Market & Supply 71
Moody’s Investors Service has changed the rating for Total SA from stable to negative.
The move reflects Moody’s concerns that significant investment in Total’s upstream business since 2010 has constrained the recovery in its credit metrics, despite buoyant oil prices.
Figures from June 2012 showed that upstream investments from the previous 12 months amounted to $26billion, compared to $15billion in the 12 months prior to June 2010.
This increased capital spending includes Total’s growing involvement in major long cycle projects, such as shale gas, and the formation of new partnerships with independent exploration and production companies. This has resulted in a higher allocation of capital towards unproved, not yet producing assets.
However, on a more positive note, ‘Moody’s expects Total’s operating cash flow to benefit from the start-up of several upstream projects, which should help raise production to around 2.7million barrels of oil equivalent per day by 2015, and yield barrels of a higher margin.
Community Buying unLimited has teamed up with Cornwall Together, which unites the power of the county’s major employers to negotiate with energy companies to achieve the best deals on oil, gas and electricity.
The model, conceived by the Eden Project and launched in late July, includes Cornwall Council, Cornwall NHS, St Austell Brewery, CEP and Unison.
Community Buying unLimited, which is set to manage the oil side of the negotiations, is hopeful of rolling the system out across the rest of the UK very quickly. Founder, Chris Pomfret, hopes that this will help the oil supply industry to keep track of when customers are likely to order more oil, preventing shortages for buyer and supplier.
The model is based on businesses being connected together by Smart Meters, which allows users to keep track, via the internet, of their own energy levels and current information about prices and supplier levels.
However, Kevin Bennetts, owner of Consols Oils, said: “Community Buying unLimited claims to be about to revolutionise oil sales and sort out dishonest inefficient oil suppliers. But to deliver oil you need tankers, and the company doesn’t have any. While he sits and thinks, we are investing heavily in order to serve our customers better.
“Smart meters will see future orders go to the most suicidal quote from a firm that is desperate for work.
“Family firms like Consols Oils work in clearly defined areas where they are part of the community they serve, and have been built up through hard work and dedication. Our biggest asset is our loyal customer base.”
Fuel Oil News will be looking at the scheme in more depth in the magazine, and will be looking for comment from distributors. To comment, please email alex@fueloilnews.co.uk
Following OFT action, GB Oils, the largest supplier of heating oil in the country, has changed its domestic heating oil contracts ensuring quoted prices do not increase from the time an order is made until the customer is billed on delivery.
When a consumer orders from a supplier, ‘spot’ prices are quoted that reflect the current market price of oil. The OFT has today secured legally binding undertakings from GB Oils to change its terms and conditions ensuring prices quoted at order remain fixed until delivery.
The action follows on from its 2011 Off-Grid Energy Market Study, which identified concerns that some suppliers may not be treating their customers fairly.
Mary Starks, senior director in the OFT’s services, infrastructure and public markets group, said: “Customers need to know where they stand when they are dealing with suppliers. The action we have taken will allow consumers to buy with confidence, even during periods when the weather is snowy, and prices are changing rapidly.
‘This adds to a body of enforcement work the OFT has undertaken to ensure that users of off-grid energy are treated fairly by suppliers.”
Other action taken in this sector includes securing voluntary changes to the content of misleading websites, and voluntary agreements from the major liquefied petroleum gas (LPG) suppliers, to improve transparency around switching and cancellation rights.
Mabanaft has sought feedback from customers to gain a deeper appreciation of their wants, and to focus on developing services for further improvement.
The company recently conducted an online survey, and results found that, in addition to price, customer service, continuity of supply, accuracy of invoicing and efficiency of loading times were rated as being of key importance.
Mabanaft was delighted that almost all participants rated them as above average across all of these areas, with 95% rating their customer service as very good or excellent and more than eight out of ten marking continuity of supply, efficiency of loading times and accuracy of invoicing as very good or excellent. The company also achieved a resounding vote of confidence in the quality of advice and expertise that they provide to customers, with 86% saying they found it to be very good or excellent.
