Aegean News RETAIL. A Growth Story. Policies Dimitris Sioufas. Plus. Interview OMI. Gas Station Network People Matter. Alternative Solutions Biofuels

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1 Aegean News T H E Q U A R T E R L Y M A G A Z I N E O F A E G E A N Policies Dimitris Sioufas Minister of Development Interview OMI Gas Station Network People Matter AUTUMN 2005 Alternative Solutions Biofuels Plus Flows & Currents Roots Maritime Tradition RETAIL A Growth Story ƒπ π - π À π 2003 AEGEAN NEWS 1

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3 editorial China, followed by India, is making tremendous contributions of manufactured goods on the global market, and gradually emerging as an industrial power. This influx of goods may be creating some problems for markets in the EU and Greece, but it is actually opening new horizons in global shipping. Although market growth and fluctuations cannot be predicted accurately, it appears that maritime shipping will continue to lead mass transport worldwide. This is an indication that the bunkering sector has an equally dynamic future as well. Aegean s plans for the future take all these factors into consideration. The company is developing new bunkering stations and has ordered new state-ofthe-art refueling ships from Chinese shipyards. Another Aegean investment initiative, already in progress, involves Greece s unique geography. Accessing the Aegean islands has always been difficult, particularly for fuel delivery. This has made fuel much more expensive on the islands than in the rest of the Greek market. To address this need, Aegean has ordered six special tankers (Ro-Ro) to supply the gas station network being developed on the islands. The new stations will be able to offer fuel at very low prices. We also will take all the necessary measures to protect the sensitive island and sea environment. These new initiatives place Aegean in an excellent position today, and over the long term. I wish our staff, associates, and friends a good winter and continued personal and professional success. DIMITRIS MELISSANIDIS Aegean Core Activities Retail More than 423 gas stations throughout Greece proudly display the AEGEAN logo, and our network is growing every week. AEGEAN's market share in Greece is 6.06%. Shipping AEGEAN manages a fleet of tankers, ranging from 3,500DWT to 100,000 DWT, that transfers and delivers oil to our clients throughout the world. All ships meet ISM standards. Bunkering In Piraeus, Gibraltar, Istanbul, Jamaica, Singapore, and the United Arab Emirates, AEGEAN is a leader in providing the best bunkering services available. In Piraeus, AEGEAN is the market leader in bunkering. Agency Services Ships from around the world rely on our agency services at Piraeus, Gibraltar and Jamaica 24/7, from loading and discharging, to spare parts and supplies. TEXACO Lubricants AEGEAN exclusively stocks and sells ChevronTexaco automotive lubricants throughout its retail network. AUTUMN 2005 AEGEAN NEWS 1

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5 contents 22 The Minister of Development, during his recent trip in the USA, presented the Greek Government s primary development targets. Aegean s super modern automatic Sincerity, interest, and direct contact, car wash in Thessaloniki is ready prove to be the best ingredients in to wash. Aegean s successful cooperation with its gas station owners. Autumn 2005 Aegean News is published quarterly by AEGEAN PUBLISHER & MANAGING EDITOR Raymond Matera CONTRIBUTING EDITOR G. Georgana LAYOUT AND PRODUCTION Multimedia S.A. PRINTING AND BINDING A. Psillidis & Co. OWNER Aegean 42 Hatzikyriakou Street , Piraeus, Greece Tel: Fax: info@aegeanoil.gr Internet: Comments and suggestions are welcome. CODE: 5169 Aegean News is free of charge and is available, subject to availability, to any interested person or organization. 4 AEGEAN UPDATE 6 FLOWS AND CURRENTS Trends and News in the Oil and Energy Fields 8 RETAIL The Positive Course Keeps Strong 9 RETAIL Journey to a Greece Blooming with Daisies 10 STATIONS OF THE MONTH Ioannis Sioutas The Perfect Arrangement Kostas Stavropoulos First Kilometer of the Argos-Korinthos Road 12 RETAIL Advice on Economical Driving 13 RETAIL Car Wash 14 RETAIL Biofuels A Challenge for the Present and Future Liquid Biofuels 16 RETAIL Gas Station Network People Matter Our Gas Stations Owners Talk about Us 19 BUNKERING Aegean s Upward Course in the First Nine Months of BUNKERING Each Day is Different in the Marine Fuels Market 21 BUNKERING Marine Lubricants 22 MINISTER OF DEVELOPMENT AT NEW YORK CITY S HARVARD CLUB 24 INTERVIEW: OMI 26 XPLORATION Oil A Brief History 27 MARITIME TRADITION Maritime Museums 28 ROOTS Komboloi Part Two 29 ATHLETICS Greek Football 30 RAVEL Thessaloniki The Eternal City AUTUMN 2005 AEGEAN NEWS 3

