Cautious Vitol Sees Fall in Revenues
Dutch trader Vitol sold over half as much gas in 2015 as in 2014, with contracted sales of 683 TWh, down from 2014’s 1,202 TWh, it said March 22. Power and coal volumes were also down, and again so were the prices. Overall revenues fell 38% to $168bn, despite a 13% rise in crude and product trading.
Describing it as a “solid performance,” CEO Ian Taylor said that the price levels and volatility in the market today were reasons for caution. The company would therefore manage the business conservatively, “with a real attention to the careful management of each and every trade.”
He also warned of the need to pick one’s partners with more care than before. “Whilst opportunities in the physical market continue to exist, we are increasingly vigilant in respect of counterparty risk as current price levels will inevitably test some market participants,” he said.
“This current environment vindicates the extremely cautious approach we have long taken towards risk and debt.
“However, the broader implications of slowing global growth and a rebalancing of the Chinese economy are likely to impact parts of the portfolio and we expect a slowdown in the rate of demand growth in some energy markets. Stocks of crude and products continue to build and these will weigh upon the market,” he said. "Notwithstanding, we will continue to invest where the appropriate long-term opportunities arise.
“The Ghana gas-to-power project in which we are partnering with Eni and GNPC is progressing well. It has the support of the World Bank, which in July 2015 approved a record investment in the project. The project is expected to address Ghana’s thermal generation needs up to 2035."
The Sankofa Gas Project, which is a part of the total $7.9bn project, aims to develop offshore natural gas in deep water 60 km offshore western Ghana. The gas will fuel up to 1 GW of domestic power generation, or about 40% of Ghana’s present installed generation capacity, with corresponding savings on oil imports and carbon emissions. The bank gave $700mn in guarantees.
William Powell