Stephen Rhodes, marketing manager, said: “I am extremely pleased with these results as they confirm that we are delivering on the things that matter most to our customers. I am also thrilled with some of the comments we received and proud of my team for delivering such high levels of service. We will now be looking to address any areas where customers feel there is room for improvement.”
www.mabanaft.co.uk
Jet is running a special sports and fitness promotion this summer, encouraging customers to enjoy a broad range of exciting activities. The campaign is set to run until October 31.
Vouchers will be handed out to customers through the Jet Distributor network, and redeemable on the Jet-Local.co.uk website. One voucher will be distributed per transaction until October 31, set to be redeemable up to September 2013.
During an Olympic summer when the country has embraced a wide variety of sports, the Jet Active promotion includes deals on swimming, golf, and martial arts. Free lessons and discounts are also available on experiences such as paintballing and holiday club visits.
Additionally, in partnership with Blockbuster, customers will be offered a five week trial of the two DVD Unlimited plan, so they can look forward to a film on the sofa after a busy day of sports.
People taking advantage of the deal will be encouraged to try a variety of experiences, with customers only allowed to redeem their voucher once at a specific venue.
www.jetactive.co.uk
Supporting customers and adding value is MabaLIVE’s online price information and fuel ordering service
This is a time of unprecedented change for the downstream sector, with numerous factors conspiring to make this one of the toughest operating environments ever seen, says Mabanaft.
“With over capacity and falling consumer demand throughout Europe prompting international oil companies to focus on upstream sectors, re-organisation and disinvestment has resulted, not least in refining and marketing in the UK,” said marketing manager, Stephen Rhodes. Increased wholesale prices
“Downstream fuel prices remain high, with governments looking to raise revenues through fuel duties and other fiscal measures. And investors are looking to place available funds into safe, secure commodities – such as oil – resulting in increased wholesale prices. Add to this fluctuating exchange rates, inflationary factors, political unrest in the Middle East, recession within the Eurozone, and a global economic slowdown – all are bolstering volatility,” added Stephen.
Mabanaft has found that the current economic climate, combined with the high price of oil, has resulted in limited credit availability for all industry participants. Suppliers are operating on lower stock holdings, which have the potential to impact on the prevailing cost of compulsory stock, leading to increased prices for consumers.
“And the volatility of the biofuels blending markets, coupled with rigorous audit and sustainability requirements, are adding yet more costs to doing business,” adds Stephen.How is Mabanaft countering such difficult circumstances?
Vast experience, and a thorough understanding of the fuel oil distribution market means that Mabanaft can offer valuable support and advice on purchasing fuel.
“Innovation is key to delivering added and new value, and MabaLIVE, our online price information and fuel ordering service, is a good example of this,” says Stephen. “It provides immediate pricing information, enabling customers to make informed purchasing decisions and order fuel quickly and easily.”
Mabanaft is also exploring new market sectors and ways of working with customers to meet specific requirements. This includes developing new methods of delivering fuel to market, as well as improved products.Building relationships and meeting customer expectations
“We’re committed to understanding what our customers want – and we go out of our way to deliver. We are currently implementing a feedback survey to gain a deeper understanding of exactly what our customers value, and to ensure that we are meeting expectations.
“Credit lines and pricing structures are of critical importance in the current environment and Mabanaft is providing a range of options to enable customers to minimise price risk and exposure to price volatility.
“We support customers,” adds Stephen. “And this includes delivering the basics accurately and efficiently – competitive pricing, accurate administration and a robust and reliable operational service.” www.mabalive.com
The new Cardiff facility is rail fed enabling more efficient fuel movements between terminals
Despite a declining market, Greenergy has continued its rapid growth over the past 12 months – supplying 10.9 billion litres of fuel during the company’s financial year, ending April 12th – one billion litres more than the previous year, an increase of more than 10%.