6 AEGEAN UPDATE Aegean at Tsavliris Reception Aboard Fotiy Krylov The Tsavliris Salvage Group recently held a very successful reception on board the Fotiy Krylov to celebrate her first visit to the port of Piraeus in three years. Numerous ship owners, marine insurers, bankers, brokers and other prominent figures in the industry visited the vessel. The Fotiy Krylov jointly holds the title as the world s largest and most powerful salvage tug with her sister ship the Nikolay Chiker. Together, the two mega tugs have performed 60 salvage and towage contracts worldwide over the last ten years. Mr. Dimitris Melissanidis was among the distinguished guests. Logging On Customers and associates of Aegean may visit the company s web site [ to learn about the company s activities. Bunkering customers may register online to conduct business and maintain contact with the bunkering department. Two More Ships to Join the Aegean Fleet Within the framework of its fleet renewal program, Aegean is acquiring two more double hull ships. The newest acquisitions are the double hull, 11523DWT, sister ships, AEGEAN PRIDE and AEGEAN GLORY. The first one joined the fleet on the 24th of October 2005 and the second one is expected in mid January New Personnel Kavadakis Antonis RETAIL Mavroeidis Ioannis RETAIL Kondoyiannopoulos Alexandros RETAIL Meravidis Ioannis OPERATIONS/BUNKERING Tzanakakis Ioannis TRADER/SINGAPORE OFFICE Petroulaki Efrosyne RECEPTION/SECRETARY Mouratos Andreas ASSISTANT IT MANAGER Tzanakis George MARINE PETROLEUM TRADER Tsogas Ioannis MARINE PETROLEUM TRADER Demiza Marilena MARINE PETROLEUM ACCOUNTANT Parisos Prodromos BUNKERING SERVICES/TECHNICIAN Plevraki Vasiliki ADMINISTRATIVE ASSISTANT TO THE PRESIDENT Kondrafouri Demetra SHIPPING/ACCOUNTING Aegean Participates in Economic Conference For the third consecutive year, Aegean participated in the Hour of the Greek Economy conference. An annual event, now in its 16th year, the conference is organized by the American-Hellenic Chamber of Commerce and was held November 7th and 8th at the Athens Intercontinental. Mr. Dimitris Melissanidis made a presentation at the conference as part of the panel discussing Public and private Initiatives for Regional Cooperation. Hour of the Greek Economy is a leading annual economic forum that enables key figures in the public and private sectors to exchange views and discuss current developments in the country s economy. Prime Minister Constantinos Karamanlis was the keynote speaker at the gala dinner of conference on Novemvber 8, and Opposition Party Leader George Papandreou addressed participants during the first evening s dinner, November 7. 4 AEGEAN NEWS AUTUMN 2005

7 Thessaloniki International Fair (T.I.F.) Aegean s President Dimitris Melissanidis visited the Thessaloniki International Fair. With over 350,000 visitors from around the world, the T.I.F. is the top annual international event held in Greece, and the venue the Prime Minister uses for his speech on the Greek economy. This year, Prime Minister Karamanlis spoke about his government s strategy of bold reforms aimed at simplifying procedures, promoting electronic governance, and eliminating bureaucracy. He proclaimed his intentions to re-invent the state and a more productive public sector, to strengthen local authorities, and to introduce a new immigration policy. The Prime Minister also referred to other important recent developments in northern Greece such as the Burgas Alexandroupolis oil pipeline, the Greece-Turkey natural gas pipeline, the undersea pipeline which will transport natural gas from Greece via Italy to Central Europe, and increasing the speed of rail connections between Thessaloniki, Sofia and Istanbul. As evidence that reforms are being made quickly, Prime Minister Karamanlis mentioned specific recent initiatives in privatization, public and private partnerships, the deregulation of the domestic electricity and natural gas markets, the reform of bankruptcy legislation, and the new regulations facilitating the establishment of businesses. Super Automatic, Modern Car Wash in Thessaloniki Another innovative Aegean initiative is realized. The biggest and most modern automatic car wash in Greece is now in operation. Details inside. Mr. Dimitris Melissanidis at the Bureau Veritas Hellenic and Black Sea Committee Meeting At the invitation of Mr. Didier Bouttier, the Regional Chief Executive of the Hellenic and Black Sea Committee, Mr. Dimitris Melissanidis participated in the Eighth Committee Meeting, held at the Grand Resort in Lagonissi, and was elected as a member of the Committee. New Stations in Aegean s Retail Network The Aegean network is growing throughout the country. More than 420 gas stations in Greece are now part of the Aegean family. Listed below are the stations that have started displaying the Aegean logo during the last three months. 1 Evritanias, Agrinio Soumelis Michalis Tranovalto Kozanis Gatsou Evaggeli Nea Efessos Pierias D. Pitsilis Bros Kandela Aetoloakarnanias Sideras Charalambos Almiri Korinthias F. Staikos Co. 79 Patron, Korinthos Bournia Maria Karavomylos Samis, Kefalonia Artelari Bros & Co. 190 Aetolikou & Agias Lavras, Nikaea Staikos P. Fotis Gr. Labraki, Nikaea Staikou F. Helen 268 El.Venizelou, Kallithea Staikos F.-Strimbakou G. 272 Demosthenous, Kallithea Marmarinos M. Nikolaos Kypseli Aetoloakarnanias Tsiakanika Evaggelia Chalastra Thessalonikis Kantzouras Evaggelos. Irakleitsa Kavalas Nikolaidou Polymnia 16 Akti Moutsopoulou, Piraeus Fanourgiakis G. Ioannis 24 Patron Klaus, Patra Giannakopoulou E. & Co. 24 George Papandreou, Chalandri Karatzalis K. & Co. 39 Demokratias Ave., Aiginio Pierias Petrakidou Irene 70 Thermaikou, N. Efkarpia, Thessaloniki Mitsas Aemilios & Sons 4th km Deskatis-Elassonas, Larisa Bikeris Constantinos Kalivia Elassonas, Larisa Margaritis Athanasios 155 Michael Voda, Athens Parklink SA Mandres Kilkis Derebeidou Martha Drepano Kozani Pehlivanidis Panagiotis 136. Papandreou, Sikies, Thessaloniki Giavasis D.-Rogougou E. AUTUMN 2005 AEGEAN NEWS 5

