and ADR training and take on more staff.”
In addition to long-standing yard manager, Chris Quint and sales manager, Stephen Gomersall, Jordan has recently taken on sales advisor, Janet Thornton and a full time tanker driver, Brian Leach, who is bringing many years of experience with him, freeing up his time and allowing him to concentrate on developing the business further along with his partner, Rebecca who is also director and company secretary. “Over the last few months we’ve had some stumbling blocks to overcome and I’ve been doing all of the deliveries, but now I have a full-time driver, I can really focus on moving the business forward and increasing deliveries over the winter.”
With 70,000 litres of storage in brand new tanks from UK Bunded Fuel Tanks, fuel is currently bunkered in by BWOC and Tate Fuels. However the company has now started pulling out of Manchester Fuel Terminal.
“Cultivating and nurturing a positive safety culture takes time and effort” says Jamie Elliott, human factors specialist, HFL Risk Services
Safety culture is essentially an organisation’s collective attitudes, values and behaviours towards safety. Put simply it is “how we do things around here” and in particular “how we do things around here when nobody’s looking.”
As companies working within the high hazard industries, oil and fuel operators’ safety policies are governed primarily by the COMAH (control of major accident hazards) regulations. Under these, operators are required to ensure that major accident risk potential remains as low as reasonably practicable. However, just because a company complies with industry safety regulations, it does not necessarily follow that it has a positive safety culture.
A staged progression – individuals, frontline workers, managers, directors and the board
Safety culture is often described as progressing through a series of stages. Early stages of safety culture maturity involve a focus on technical and procedural solutions to safety problems. When an incident occurs, the aim is often to find out who was involved.
As the organisation matures, managers increasingly realise that a wide range of factors cause accidents and that the root causes often originate from management decisions. This is where knowledge of human factors plays a key role. By understanding the individual, job and organisational factors that influence frontline workers’ performance, we can analyse individual human failures and determine what can be done to prevent them recurring. This moves the focus away from the individual who was in the wrong place at the wrong time, to look at what managers can do.
At higher levels of safety culture maturity, both frontline workers and managers co-operate proactively to prevent accidents and their root causes. So managers and frontline staff can drive safety culture from the bottom up by improving understanding of human and organisational factors throughout the organisation.
However, there is growing recognition that safety culture needs to be driven from the boardroom. Moreover employers in high hazard industries are increasingly being called upon to demonstrate organisational competence in process safety management. The UK Health & Safety Executive states that ‘Directors and boards need to examine their own behaviours, both individually and collectively’. Business leaders need to get out and talk to staff at all levels about process safety.
Setting Process Safety Performance Indicators (PSPIs) can be a structured way to do this. To be able to have these conversations, leaders need to have sufficient understanding of process safety including the root causes of accidents. If this is lacking then a first step is often to improve process safety competence at senior levels, not just in operations but also business support functions such as maintenance, HR, finance and quality at site and group level, as well as amongst non-executive directors.
Taking the time and effort to cultivate and nurture a positive safety culture will pay dividends not only in terms of overall site safety, but also in profitability since the two are very closely linked.
HFL Risk Services, which took part in last month’s Tank Storage Association exhibition and conference, offers nationally recognised qualifications for continuous improvement in process safety for senior managers and senior executives. www.hflrisk.com
European diesel and heating oil prices will be supported by a heavy autumn refinery maintenance schedule that is already prompting some interest to store product. But storage economics are looking uneconomic going forward, threatening thin cover for the winter, writes Chris Judge, senior products editor at Argus Media.
Whilst faltering economic growth in Europe in general, and in the UK in particular may improve diesel demand, the picture across Europe is still not encouraging for sellers.
The first half of 2013
Over the first half of the year diesel demand limped along, rarely achieving the margins sellers had hoped for at the start of the year, despite short episodes of market tightness. The weak demand in Europe is underlined by car sales that have been falling almost continuously for nearly two years, with supply boosted by refinery upgrades. More spot diesel volumes were expected from Spain and Greece, while Israel’s ORL started up a new 25,000 b/d hydrocracker at its Haifa refinery, Portugal’s Galp launched its own 43,000 b/d hydrocracker, and a slew of Russian refineries worked on expanded diesel production.
