UPDATE 2-Oil trader Vitol revenues rise to record $297 bln

Tue Feb 21, 2012 6:14am EST

Related Topics

* Revenues and volumes both hit records

* Says plans to expand further in downstream

* Chief executive sees risk of higher oil prices (Recasts, adds revenue comparison in para 3)

By Emma Farge

LONDON, Feb 21 (Reuters) - The world's leading oil trader, privately-held Vitol, said revenues surged to a record $297 billion in 2011 and that it is looking to expand further in oil storage and distribution.

Traded volumes including oil, carbon and natural gas rose to a record 457 million tonnes in 2011 up from 399 million tonnes the previous year, the company said.

The firm said it planned to expand further in 2012 including in the midstream storage and downstream sectors.

"While physical global energy trading remains at the heart of Vitol, we continue to look at a variety of new investment opportunities in the midstream and downstream energy sectors, which can deliver growth and synergy with our core trading business," it said in a statement.

Swiss-based Vitol's revenues were significantly higher than those of its closest rival Glencore, which reported revenues of $186.2 billion in 2011.

While both companies are trading giants, a much bigger share of Vitol's revenues come from trading oil, where profit margins are much lower than in production assets.

Vitol is owned by its employees and does not release its profits.

Top independent traders have been expanding in the African distribution business in the last few years and in December Vitol started a new African downstream company, Vivo Energy, in partnership with Royal Dutch Shell and Helios Investment Partners.

Vitol said it handled 135 million tonnes of crude oil last year and that remained the largest part of its energy trading portfolio.

Brent oil prices reached a record high average price of around $111 a barrel last year, due partly to political turbulence in the Middle East including a civil war in OPEC member Libya.

Vitol Chief Executive Ian Taylor said the outlook for oil prices this year was uncertain, adding there was risk for prices to rise from their current level near $120 a barrel.

"Should global oil demand growth remain positive, driven by the economies in Asia, the Middle East and South America, and OPEC and non-OPEC deliver the expected additional supply, then we would expect oil prices to remain around current levels for the balance of 2012," he said.

"Geopolitical risk, especially in the Middle East, creates potential material risk to the upside," he added. (Reporting by Emma Farge; Editing by Anthony Barker)

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