8 FLOWS AND CURRENTS Biofuels Enter Our Lives Biofuels, the focus of one of the four bills presented by Development Minister Sioufas, are set to become part of our lives beginning this year. A percentage of motor fuel and gasoline will be composed of biofuels produced from natural biological sources. For example, motor fuel will be composed of up to 5% biodiezel. This is an environmentally friendly fuel with very low emissions that does not burden the atmosphere with carbon dioxide. In addition, biodiezel has higher octane, which improves horse power and lubricates diesel motors better. European legislation requires 2% of all motor fuels sold in Greece this year to be produced from biological sources, while by 2010 this percentage must increase to 5.75%. Tax deductions for producing a certain quantity of biofuels will be available. The 2005 fuel consumption tax will not apply to quantities up to 51,000 cubic meters, and in 2006 and 2007 these quantities will increase to 91,000 and 114,000 cubic meters, respectively. Details inside. 6 AEGEAN NEWS AUTUMN 2005 Greek Shipping Reaches New Heights The Greek-owned fleet represents almost one quarter of global sea transportation. According to the Greek Ship Owners Union, in 2004 the fleet reached 3,800 ships, a capacity of 160 million DWT. This capacity represents 17.1% of the world total. The Greeks have 22.4% of the global tanker fleet and 24.6% of the bulk carriers. Greek-owned ships under an EU flag constitute 51.5% of the Community s DWT capacity. According to Ship Owners Union President Nikos Efthimiou, the continued growth of Greek shipping is due mainly to two reasons: the sudden rise of cargo transportation prices to a 60-year record high due to intense demand by China and India, and the extensive renewal through orders for new ships and the acquisition of used, but not very old, ships. In March 2005, Greek ship owners placed orders for 320 new ships (not including ferry boats) with a total capacity of 26.8 million DWT. Out of these ships, 192 are tankers and 82 are bulk carriers. These vessels represent 10.1% and 17.1%, respectively, of the total number of ships being built globally in these two categories. Finally, the Ship Owners Union would like to see Piraeus develop into the focal point for Greek Shipping, and the Greek government to establish new policy that capitalizes on the productivity of this very assertive sector of the Greek economy. The Ideal Countries for Business Relocation F A survey conducted, on behalf of the British Consulting Group Cushman & Wakefield, indicated that among European businesses planning to relocate to within the next two years the top choices are as follows: 52% for the ten newly-accessioned EU countries, 29% for China, 25% for Western Europe, 23% for India, 21% for Eastern European countries outside of the EU, 10% for Latin America, and 3% for South Africa. Another survey finding indicated that London, Paris, Frankfurt, Brussels and Barcelona were considered to be the ideal cities for hosting business activities. Five hundred and one executives from leading firms participated in the survey.

9 Alcatel to Modernize Kosovo s Fixed Phone Network The French telecommunications company Alcatel SA signed a 17 million Euro deal last July with Deregulation of the Domestic Electricity and Natural Gas Markets In mid October, Greek Minister of Development Dimitris Sioufas presented four bills including the deregulation of the domestic electricity and natural gas markets, the use of biofuels, and the establishment of the National Energy Strategy Council. He also announced investments of 3.5 billion Euros in the electricity and natural gas sectors. The construction of new electricity units with a total power of 900 mega watts is expected to be announced by a tender at the end of the year. However, analysts express reservations regarding the investors interests because of the high business risk involved for individuals to construct a 200 million Euro electrical unit. Bank financing may be hard to come by, particularly because of competition by PPC that produces power using the less costly lignite. Once the natural gas bill is approved by Parliament, large-volume consumers (such as industries and electricity units) will be able to purchase fuel from suppliers other than PPC, and starting on November 15, 2008 the market will open for DEPA, Greece's Gas Corporation, as well. The plan is to establish an affiliate of DE- PA to take over the responsibility and rights over the entire pipeline system. The mother company will be responsible for the trade sector. The four bills were presented in response to warnings by EU officials that Greece would miss all the deadlines for deregulating its energy markets. All 25 EU member states are obliged to deregulate their electricity and natural gas markets by July Kosovo s Telecom to modernize and expand the fixed line network infrastructure in the province. The project also aims to double the number of fixed line phones. Currently, there are 115,000 users of fixed telephony. The state-ofthe-art solution to be provided is unique in the Balkans and among the most innovative in the world, stated the Kosovo company manager, and added that the agreement will bring the next generation VoIP solution to the province VoIP, or Voice over Internet Protocol technology, shifts calls away from wires and switches to using computers and broadband connections to convert sounds into data and transmit them over the Internet. Project implementation is expected to begin in October. AUTUMN 2005 AEGEAN NEWS 7

10 RETAIL Aegean continues to maintain the biggest sales increase during the first semester of 2005 BY KONSTANTINOS POURSANIDIS RETAIL MARKET MANAGER According to recent data from the Ministry of Development on the fuel market during the first semester of 2005, Aegean marked the greatest increase in sales compared with other fuel trading companies during the same period last year. The table compares the prevailing increases/decreases nationwide during the first semester of 2005, with Aegean s performance. PRODUCT PERCENTAGE OF INCREASE AEGEAN S PERCENTAGE /DECREASE NATIONWIDE OF INCREASE/DECREASE SUPER L.R.P. -19,7% -1,6% UNLEAD PETROL 95 8,0% 28,2% UNLEAD PETROL 100 7,0% 40,4% DIESEL ENGINE -4,1% 17,1% DIESEL HEATING -1,6% 23,1% TOTAL FUEL -0,7% 22,3% It is worth noting that Aegean achieved the greatest sales increase in a period marked by great fluctuations and huge price increases. Furthermore, Aegean remains steadily sixth out of 20 companies in fuel sales, and ranks fifth in total gasoline sales. Aegean achieved the highest sales increase in an environment with great fluctuations ªarket shares based on ministry of development first semester 2005 data COMPANY UNLEADED PERCENTAGE UNLEADED PERCENTAGE SUPER PERCENTAGE TOTAL PERCENTAGE 95 % 100 % L.R.P. % FUELS % 1. SHELL BP EKO - ELDA AVIN AEGEAN JET OIL REVOIL ELIN ETEKA SILK OIL EL PETROL DRACOIL CYCLON KAOIL SUN OIL KMOIL ARGO MED OIL TEXACO BITOUMINA TOTAL REMARKS: All quantities expressed in metric tons. 8 AEGEAN NEWS AUTUMN 2005