“We’ve experienced growth in all areas of our business and in all locations,” Greenergy chief executive, Andrew Owens, told Fuel Oil News. “In particular, we’ve seen strong growth in diesel sales at Teesside following the administration of Petroplus, which brought their exit from nearby storage terminals. We’ve also experienced increased sales volumes for both petrol and diesel in the south east due to interruption of supply at Coryton. Operationally the business has coped well with this additional demand.”
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The demanding market conditions of the past 12 months have presented Prax Petroleum with a series of challenges and opportunities. However, the Surrey-based independent oil importer and supplier of automotive and industrial fuels company is “very much on track” to meet its ambitious growth targets.
Sales director, Neil Robertson, explains: “Prax Petroleum has continued to develop its business, making significant gains in contracted and spot sales. The uncertainty surrounding our close neighbour, Coryton refinery, has undoubtedly presented all Thames-based wholesalers with further opportunities.
“Changes to the Renewable Transport Fuels Obligation (RTFO) legislation have presented the market with more challenges and opportunities, and there is still a degree of uncertainty as to how this will affect future strategy. We are very proud to have been the only company in the country to have met the government objective of over 80% of fuel supplied meeting a qualified environmental standard (Year 3 RTFO Report published by the Department of Transport). We have always been mindful of our environmental responsibilities and our efforts in this regard are increasingly appreciated by our customers.”
Upgrades and improvements
Prax has completed several upgrades and improvements to its loading racks during the last 12 months, which have resulted in significantly faster loading times – warmly welcomed by the company’s ex-rack customers, says Neil.
“As a result of customer demand, we are now exploring opportunities to expand our supply coverage and bring the benefits that our customers in the south east have enjoyed to other parts of the country.
“Our strategy remains focused on being able to offer our customers access to imported fuels with the lowest possible associated costs. By keeping overheads low, with no compromise on quality and safety processes, and listening to what our customers want, we are making very good progress towards meeting that objective. We shall, of course, keep Fuel Oils News readers duly apprised of developments!” concludes Neil.
www.praxpetroleum.com
Harvest Energy provides more than 10% of the country’s motorfuel requirements – equivalent to more than 80 million litres every week to its ever growing customer base.
The company is part of the Blue Ocean group of companies, one of Europe’s largest independent suppliers and blenders of motor fuels, with operations in the UK, Holland, Germany, France and the Baltic.
In the UK, the company is a major supplier of diesel, 10 ppm gasoil, and petrols from northern Scotland to Cornwall, making more than 250 deliveries each day. Customers include oil companies, supermarkets, distributors, logistics providers, bus and rail operators, utilities companies, and a wide range of public sector bodies including Royal Mail, MoD and more than 60 local authorities. Harvest is also one of the largest suppliers into the Keyfuels and UK fuels bunker networks.
More retail filling stations
The company is one of Britain’s fastest growing fuel brands, and now supplies more than 100 retail filling stations nationally, most of which are under the distinctive Harvest Energy brand.
Since April, Harvest has taken on the distillate storage facilities at Seal Sands on Teesside, complementing its existing facilities in Grangemouth and West Thurrock, and is actively looking to expand its sales of diesel and 10 ppm gasoil in this area.
“With competitive prices, reliable supply, and excellent service on both a contracted and spot basis, collected or delivered-in, and now with a full vendor managed inventory solution, Harvest Energy is well-placed to expand its portfolio of customers,” says the company.
www.harvestenergy.co.uk
World Fuel Services Corporation is a global leader in fuel logistics, specialising in the marketing, sale and distribution of aviation, marine, and land fuel products and related services. Through its global team of local professionals, it offers single supplier convenience: competitive product pricing, trade credit availability, price risk management, logistical support, fuel quality control and fuel procurement outsourcing.
In the UK, World Fuel Services supplies refined petroleum products, alternative fuels and related services to industrial, commercial and agricultural consumers. World Fuel Services aims to provide an alternative to the traditional fuel suppliers by offering risk management services and alternative pricing options along with the supply of fuel. It supplies both regular commercial grades of fuel and speciality fuels via a network of locations throughout England and Scotland.
