Vitol Group aims to create 'Rotterdam' of the Baltics

  • 2006-10-25
  • From wire reports

GOING PLACES: Vaivads is both ambitious and hopeful about the future of the recently privatized Ventspils Nafta.

RIGA - The international oil and gas concern Vitol Group, which earlier purchased a 34.5 percent stake in Latvia's Ventspils Nafta multi-business group, has shown interest in the latter's terminal and reservoir park. The chairman of Ventspils Nafta's largest shareholder Latvian Oil Transit, Mamerts Vaivads was hopeful when speaking to Latvia's Neatkariga daily on Oct. 23 about the newly privatized company's potential direction.

"In Rotterdam and other places, Vitol performs a type of manufacturing, refining oil products and adjusting oil product quality to various technical and chemical requirements for different markets. If this line is developed, Ventspils could become the Rotterdam of the Baltic Sea region," Vaivads explained to the daily.
He added that Vitol representatives had shown special interest in Ventspils Nafta's terminal and reservoir park, which makes up 1.2 million cubic meters. He denied any attempts for a further takeover of the company, instead pointing out that Vitol might have other plans for the site.

According to Vitol's previous experience and the issues currently being discussed with Ventspils Nafta management, he said, the new shareholder is interested in changing some aspects of the business.
"If Ventspils Nafta starts fuel oil operations, considerable investments will be needed... And the reservoir park would be enlarged in the future," Vaivads told the daily, adding that Vitol was interested in fuel oil.
He also had robust predictions of the new company's plans for Ventspils Nafta, "I can predict that the Ventspils Nafta park could grow 2-3 times during the next five years. And volumes should grow, too," he told the daily.

Representatives of Ventspils Nafta and Vitol have been holding meetings in London and Ventspils during the past few weeks. During his interview, Vaivads said that Vitol was well organized in Russia, implying a possibility for the new company to win back its Russian market share.

The Vitol Group was founded in 1966 and is one of the world's largest independent oil traders. The company deals with transportation and trade of oil and oil products, oil refining, management of oil terminals and pipelines.
Ventspils Nafta has holdings in a number of companies, including VNT, Latrostrans oil pipeline operator, Latvijas Kugnieciba (LASCO) shipping company, and Preses Nams publishers. Little is known about the post-privatization future of the holding's non-oil related companies.