11 Journey to a Greece Blooming with Daisies Aegean s cooperation with gas stations throughout the country has reached a number high enough to compete with the large multinational companies that have long dominated the domestic fuel market. According to data from the Ministry of Development, Aegean ranks sixth among its competitors, a fact that makes all Aegean company employees very proud. BY OLGA PASHALIDOU THESSALONIKI ACCOUNTING Aquick trip through Greece reveals that new Aegean gas stations are sprouting up every day in many neighborhoods and cities, creating a garden of colored daisies. These stations serve customers quickly and efficiently, and maintain fuel prices at reasonable levels despite the prevailing circumstances in the local and international markets. All this began about five years ago in northern Greece, when Mr. Iakovos Melissanidis specified the targets for the company and the continued growth of the gas station network. Gradually, the network expanded to other regions of the country and resulted in our current dynamic presence in the domestic market. Our network has exceeded 420 gas stations. Aegean s journey throughout Greece, from Ptelea in Evros to the blessed island of Tinos, from Glyky in Thesprotia to Areopolis in Lakonia, and from Hydrousa in Florina to Zakynthos, has convinced us all that our constant efforts have been fruitful. The numbers are proof of this fact. But how can the number of glorious Aegean colors flying over gas stations throughout Greece impress anyone? How can one measure the enthusiasm and joy of seeing another flag fluttering in the breeze? Can the numbers really show the untiring daily effort made by each one of us, whether a manager or accountant, secretary or salesman, truck driver or repair crew member? Once Aegean s journey throughout the country nears its end, we will realize that our efforts have paid off, that our teamwork has been rewarded. We will also realize that our responsibilities will continue to increase. We will have to make sure that we keep working to maintain Aegean s upward course, and to make the daisies bloom in every corner of Greece. A quick trip through Greece reveals that new Aegean gas stations are sprouting up every day in many neighborhoods and cities. How can the enthusiasm and joy of seeing another Aegean flag fluttering in the breeze be measured? AUTUMN 2005 AEGEAN NEWS 9

12 STATIONS OF THE MONTH Ioannis Sioutas The Perfect Arrangement One may think that Mr. Sioutas description of his cooperation with Aegean is a bit of an overstatement. But from what Mr. Sioutas told Aegean News during a recent interview, his choice of words could not be more accurate. John Sioutas s gas station is a family business located on the first kilometer of the Xanthi-Porto Lagos road. Mr. Sioutas considers himself new to the business because he started in 2003 and Aegean is the first company he has worked with. Aegean News asked Mr. Sioutas how this all came about. An acquaintance of mine worked for Aegean. He happened to come by when I was starting to set up the station. He liked what he saw and suggested I meet with Mr. Iakovos Melissanidis. That was it. We agreed on everything. We still do. For me, Mr. Iakovos is the best collaborator, a friend, and a brother. Aegean News asked Mr. Sioutas to compare his cooperation with Aegean with previous business relationships. I do not have any previous experiences, but I have heard from colleagues about the usual state of things in this business. And this is why I consider myself a lucky man. I do not believe that pain is necessarily gain. Mr. Sioutas continued by telling Aegean News that the wisdom of his choice has been reconfirmed many times. From the second year of operation, our gas station experienced a dramatic increase in sales. We have a steady client base that knows the quality of our fuel and trusts us. From the outset, Aegean supplied us with all the necessary, technologically advanced equipment for setting up this business. Today, there is a lot of talk about fuel quality control programs. But with Aegean, we had such a program from the beginning. Aegean News asked Mr. Sioutas to discuss his working relationship with Aegean. In the beginning, the first company inspector assigned to my station came from Xanthi to visit me every day. He really was the one who helped me set up this station. The present inspector, Mr. Baloutas, has tremendous experience and helps me with anything I might need. You see, Aegean is always by my side. When I started, I faced some problems with the competition. Aegean was there. The company helped me remain competitive without lowering my profit margin. When Aegean News asked John Sioutas whether he would consider making an arrangement with another company, he did not hesitate to reply. For some other company to approach you, you must leave space for them to do so. I will not even discuss such a possibility. I have the perfect arrangement. For me, Mr. Iakovos is the best collaborator, a friend, and a brother, reiterated station owner John Sioutas during a recent interview. 10 AEGEAN NEWS AUTUMN 2005