Nagging concerns over margins meant that European refineries – particularly those in the Mediterranean – continually trimmed output, keeping buyers on their toes, especially through the summer months.
Heavily reliant on imports
Refinery maintenance dominates on the supply side with weak motor fuel demand dominating on the demand side. A key source of winter diesel, Swedish refiner Preem’s 220,000 b/d refinery in Lysekil, Sweden, closed last month for six weeks of scheduled maintenance. Also on the docket for autumn works are Exxon’s 246,000 b/d refinery in Antwerp and unspecified units at BP’s 400,000 b/d Rotterdam refinery, and a variety of key Russian plants.
The UK is heavily reliant on imports from Europe following the closure of Russian product exports are expected to fall sharply from September to November as a result. The total capacity loss is forecast at 5.4mn t, with most of the cut coming in September-October, compared with 3.75mn t off line during the 2012 turnarounds.
Demand concerns persist. The seasonal downturn in driving and agricultural consumption is compounded by weak economic growth in Europe and forecasts that western Europe’s automotive market will not begin to grow again until at least 2019. That said, demand figures for the first half of 2013 were mixed. In much of northern Europe demand continues to grow, albeit at unspectacular rates – up 3% year on year in the first half in Germany and up by 2% in the first five months in Sweden. Troubled Mediterranean Europe saw drops of 6% in the first five months in Spain and 3.3% in Italy.
While traders and refiners expect the maintenance programme to provide support, it does not match the abrupt loss of 600,000 b/d of refining capacity with the insolvency of European refiner Petroplus early in 2012, when autumn premiums to the benchmark Ice gasoil surged to nearly $60/t and diesel’s crack spread against Brent surpassed $25/bl.
With the sale of all but one of the Petroplus refineries – the 146,000 b/d Petit Couronne in France seems doomed to permanent closure – most of the company’s former capacity is now back on stream. And, despite the general agreement that there is refining overcapacity in Europe, optimism over longer run prospects for diesel is driving plans for capacity additions; Italy’s ENI has already restarted its idled 105,000 b/d Gela refinery in Sicily. The company has also announced a €700mn investment plan, including diesel maximisation, in a bid to return the loss-making plant to profit.
Pete George, managing director, UK and Ireland marketing with Lindsay Grant, former manager, national sales, who will shortly be talking up a new role at Phillips 66’s Houston headquarters
Pete George, Phillips 66
“Phillips 66 plays a key role in providing a secure supply of petroleum products to the UK markets via its Humber Refinery. We are very pleased that the recent Energy and Climate Change Committee Inquiry: UK Oil Refining recognised the importance of oil products and UK refining to the UK’s economy. The report supported many of the recommendations that Phillips 66 made to ensure that UK oil refineries have a level playing field versus their international competition. In particular, the report recommended that:
Indigenous refinery production v inland market demand
Since 2000, diesel imports have risen from 16% of inland consumption to 44% and kerosene from 33% to 54%. By contrast, the share of motor spirit production exported has risen from 20% to 49% and that for fuel oil (including international marine bunkers) has increased from 55% to 95%. Exacerbating the motor spirit imbalance has been an increased import share, from 11% to 32%, which reflects the much expanded presence of the importing/wholesaling companies in the transport fuel sector (also a contributory factor in the rise of diesel imports).
Looking at the wider issue of import dependency, it is noteworthy that expert witness testimony to the recent Commons Energy & Climate Change Committee report was in broad agreement that a mix of domestically refined and imported products was essential for security of supply, the respective proportions being best determined by the market. So, the Committee advised DECC that, in its review, it should take an approach that reflects the integrated nature of indigenous refiners and importers as well as associated ancillary industries.
Is there substantive cause for concern?
Detailed below, the extensive physical infrastructure has been in place for many years, during which time it has been subject to much rationalisation. While enabling comprehensive market reach, it also has a commendable record of providing both security and continuity of supply, as well as helping the country to meet its compulsory stocking obligations.
The consequences, in terms of product supply dislocation, arising from disablement of the key Buncefield terminal in December 2005, bore testimony to the system’s resilience. That is not to say that there are not points of potential vulnerability; should there be loss of supply out of the Fawley refinery, the consequences for the South, the UK’s largest inland market region, are by far the most significant. The DECC review, to be completed by year end, is awaited with interest!
