March 26, 2018 / 11:05 AM / a year ago

Energy trader Vitol's traded oil volumes edged lower in 2017

LONDON (Reuters) - The world’s largest oil trader Vitol said on Monday that its traded crude and products volumes fell slightly in 2017 as it focused on its mid and downstream acquisitions and added assets in the United States by acquiring Noble Group’s oil business.

A sign is pictured in front of the Vitol Group trading commodities company building in Geneva October 4, 2011. REUTERS/Denis Balibouse

The total volume was 349 million tonnes, down slightly from 351 million tonnes the previous year, but staying above the 7 million barrel per day (bpd) level hit for the first time in 2016.

The trader added that crude continued to represent the bulk of those volumes with a slight rise to 3.6 million bpd while gasoline volumes fell to 34 million tonnes from 44 million tonnes.

Separately, the firm increased its traded liquefied natural gas (LNG) and liquefied petroleum gas (LPG) volumes. Traded LNG nearly tripled to 7.4 million tonnes per year (mty) up from 2.6 mty in 2016 while LPG volumes fell slightly to 14.3 mty after a strong rise in 2016.

Turnover increased on the back of rising oil prices to $181 billion from $152 billion in 2016.

Vitol did not disclose its net profits though the Financial Times said on Sunday they had fallen to $1.5 billion from more than $2 billion in 2016.

In its statement, Vitol said “2017 was a challenging year, notwithstanding robust demand growth of 1.6 million barrels a day. Across the year, the pattern of demand and supply surprised the market, causing prices to dip in H1 2017, before rallying in the latter part of the year.” 

Independent traders thrive on volatility and the relative steadiness of global oil prices last year eroded already razor-thin margins. Increased global market transparency and data access in recent years have reduced opportunities for arbitrage and exclusivity in certain areas.

“Challenging market conditions required a constant focus on careful risk and margin management, though strong demand growth was supportive of volumes and the performance of our investment portfolio,” Vitol’s Chairman Ian Taylor said.

Long-time chief executive Taylor handed over the role of CEO to Russell Hardy two weeks ago.

Among its mid and downstream investments, Vitol increased its number of retail stations to over 5,000 after buying Turkish chain Petrol Ofisi and bought an 85,000 bpd condensate splitter from Koch Supply and Trading in Rotterdam.

About half of these stations will be in Africa after 300 more are added via an agreement with Engen Holdings, which will also spread Vitol’s presence to nine new countries. Vitol also has upstream assets in Ghana that began production with a target of 45,000 bpd.

Looking forward to 2018, Europe-focused downstream subsidiary Varo Energy has announced its intention to float on Euronext Amsterdam while its Africa-focused Vivo Energy is also expected to do an initial public offering this year.

The firm is also considering a possible float of its Australian downstream subsidiary Viva Energy, sources familiar with the matter said.

Reporting by Julia Payne; Editing by Adrian Croft

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