13 Kostas Stavropoulos First Kilometer of the Argos-Korinthos Road Finding a quiet moment to talk with Mr. Stavropoulos during his day was not easy. Ever since he started working with Aegean, he has been busier than... a bee! Relatively young but with 25 years of experience owning and operating a gas station, Kostas Stavropoulos dared to make a big change in his business three years ago by working with Aegean. He told Aegean News that up until that time, his cooperation with other big fuel companies stumbled over the usual problems. What can I tell you? An impersonal relationship, not even an inspector to visit us. We had to try to solve things over the phone.let us not even discuss it. I could never find anyone. When an Aegean inspector visited my station, I was ready to listen. I decided to make contact with Mr. Iakovos Melissanidis. What can I tell you about this man? Civil, friendly, straightforward. Nothing resembling the usual impression we station owners have about fuel companies whose primary goal is to smother us. No bureaucracy whatsoever. Not even that many papers to go through with my lawyer, but of course those necessary to be certain that I understand and to safeguard my interests. Simple, clear words! Now, three years later, by his modest estimate, Mr. Stavropoulos gas station has more than tripled the quantity of fuel it sells. Mr. Stavropoulos points out that his clients can count on the quality of fuel he provides and that Aegean s prices have no comparison. Our station is by now known to all with two words, quality and prices, he added. Aegean News asked about Mr. Stavropoulos relationship with Aegean representatives, and whether there have been any changes over time. Mr. Stavropoulos explained that from the moment he started his cooperation with Aegean and up to the present day, the positive climate has not changed in the least. Communication with the representatives remains frequent and friendly. Our cooperation is impeccable. There have not been any problems, and if some difficulty arises it is dealt with immediately. The company s inspectors pay us very frequent visits. Sometimes even twice a week, said Mr. Stavropoulos. When Aegean News asked whether he might consider changing companies, Mr. Stavropoulos reply was quite emphatic. I do not want to hear anything about it. Given the large quantity of fuel sales I have, there have been quite a few efforts by other companies to approach me. You see, cubic meters of fuel sold per month cannot be easily overlooked. But I am not interested in the least. Aegean News asked whether Mr. Stavropoulos would like to renegotiate any aspects of his cooperation with Aegean. No negotiations. I am covered on all aspects. To make my point clear, I want you to know that a year ago I established another gas station in Nemea. When the time came I called Aegean, not with the intention of negotiating but to let them know that I was ready to put up the company s colors. It was as simple as that. It was very clear to me. This new gas station would be under the colors of the company that allowed me to sleep peacefully. AUTUMN 2005 AEGEAN NEWS 11

14 RETAIL Advice on Economical Driving BY ALEXIS PISLIS SALES INSPECTOR The significant increases in international oil prices over recent months have had direct consequences on retail fuel prices in Greece. Below is some practical advice for achieving fuel economy in your automobile. Following these practical rules for fuel economy will have positive effects on your bottom line and the environment, and will also improve the reliability, functioning, and longevity of your car. l Follow the manufacturer s specifications for regular maintenance of your vehicle. Regular tune-ups and preventive maintenance will ensure fuel savings of up to 10%. By comparison, a vehicle that has not been serviced will consume 50% more fuel, and also burden the environment with increased emissions. l Check your tire pressure on a regular basis. The tire pressure suggested by the manufacturer should be faithfully maintained. Correct pressure is necessary for the vehicle s proper response when driving, to avoid premature wear, and to economize on fuel by as much as 3.5%. l Turn the engine off when idling for more than one minute. When the engine is idle for more than 10 seconds, more fuel is consumed than the fuel needed to restart the engine. l Avoid revving the engine, especially before turning it off, which needlessly consumes fuel. l Decide on your route in advance to avoid tension. Maintain a safe distance from cars ahead to avoid the need for abrupt moves, such as sudden braking. Eliminate jack-rabbit starts. Accelerate slowly and gradually. l Remove excess weight from the trunk or inside the car. Estimates indicate that in bigger cars, a weight increase of 50 kilos will increase fuel consumption by 2%. Removing the rack from the top of the car when not in use is recommended because the rack increases aerodynamic resistance and fuel consumption. l Do not exceed speed limits. In addition to improving your personal safety, this ensures fuel economy. l Take advantage of your engine s power. Operate your car at the speed it performs best. Try to drive in the proper gear all the time. For instance, use third or fourth gear only when road and traffic conditions allow. l Avoid heavy traffic and its consequences by choosing an alternative route, even if the distance is greater. l Drive steadily. Changing your speed continually needlessly consumes fuel. l Avoid driving distances of less than five kilometers very often. Short distances consume more fuel because the engine does not have the time to reach the right temperature for best performance. l Do not rest your left foot on floorboard pedals while driving. The slightest pressure puts mechanical drag on the components and wears them down prematurely. This drag also consumes additional fuel. l Use shorter and smoother roads. Remember that corners, curves, and lane changes require extra fuel. l Always inspect the suspension and other chassis parts. l Use the air conditioning conservatively. When driving in the city, air conditioning increases fuel consumption by almost 20%. Use the car s ventilation system or an open window instead. l Car pools reduce travel monotony and gas expense. Go to work in one car with colleagues who live close. You will have company and be able to share the expense. Do not exceed speed limits. In addition to improving your personal safety, this ensures fuel economy. 12 AEGEAN NEWS AUTUMN 2005