Speciality fuels are sold under the Henty brand. These products, which include Furnaceflame Industrial Gasoil, are designed to meet specific industrial applications as competitive alternatives to kerosene, gasoil and fuel oil.
A greater number of supply options
World Fuel Services has expanded its supply base in order to provide its services across a broader geography. Peterhead was added to the list in late 2011. Immingham and Midlands supply options have been added in 2012.
Further supply expansion is under way, with a £10+m investment at itsFalmouthterminal, and a renewed commitment at Simon Storage in North Shields, where the rack loading facilities are being upgraded.
In these times of uncertainty and risk, World Fuel Services aims to provide both physical supply, pricing alternatives and price risk management strategies that others do not offer. Contact the land team on 0207 808 5137.
www.wfscorp.com
A captain’s eye view of the M. T. Lerrix
It was a day of celebration on the waterfront of Hull at the end of May when members of the Rix family, and their colleagues from heating oil and commercial fuels specialists, J.R. Rix & Sons, and sister company, Maritime Bunkering, witnessed the launch of the latest vessel to join the Rix Shipping tanker fleet.
As maritime tradition dictates, a bottle of champagne was smashed against the distinctive green hull of the 1254 ton ship as she was named the M.T. Lerrix by Lucinda Rix, daughter of company chairman, John Rix. The name “Lerrix”, explained John, comes from Lucinda’s initials (Lucinda Emily Rix), coupled with the company convention of having the letters R,I,X, ending the six-letter name of all its ships.
Watching on, as special guests at the ceremony – held at the Dunston Shipyard at Hull’s William Wright Dock – were more than 70 customers, suppliers and employees of the company. Lord Haskins, chairman of the Humber Local Economic Partnership, responded to John Rix’s speech on behalf of the guests, congratulating his company on its continued success in a difficult economic climate.
The new ship – which will be used for bunkering along the east coast of the UK, from Leithto Harwich – has an overall capacity for 1100 tons of oil in four tanks. The 53-metre-long vessel is equipped with two Blackmer rotary vein pumps, each capable of delivering 238 cubic metres of fuel per hour, and one Blackmer rotary vein pump with a capacity of 63m3 per hour.Maritime tradition
nextgen takes place at Stoneleigh Park in Warwickshire from 10-11 October, and together with ebec, the UK’s largest bioenergy show, and microgen, a show serving small-scale (sub-50kW) power producers, has become the UK’s fastest growing event showcasing a full range of emerging renewable energy technologies.
With the trio of events combined at one location, nextgen makes it easier for visitors to retrieve relevant information and to establish business connections. Installers, engineers and renewable energy producers, will mingle alongside managers in the public sector dealing with energy efficiency, farmers and land owners or supervisors managing food processing and waste.
Besides hosting a major international exhibition, nextgen features a multi-stream conference which will take place in six CPD accredited seminar theatres.
For more information and to register for your free place visit www.ebec.co.uk
Essar Oil UK has entered into new arrangements with Barclays Bank plc to cover the supply of crude oil to its Stanlow refinery.
Under the new arrangements, Barclays will hold the inventories of crude oil and petroleum products at Stanlow and will supply crude to the refinery in line with its requirements.
The new arrangements allow Essar Oil UK to repay its existing working capital revolving credit facility, provided by 13 banks. In addition, they allow Essar Oil UK to cut its costs by reducing its crude oil inventory holdings and also permit greater operational flexibility. The customer relationships and product sale processes will remain with Essar Oil UK. These arrangements with Barclays are for three years and take effect immediately.
Volker Schultz, chief executive officer of Essar Oil UK, said: “This transaction with Barclays is an important landmark step for Stanlow. We have built a strong working relationship with Barclays, allowing us to continue delivering a high level of service to our customers, but in a much more efficient manner. The change is fully in line with our strategy to maximise efficiency, to substantially improve margins and to ensure that the refinery can thrive in all market conditions.”