Reliable equipment ensures the safe delivery of fuels to Callow’s rural customers across Worcestershire, Herefordshire, Shropshire and Oxfordshire
Callow Oils new Lakeland tanker features discharge equipment from Alpeco.
Director James Callow chose Alpeco’s dry line metering system with TE550 unit which automatically closes the manifold before finishing the delivery and triggers an automated blow down of the hose when the delivery ticket is printed, minimising the possibility of contamination.
“We specify Alpeco for several reasons,” explained James. “The product range offers technical excellence and reliability at a competitive price, whilst the sales and design staff are always available to discuss another project with us.” The new truck joins the distributor’s extensive modern fleet which is all fitted with Alpeco products.
Adrian Baskott, Alpeco’s sales director, added. “I’ve long believed that good products almost sell themselves but that said, we never rest on our laurels. We invest a lot of time and money in developing better products and services. The company is also a great believer in training its staff to be responsive to clients’ needs. Long term relationships help enormously as we better understand the clients’ business and how they work. We are proud to have been nominated yet again to supply product for the latest Callow Oils delivery tanker.”
Oil customers should get their boiler checked annually by an OFTEC registered technician and fit a carbon monoxide detector in their home says OFTEC’s Malcolm Farrow
This year’s Carbon Monoxide Awareness Week starts next Monday. To reduce any risk of carbon monoxide poisoning, oil consumers are being urged to get their boilers checked by an OFTEC registered technician before winter sets in.
Drawbar+ – an innovative solution from Emco Wheaton
Drawbar + – a new innovative software package has been unveiled by Emco Wheaton.
Drawbar + automatically monitors product levels in individual compartments of tankers. Versatile and flexible, the software can simultaneously monitor levels within any additional multi-compartmental draw bar trailer which may be connected to and towed by a tanker mid application.
Ineffective monitoring of compartments can result in inaccurate distribution and product recognition at the point of delivery, potentially affecting profit margins and customer relations.
If a two-compartment draw bar trailer is connected to a tanker with four compartments, Drawbar + will immediately begin to monitor and display the product levels in all six compartments.
During loading, details are entered into the litre counter and compartment contents are displayed graphically and numerically. Drawbar + automatically displays the name, location and volume of the product in each compartment throughout transportation.
Helping with accurate distribution, the volume is recalculated throughout the delivery process and any retained product is displayed.
“Drawbar+ is testament to the way we’re always looking for innovative solutions to meet the needs of our customers. We’re very proud of the software as an upgrade that will help customers keep track of their product in even the most complicated circumstances,” commented territory sales manager, Tom Cunningham.
The Geos Group’s Barry Newton (l) with the Port of Blyth’s Martin Lawlor
The Port of Blyth and marine fuels supplier, the Geos Group, are to build a new fuel storage facility at the port’s Bates Terminal in Northumberland.
A laundering plant capable of producing more than 16.4 million litres of illegal fuel a year, and potentially evading around £10.6m in taxes and duty, has been dismantled by HM Revenue and Customs (HMRC).
Officers from HMRC, the Northern Ireland Environment Agency (NIEA) and the Police Service of Northern Ireland discovered the plant within a tank storage area in Crossmaglen, South Armagh and seized 73,000 litres of fuel. Two tankers, one transit van, and over and underground tanks were also seized, whilst 20 tonnes of toxic waste, which was also found at the site, is being dealt with by the NIEA.
John Whiting, assistant director, criminal investigation, HMRC, said: “Every illegal laundering operation typically generates tonnes of toxic waste, involving significant safety and environmental issues. As taxpayers and local ratepayers, not only are we missing out on the stolen tax that ends up the pockets of the criminals, we are also paying the substantial clean-up and disposal costs.
“Buying illicit fuel funds crime and supports and encourages these dangerous activities within our communities. The only winners are the criminals. I would urge anyone with information on fuel misuse in their area to contact our free telephone hotline on 0800 59 5000 and contribute to the fight against this criminality.”
A positive year for the company, despite challenging conditions says CEO, John Sutton
Suttons Group recently reported a 4.1% increase in revenue to £154.7m for the year ending 30th April 2013.