15 RETAIL Car Wash Another egean Innovation Aegean s new Car Wash will radically change the car wash concept, and it will become a new landmark and meeting point in Thessaloniki. Located in the Phoenix area, on the road leading to the Airport, the car wash is housed in a 350-square-meter building on a one-acre lot adjacent to the sea. The biggest automatic car wash in Greece today, it will really be like a mini Car City. While a car is being washed, the driver and passengers will be able to purchase car accessories from the large variety available at the air-conditioned Mini Market, or relax and enjoy a coffee or a soft drink at the café located in a grassy area, shaded by pine trees and next to the sea. Aegean s car wash is equipped with state-of-the-art American technology. The new system, imported from the U.S., will take cars through a gentle but very thorough wash cycle that will not damage the color, metal trim or windows, and also will provide a protective coating. The cleaning process includes: l Pre-wash cycle l Double soap cycle l Double liquid waxing l Chassis brush-up l Interior cleaning l Cleaning, disinfecting and scenting of car floor mats The system uses: l Special fabric l Tricolor shining foams l Special wax Within a specially designed, airconditioned room, the upholstery, floor mats, surfaces, and scratches will be cleaned and cared for. The company plans to expand this pioneering car wash system throughout Greece through its gas station network. Through its efforts until today, Aegean has succeeded in taking care of its customers by supplying them with high quality fuel at very good prices. Now, the company is extending its services to the external appearance of its customers vehicles by using an innovative system by Greek standards. Success seems inevitable! The new system, imported from the U.S., will take cars through a gentle but very thorough wash cycle that will not damage the color, metal trim or windows, and also will provide a protective coating. The company plans to expand this pioneering car wash system throughout Greece. AUTUMN 2005 AEGEAN NEWS 13

16 RETAIL µiôfuels A Challenge for the Present and Future For several years the use of biofuels has been the focus of discussion and research efforts. In some countries, biofuels are already substituting traditional transportation fuels. BY YIANNIS TSOGAS BUNKER TRADER Directive 2003/30/EU of the European Parliament and of the Council of 8 May 2003 intends to meet commitments made in the Kyoto Protocol, the international treaty on climate change with a goal of With its great competitive advantage due to its moderate climate and soil quality, Greece is in a position to produce excellent and competitively priced biofuels for domestic use and for export as well. reducing carbon dioxide emissions and other greenhouse gases. Within this context, the European Parliament Directive seeks to promote the use of renewable sources of energy in member countries, and to ensure that a minimum amount of biofuels are available in each country s markets and that national energy targets are defined. The Directive specifies that a minimum level of biofuels in proportion to the fuels sold should be 2 percent before December 31, 2005, and should increase to 5.75 percent by December 31, In response to the European Union Directive, the Greek Ministry of Development prepared a bill titled, "Introduction of Biofuels and other Renewable Energy Sources in the Greek Market," that was open to public deliberation until August 29, 2005, and is now in the Parliament. The bill specifies all the biofuel implementation policy measures by first taking into consideration the existing policies of the Ministries of Economy and Finance, and Rural Development and Food. Due to the abolition or reduction of EFK for biofuels in the EU s new Common Agricultural Policy to be implemented in Greece starting January 1, 2006 for most agricultural products, the entire framework of income subsidies Greek farmers receive from the EU will change dramatically. Implementation of the Common Agricultural Policy (deregulation, multiple compliance, and so on) will bring about great changes in the agricultural sector. Be- 14 AEGEAN NEWS AUTUMN 2005

17 ginning next year thousands of hectares of land (tobacco, corn, and cotton fields) will remain uncultivated or will be cultivated with crops of a greater commercial value. The biofuel sector will be extremely significant for Greek farmers, agricultural products, and fuel companies. The development of business initiatives involving biomass production and processing for biofuels will be particularly worthwhile. To meet the commitment made to the EU, Greece must substitute at least 2 percent of fuels sold with biofuels by the end of 2005, which amounts to 73,000 tons of gasoline and 52,000 tons of diesel per year. From an agricultural standpoint, this means that considerable expanses of land (400,000-10,000,000 hectares) will have to be cultivated with the right type of vegetables to produce the equivalent quantities of bioethanol (for gasoline) and biodiesel (for petroleum). Sugar beets and sweet sorghum are the crops used to produce bioethanol and are well-suited to Greek climate and soils. Sweet sorghum is preferable because it needs less water and fertilizers, and also produces more energy. The crops suited to Greece for biodiesel production are rape seed, sunflower, cotton, and soybean. Rape seed plants and sunflowers are the preferred choices depending on the cultivation area. With its great competitive advantage due to its moderate climate and soil quality, Greece is in a position to produce excellent and competitively priced biofuels for domestic use and for export as well. This is the case particularly for bioethanol production because of the lower cost of the raw materials. The biofuel production sector provides an entirely new area of development opportunities and profit for manufacturing and fuel trading companies, as well as the farmers who will cultivate the alternative crops to fuel the future. The crops suited to Greece for biodiesel production are rape seed, sunflower, cotton, and soybean. Rape seed plants and sunflowers are the preferred choices depending on the cultivation area. Liquid µiôfuels Biofuels are liquid fuels that can be used for transportation. The most widely used biofuels on the market are: Biodiesel Methylester, usually produced from seeds (rape seed or sunflower) can be used alone or mixed with diesel in diesel engines Bioethanol produced from sugar beets, corn, and sweet sorghum can be used alone or mixed with regular gasoline or as an additive in specially-designed gasoline engines Advantages of Using Biofuels The use of biofuels is an effective way of reducing the gas emissions responsible for the greenhouse effect and for addressing global climate change. Production of these alternative fuels is creating new opportunities for employment in agriculture and forestry, investment in new technology, and in the development of cleaner, more efficient industries using natural resources. From a technical standpoint, existing fuel installations can be modified to use biofuels. EU Directives on Biofuels The directives were proposed by the Commission in Spring In November 02 the EU countries reached an agreement about the proposal, including that targets should be indicative, not binding. The EU countries finally agreed to the directive in the beginning of April 03, after the second reading of the Parliament in March. The directive was finally adopted in May'03. AUTUMN 2005 AEGEAN NEWS 15