Essar Energy completed the purchase of Stanlow, the UK’s second largest refinery with a capacity of 296,000 barrels per day, from Shell on July 31, 2011.
Workers at the Coryton oil refinery in Essex gathered with their families at Purfleet on 21 and 22 July, to protest against the closure of the refinery and the subsequent loss of more than 800 jobs.
The site is set to be operated as a storage terminal by Greenergy, Shell UK and Vopak, but angry workers believe the government ignored other potential buyers who would have kept the refinery open.
Unite Union national officer, Linda McCulloch, said: “There are some major questions to answer over the sale of Coryton. We know there were serious bidders to keep the refinery going, but have yet to get satisfactory answers as to why they failed. Our fear is that Vopak, Shell and Greenergy were waiting in the wings and that it was a done deal for some time.”
But the three companies are set to invest “a substantial amount in the site to develop it as a state-of-the-art import terminal”, said energy minister Charles Hendry.
He added: “The construction and operation of the terminal should also create significant economic activity in the region over the next two to three years.”
But workers claim that the sale will cost the local economy around £250m.
Cutting the ribbon to declare the new depot open for business
Pace Fuelcare opened a new depot in Ransomes Business Park, Ipswich, on July 24 to ensure a reliable supply of quality fuel for commercial, agricultural and domestic customers across south east Anglia.
Key figures at Pace Fuelcare’s parent company, GB Oils, including Sam Chambers, chairman, Paul Williams, director, Simon Willis, general manager, and Keith Durrant, regional manager, teamed up with Ipswich MP, Ben Gunner, and Mayor of Ipswich, councillor Mary Blake, to cut the ribbon and officially declare the depot open for business.
Over £2 million has been invested in the state-of-the-art depot, which offers a range of modern facilities to its customers, including the latest tank gauging systems and safety features, as well as a comprehensive choice of quality fuel and lubricants.
It will also support the creation of up to 25 jobs in the area, and a further 30 jobs within the finance, marketing, health and safety, supplies and transport divisions of GB Oils, together with a number of sales vacancies.
Simon Willis said: “The opening of the new depot highlights our commitment to support customers and businesses across the region, both in terms of fuel delivery and through business contracts with local suppliers in the immediate area. Following the closure of the Vopak Terminal two years ago, the new depot will be the only fuel terminal servicing south east Anglia, providing customers with a secure supply and dependable delivery of fuel.”
www.pacefuelcare.co.uk
The Federation of Petroleum Suppliers (FPS) is introducing a new Fuel Certification scheme to improve the quality of fuel oil and raise quality standards in the industry.
The new initiative will be responsible for the quarterly testing of kerosene, gas oil and diesel storage tanks for particulate, water content and biological contaminants. The tests will allow the FPS to accurately predict trends in fuel quality and help its members improve quality standards across-the-board.
FPS chief executive Mark Askew said: “Those accredited under the scheme will be able to rectify potential fuel problems early, allowing for quick and inexpensive remediation to take place for any issues found during testing. Moreover, the new scheme will provide mitigation against claims from customers for ‘faulty fuel’, which may be caused by the customer’s storage or buying patterns.”
The member price to join the scheme is £1000 per tank per year, but the first 30 member depots to sign up will receive a discount of £200 per tank for the first year. Non-members wishing to join the scheme will be charged £1500 per tank per year.
http://www.fpsonline.co.uk/
OFTEC has launched a new consultancy service, which has already provided independent reports on oil heating systems at a school, police station and several private residences.
Developed in response to customer demand, and designed to meet individual needs, the flexible service offers on-site assessments to ensure compliance with Building Regulations and industry codes of practice. A detailed, illustrated report is provided with recommendations for any work that is required to make the installation compliant.
In some instances, OFTEC is called upon to provide an impartial assessment as part of a dispute; for example a bad installation by a rogue trader, or where a tenant has caused problems themselves.