Despite adverse economic conditions in Europe and the US, the Group continued to grow as a result of its range of services and the geographical diversity of its operations. Sutton’s focus on efficiency and utilisation also led to operating profit growth of 7.1% to £8.4m.
The company’s UK division, incorporating road tankers, warehousing and drumming operations, saw growth from new and existing customers. The Group also replaced a number of its vehicles and road tankers, representing a considerable investment in the future development of the Road Tankers division.
CEO, John Sutton, said: “This last year has been positive for the Group. We have increased our turnover, margin and operating profit despite challenging conditions. We have also invested significantly in both our UK road tanker and international ISO tank fleets, ensuring our customers continue to receive the highest standards of service in the industry.
“Highlights of the year include new business wins and contract extensions for our UK Tankers Division, significant progress in Asia and an important contract for our joint venture Suttons Arabia.”
Trevor Seed (l) with Envirostore’s managing director, Richard Marsh by the new Firecheck tank
An innovative product to overcome the problem of installing tanks next to buildings and structures has been developed by two well-known oil tank manufacturers.
Justin Law with a Jaguar XJ220 – Morris Lubricants rises to another sporting challenge by producing a specific lubricant for Don Law Racing
In recognition of its long standing support for the Shropshire and Mid Wales sporting scene, last week Shrewsbury-based Morris Lubricants took the title of Employer of the Year in the annual Energize Awards.
Chairman of the executive board, Hervé Montjotin, reports an ‘encouraging increase’ in Norbert Dentressangle’s business activities
Norbert Dentressangle reported revenues of €2,959 million for the first nine months of 2013, up 2% on the previous year.
Hervé Montjotin, chairman of the executive board, said: “In line with expectations, Norbert Dentressangle is reporting an encouraging increase in its business activities for the first 9 months of 2013, primarily driven by a return to growth in the 3rd quarter.
“In particular, our Group is taking advantage of its now significant exposure to economies which are growing at a faster rate than that of France. The transport business returned to growth in the 3rd quarter. The logistics business reported robust growth which is accelerating thanks to a sound commercial momentum in its European markets, the launch of the businesses with our customer Danone in Saudi Arabia and in Russia, and the consolidation of Fiege’s businesses in Italy and Spain.”
Striving to continuously improve its product range, Alpeco has launched a new radio remote control system
Two new products to help improve operator safety and efficiency have recently been launched by Alpeco.NEW radio remote control system with integral digital counter
A robust handset incorporates a digital display which replicates the counter display of Alpeco’s vehicle mounted TE550 electronic register. This allows the operator to monitor delivery volume and gives stop/start and hi/low flow control of the meter, whilst supervising the delivery at the end of the hose.
The range of the new remote exceeds 200 metres and when outside its operating range, the handset display flashes. When delivery is complete and the electronic truck meter has printed a delivery ticket, the remote display on the handset automatically resets to zero.NEW ADTUBE additive applicator
This provides a simple, cost-effective means of dosing fuels with additive when it is not possible to dose directly into a customer’s storage tank. The applicator is available in both one and half litre sizes and can be filled with the correct ratio of additive for the fuel, when connected to the tanker product return spout.
Additive is then mixed with the fuel by recirculating within the compartment or drawn through the manifold during delivery to the tank. The applicator is purged clear of product by activating the product return blow down.
“Our programme of continuous development keeps us very much at the forefront of this industry,” said marketing director, Adrian Baskott. “We continuously strive to improve our product range – sometimes we tweak functionality, other times we launch new products or redesign existing ones, but the aim is always to improve safety and efficiency at all levels.”
An extraordinary year for Fairbanks
Fairbanks was recently crowned Business of the Year at an awards ceremony organised by the Lancashire Chamber of Commerce.
“This caps an extraordinary year – with a global contract from Shell leading to the creation of over 85 new jobs, doubling the size of the organisation in a short period of time,” said managing director, Bob Conlin. “We’re thrilled to have been recognised with this award.”
Fairbanks has also recently achieved ISO 14001 and OHSAS 18001 certification, following the development and implementation of a comprehensive occupational health, safety and environmental management system. The company’s commitment to recruitment, quality, training and development has also helped them to achieve a Best Companies Accreditation and the Gold award from Investors in People.