18 RETAIL In the Gas Station Network «People ªatter» Small is Beautiful: Economics as if People Mattered is the title of E. F. Schumacher s book, published 25 years ago, that achieved instant success. Schumacher s basic philosophy is that work, production, and technology must not only be the means for acquiring wealth, but also the means for personal development and professional fulfillment. The focus is the individual s quality of life as a producer and consumer. Maintaining more human, smaller scale relationships is considered as the key to achieving this goal. Schumacher s philosophy inevitably comes to mind when considering Aegean s course in recent years, particularly because the company s example validates it. A small company until 1999, Aegean provided bunkering services in Piraeus. Its direction began to change at the end of that year when Aegean bought out Euro Oil in Alexandroupolis, and started to take its first steps in the domestic retail market. One of Aegean s first moves was building a different image, one that was very different from its competitors in the fuel trading sector. The concept was simple but innovative. It involved the creation of a beautiful image, disproportionately beautiful some may argue, in relation to the size of the company. This image was made up of vivid colors to represent the Greek sea and sky, and was carefully shaped to leave space for human beings. The daisy was not an accidental choice, but one in complete harmony with the company s sensitivity to the crucial issue of preserving and protecting the environment, and enabling the new company to immediately make a clear statement about its identity. Aegean continued its image building with a second very important step. The company selected its staff members carefully for their professional capabilities, but also for their personalities and communication skills. Then Aegean attempted a new approach with the professionals of the retail market, the gas station owners. This approached focused on sincerity, real interest, and direct contact-a winning formula that was proven in practice. The key ingredients in this successful business relationship were trust in combination with an attractive pricing and a high quality Eight Gas Station Owners Discuss Aegean Tasos Goumas PILI, TRIKALA «My cooperation with Aegean started recently, but from the way it is going, I believe it will last for years» Michael Tsoutsas GOURGIOTISSA, AGRINIO «The best cooperation I have ever had on a personal and professional level. Whatever I ask for, I get» Theodoris Gengelis LOUTRA, ALEXANDROUPOLIS «I can describe my cooperation with Aegean in one word "excellent"» Nikos Xatzigeorgiou MIHANIONA, THESSALONIKI «Everything we agreed upon with Mr. Iakovos Melissanidis materialized in a week s time. I went from despair due to a previous cooperation to absolute satisfaction» 16 AEGEAN NEWS AUTUMN 2005

19 KILKIS SERRES PELLA FLORINA 38 2 THESSALONIKI IMATHIA 41 KASTORIA 18 KOZANI HALKIDIKI PIERIA 11 1 GREVENA 5 2 IOANNINA LARISSA 1 TRIKALA 3 THESPROTIA 5 27 CORFU 3 KARDITSA PREVEZA MAGNESSIA ARTA EVRITANIA FTHIOTIDA LEFKADA 15 1 AITOLOAKARNANIA 4 FOKIDA 2 KEPHALONIA EVIA 4 1 VIOTIA 2 ACHAIA ATTIKA KORINTHIA 46 ZAKYNTHOS ILIA 4 ARCADIA ARGOLIDA MESSINIA 5 LAKONIA DRAMA XANTHI 12 EVROS 1 RODOPI 5 KAVALA THASSOS SAMOTHRACE LIMNOS LESVOS SKYROS HIOS ANDROS TINOS IKARIA 1 SYROS PAROS 1 NAXOS MILOS AMORGOS KOS KYTHIRA SANTORINI ASTYPALIA Aegean s Retail Network Expanding Rapidly 423 Stations and Growing! CRETE KARPATHOS RODOS HANIA RETHYMNO IRAKLIO LASITHI Stefanos Lindaris PROMAHONAS, SERRES «Aegean inspires us with trust» Haris Demarhopoulos N. RISIO, THESSALONIKI «I have been with Aegean for only six months. I never expected such a tremendous increase in my sales» George Chronopulos AEGIO «My working relationship with Aegean is like day instead of night when I compare it with the previous company I worked with» Yiannis Skourtis ERMIONI, ARGOLIDA «I am absolutely satisfied with this relationship. The people of Aegean are always standing by to support us» AUTUMN 2005 AEGEAN NEWS 17

20 RETAIL product. Through these successful relationships, Aegean steadily gained ground with market professionals and with the consumers themselves. Our business was reborn with Aegean, Our life changed, we are friends with the people of Aegean, Our turnover increased by more than 50% ever since we started working with Aegean, and I will not find anything better anywhere else, are only some of the comments we have received from gas station owners to describe their relationship with us. Aegean s clearly noticeable presence rocked the boat in the fuel trading market. Companies with a traditionally strong presence were forced to lower their prices. Aegean then began to organize and staff its Thessaloniki offices, and in less than three years became the dominant player in northern Greece with the highest sales and the largest gas station network. The company s next move was to expand southward. This business decision surprised competitors. In 2004 and 2005, Aegean began to penetrate the Peloponnese and Attica. For five consecutive years, the company ranked first in the percentage of fuel sales growth. Aegean staff members are selected carefully for their professional capabilities, but also for their personalities and communication skills. Aegean s presence in Athens was vitally important because the city contains almost half of the country s population. Soon the long lines outside gas stations bearing its logo were covered on television news broadcasts. The company s name was now synonymous with fair prices and excellent fuel quality. One might even say that Aegean customers practically became our fans. This summer, the company s network included 420 gas stations. We have really come a very long way in a short time! Aegean is preparing to expand to the Greek islands using specially designed ships. In May, Aegean signed an agreement for the construction of six RO RO tankers that are to be built according to the highest standards and with state-of-the-art technology. This new Aegean initiative will be a significant contribution to consumers, since the company will be able to supply the Greek islands with fuel at low prices. In less than five years, the small company that started on the Thracian border in northern Greece has been listed as the fastest growing company in the fuel trading sector. In this short period, Aegean has managed to spread its colors throughout the country, and to have fanatically loyal customers and gas station owners. Its greatest success, however, is something more unique. It has managed, despite its ever-increasing size, to maintain those characteristics that usually typify a small community, a close-knit group of friends, a family, or sometimes a small company. These characteristics are a straightforward approach, sincerity, and warm human contact. After all, there is a way to maintain a human dimension in professional relations, one that does not limit success, but instead is its most vital ingredient. Aegean has succeeded in proving that, Small things are beautiful, especially when people matter! 18 AEGEAN NEWS AUTUMN 2005