OFTEC’s technical director Paul Rose said: “The new service is designed to be flexible and can be tailored to suit the particular requirements of the client. We will also be working closely with Local Authority Building Control (LABC) to provide additional expertise when required.”
OFTEC can also provide advice on major system upgrades such as help with preparing tenders, and evaluating submissions.
http://www.oftec.org/
Cameron Forecourt’s new fuelling site installation and web-based management system is helping Malvern Hills District Council keep tighter control on fuel supplies and achieve greater efficiency.
The council’s transport team is already benefitting from more accurate management information on fuel movements, stock levels and vehicle performance after the turnkey package was installed earlier this year.
The system comprises a new three-compartment above ground tank for diesel, gas oil and Ad Blue; three new pumps in a security cabinet, and Cameron’s Eclipse web-based fuel management system.
Cameron Forecourt also installed aTLS2 tank gauge and environmental monitoring system, together with a bund alarm, spill kits, lighting and electrical system.
Danny Healey, transport and logistics manager, explained: “The old installation presented a risk that we might have a leak at some stage and lose fuel, together with the potential detrimental effect on the environment. The capacity of just 5,000 litres of diesel meant we had a maximum of one week’s supply on site at any one time, which made us vulnerable to any industrial action or other disruption to supplies.”
The new tank has a 15,000 litre diesel capacity and 2,000 each for gas oil and Ad Blue.
Using the system to monitor vehicle performance, adaptations have been made to increase fuel efficiency. Danny explained: “We have made changes which include the introduction of magnetic devices to the fuel supply on the vehicles which we hope will increase efficiency by 10-12 per cent.”
The link to the monitoring system and safety alarm means the council are in a position to act immediately in the event of a leak or spillage.
www.cameron-forecourt.co.uk
Greenergy, which supplies almost one quarter of the UK’s road fuels, reported an 82 per cent rise in profit due to cheaper feedstock and increased sales amid a growing market share.
Profits in the year ended April 2012 climbed to £25.3m versus £13.9m a year earlier, according to an annual report. Sales increased to 10.9 billion litres of fuel from 9.9 billion litres, increasing the company’s UK market share to 23.2 per cent.
Greenergy mainly uses naphtha as feedstock in petrol, which is trading close to the lowest price in almost seven years.
“This year, the price of naphtha fell relative to petrol, making it a cheaper component than at any time in the past five years,” the report said. “The outlook for the next twelve months is for relatively cheap naphtha to continue to support our petrol manufacturing margins.”
Andrew Owens, Greenergy’s CEO, said: “Our petrol manufacturing margins were significantly stronger this period than the previous year due to lower raw material costs.”
Greenergy has agreed to buy the Coryton refinery, with Shell UK and Vopak, and may make an initial public offering if additional capital is required for further opportunities.
Greenergy is number 3 in the Sunday Times Top Track 100 of British private companies with the biggest sales.
An international search for a new fuel marker to help in the fight against diesel fraud has been announced by revenue authorities in the UK and Ireland.
Millions of pounds in revenue are lost each year through fuel laundering – the removal of the chemical markers from low duty diesel to sell it on as road fuel.
Working in partnership, HM Revenue & Customs (HMRC) in the UK and the Revenue Commissioners in Ireland are seeking submissions aimed at finding a replacement for the current fiscal fuel markers.
Andy Wiggins, oils policy team leader at HMRC, said: “Although the UK’s current fuel marker is actually one of the better quality markers in use, we are not complacent and appreciate the need to keep one step ahead of fuel launderers.
“Consequently the search for an even more robust marker capable of foiling 21st Century fuel launderers is essential to ensure that opportunities for fraudsters attempting to exploit fuel supplies are reduced and illicit fuel can be detected.”
Revenue Commissioner Liam Irwin said: “Fuel laundering and trading in illicit fuel represents a significant threat to the Exchequer and hurts legitimate businesses. We are determined to take every action necessary to stamp out this form of criminality.”
The joint invitation to make submissions can be found here