UPDATE 3-Oil trader Vitol sees 2013 revenues flat at $307 bln

Mon Mar 24, 2014 2:01pm EDT

* Revenues rise 1.3 percent to $307 billion in 2013

* Vitol sees significantly slower growth since 2011

* CEO cites 'very challenging year', new opportunities (Adds details paragraphs 3 and 9, link to factbox)

By Ron Bousso

LONDON, March 24 (Reuters) - Top oil trader Vitol's revenues were flat in 2013 despite higher crude and product volumes as increased competition led to another year of single-digit growth.

The Swiss-based trader's revenues in 2013 reached $307 billion, up 1.3 percent from 2012, when they were $303 billion, according to its results statement on Monday.

The independent trader did not disclose its profits. Even though its revenue growth slowed in 2013, Vitol still is widely considered the world's biggest independent oil trader.

Total revenues have risen by more than 60 percent since 2008, the pace of growth has slowed markedly in the last two years. After recording revenues of $297 billion in 2011, they have since grown by just 3.5 percent.

"2013 was a very challenging year for many in the physical energy distribution business. Markets remained extremely competitive with new entrants increasing margin pressure on certain regional activity," Vitol Chief Executive Officer Ian Taylor said.

Traded volumes of crude and refined oil products in 2013 outpaced revenue gains, rising 5.7 percent to 276 million tonnes, or 5.5 million barrels-per-day, around 6 percent of global oil demand.

The small gain in revenues was linked in part to a drop of around 2.3 percent in the average price of benchmark Brent crude oil in 2013 from a year earlier.

New state-of-the-art refineries built in the United States, the Middle East, Russia and Asia have dramatically changed oil trade flows in recent years and increased competition among trading houses such as Glencore, Trafigura and Gunvor as well as national oil companies.

"While these market conditions aren't expected to change overnight, changing supply and demand balances are generating some new opportunities," Taylor said.

EXPANSION

Vitol, which has significantly expanded its refining and retail business over the past year, may make further investments as oil majors seek to reduce their refining and trading assets, Taylor said.

"We continue to see investment opportunities in the mid and downstream as the majors focus their activities upstream," he said.

Last December, Vitol made its second foray into European refining in as many years when it formed a joint venture with private equity firm Carlyle Group called Varo Energy to own refining and distribution assets in Switzerland and Germany.

And last month Vitol said it was buying Royal Dutch Shell's Australian refinery and petrol stations for about $2.6 billion in its biggest acquisition.

Vitol already has refining operations in the United Arab Emirates, Switzerland and Antwerp.

At the same time, the exodus of several major banks from commodity trading in recent years due to lower profits and higher regulatory scrutiny has impacted Vitol.

"The withdrawal of some investment banks from commodity related actives has reduced liquidity in markets such as power, but created longer term opportunities and our footprint in both the US and Europe is growing," Taylor said.

Vitol could face an even more competitive environment in 2014 as Swiss-based trader Mercuria is set to catapult into the top league of trading houses after it bought JPMorgan's physical commodities business for $3.5 billion last week.

Russia's top oil producer is also expected to increase its footprint in global trading after it agreed late last year to buy much of Morgan Stanley's physical oil-trading business. (Additional reporting by David Sheppard; editing by Veronica Brown, Stephen Powell and Jane Baird)