“We’re acutely aware of the challenging trading conditions facing our industry sector, for us as a service provider as well as for our customers. Thanks to the hard work, talent and commitment of our people we’ve been able to not only grow the business significantly but also give a career start to over 100 graduates in the last 18 months.”
A ‘balancing role’
From its early days in the late 19th century, the companies which we associate with the oil industry have become household names – Exxon, Shell, BP, Chevron, Total, etc. These vertically integrated international oil companies (IOCs) have been joined by state owned concerns, or national oil companies ( NOCd )- names such as Aramco, Kuwait Petroleum, IPC, NIOC, Petrobras, PDVSA, as well as Russian companies such as GazpromNeft, Lukoil and Rosneft. More recent additions have been the three Chinese giants, Petrochina, Sinopec and CNOOC.
Less well known and with a generally lower profile have been the oil trading companies. Their principal raison d’etre and continued existence has been in playing the critical role of balancing supply and demand, for both crude oil and refined products. The need for this role was heightened from the early 1970s, as vertically integrated supply chains became less secure and geographical imbalances began to emerge, in particular the growing US deficit in both crude oil and gasoline. In the 1970s/80s some of the activities of oil trading companies attracted controversy, and criticism e.g. Phibro (Tom O’Malley and Andy Hall) and Marc Rich (now absorbed into Glencore).
The sector is now dominated by 6 companies – Vitol, Gunvor, Trafigura, GlencoreXstrata, Mercuria and Cargill – all of whom are global traders in the wider commodities’ spectrum.
With the exception of Glencore, these are all privately owned companies and, in terms of scale, are very substantial operations. Taking the largest of the group, Vitol, which was established in 1966, its total deliveries of crude oil and refined oil products in 2012 amounted to 261 million mt, which exceeds the combined inland oil demand of Germany, France and Italy. Looked at from another perspective, it represents almost four times the UK’s 2012 inland oil consumption!
Tougher times
Recent years have seen oil trading becoming more competitive and the market more transparent; in addition, the environment for trading has often been unfavourable, being in a state of backwardation, with prompt prices higher than future levels, rather than contango, where future values are higher. The latter condition creates time-related arbitrage opportunities for traders. This less favourable environment is reflected in recent financial performance. Vitol’s reported 2012 net income was $1.05 billion vs. $2.28 billion in 2009. Gunvor’s reported 2012 net income was $318 million vs. $621 million in 2009.
How are they responding to this challenge?
As a sector, the principal response has been characterised by moves to invest in physical assets – such as oilfields, refineries, storage facilities and fuels/lubricants’ marketing businesses.
Vitol established a joint venture company with Helios Investment Partners, called Vivo Energy, in 2011, which acquired the majority share (80%) of fuels/lubes marketing businesses in 14 African countries from Shell ( which retained a 20% interest) and acts as a Shell brand licensee in these countries. The company has in recent years also established a presence in the aviation fuels market, now supplying a total of 2.5 million mt at 46 airports worldwide (including Heathrow, Stansted and Manchester). Last year it acquired the former Petroplus Cressier refinery in Switzerland, along with the associated pipeline, storage and marketing assets in a joint transaction with Atlasinvest.
Trafigura is the majority (80%) owner of Puma Energy, an oil marketing, storage and distribution venture, which is represented in Africa, Central America & Caribbean, Southeast Asia and Australia. Last year, Trafigura acquired Ion Equity’s stake in Blue Ocean Associates., parent company of Harvest Energy, and became joint majority owner of the company along with Denis O’Brien’s investment vehicle, Baycliffe.
In 2012 Gunvor acquired the former Petroplus refineries in Belgium (Antwerp) and Germany (Ingolstadt); crude oil processing operations have resumed at both plants, enabling the company to establish a footprint in the inland marketplace of both countries.
These are examples of diversification away from the core activity of oil trading, into activities where their established expertise and competencies can be applied to good effect and which are complementary with the principal, core business.
As the downstream oil sector continues to experience change, both to structure and ownership, I think that we will witness more instances of the oil trading companies spreading their wings to extend and expand their participation where attractive opportunities present themselves.