21 BUNKERING Aegean s Upward Course During the First Nine Months of 2005 During the first nine months of this year, the demand for fuels by Aegean s customer ships, in the ports where the company operates as a physical supplier, increased considerably in comparison with the same period in Although oil prices undergo great fluctuations, even from day to day, our customers recognize that Aegean makes the appropriate market analyses and entrust us with their ships. GREGORY ROBOLAKIS DIRECTOR, MARINE SALES After seven months of successful operation, our new station in Kingston, Jamaica, has established our company s presence in the Caribbean region and offers our clients the most reliable solution for supplying their ships with quality fuels. To satisfy our clients requests, we also deliver lubricants off-shore to significantly reduce the delay time for supplying fuel and lubricants. Aegean recently opened one more marketing office in Singapore to explore the local and regional market as well. Aegean also is concerned with protecting the marine environment, an important factor in the company s responsible and successful development in Greece and abroad. Aegean implements and continually improves its operating procedures in the fuel trading sector to comply with ISO 9001:2000 (since 1999) and ISO 14001:2004 (environmental management system since 2005). The company also requires its associates to implement the appropriate procedures for the prevention of marine pollution. The company s barges used for fueling tankers are equipped with all the materials and devices required to immediately deal with any marine pollution that may occur during the fuelling process. In addition, the company s investment program for double side, double bottom (DD) ships is in the final stages of implementation. New barges will replace the older single hull models. In Gibraltar, three DD barges are already in operation, and two more are operating in Jamaica and Khor Fakkan. The number of barges will be increased depending on the needs of the bunkering station. From its first day of operation, Aegean has set high development targets in Greece and abroad. An important factor in the company s successful development, along with its human resources, has been its planning and implementation procedures. By using its own barges and bunkering stations around the world, Aegean can tightly control procedures so that deliveries are performed without delays and to resolve any problems that may arise immediately. Our insistence on maintaining personal contact with our customers and for making reliable deliveries has made Aegean the top choice for fuelling ships. AUTUMN 2005 AEGEAN NEWS 19

22 BUNKERING Every Day is Different in the Marine Fuels Market As all of us involved in this industry know and have experienced first hand, price volatility has not been conducive to either stability or predictability. BY GEORGIA KOUNALAKIS BUNKER TRADER Significant recent developments in the energy markets are due to the impact of the tragic natural disasters of hurricanes Katrina and Rita. According to various sources, hurricane Katrina alone is estimated to have caused losses of more than $200 billion. These damages covered the entire spectrum from the closure of Gulf Coast ports to the flooding of New Orleans, from the many jobs lost to the intense surge in energy prices, and from the strong negative impact on companies' sales and profits to the unimaginable personal losses. Moreover, the impact was not limited to the Gulf Coast and New Orleans, but was experienced far beyond U.S. boundaries. Hurricane Rita s approach to the Gulf coast was like a recurring nightmare, after Katrina s horrid mark. Although Rita s damage was not as severe as expected, the effects of the storm were still apparent. Ports such New Orleans and Houston are major ports for container cargo, bulk cargo, and petroleum. The disruption caused at these ports, in turn, placed intense pressure on neighboring ports. Good examples are the Florida ports in Tampa, Jacksonville, Pensacola and Port Everglades, as well as the ports in Savannah, GA and Charleston, SC. There was a considerable readjustment of shipping destinations and many of the alternative ports were not equipped to handle the massive docking capabilities of Houston and New Orleans. Houston is the largest tanker receiving port in the U.S., handling more than twice the volume of New Orleans, which ranks second. Considered together, these ports handle more than 20% of all the U.S. petroleum deliveries. In recent years, Houston has processed approximately 3,000 tankers annually. Hurricane Katrina, which temporarily closed nine refineries, cut the U.S. oil supply significantly. Let us briefly consider some of the facts. The Gulf of Mexico accounts for nearly 30 percent of the overall oil production in the U.S. and nearly half of the nation's oil refineries are based in the area. In short, the Gulf of Mexico is the energy backbone of the world's largest oil consumer. So the impact of Katrina on global crude oil prices was intense, and it was apparent when prices hit an all-time high above the $70 per barrel mark after Katrina, an increase of more than $4 per barrel in less than 48 hours. We live in the age of globalization, where countries are increasingly dependent on each other and many contribute significantly to the world economy. We have experienced the benefits of globalization, but now that we are so intertwined, any major disaster in one part of the world is eventually transmitted to the rest, affecting the various global economic barometers. 20 AEGEAN NEWS AUTUMN 2005

23 Marine Lubricants Market Gasping For Product The global market for marine lubricants has been hit by the worst crisis ever. Skyrocketing prices and additive shortages have increased a problem in existence for more than a year. BY DIMITRIS BAKINEZOS LUBRICANTS MANAGER Base oil prices have hit record highs and lubricant products have been the hardest hit in the oil sector because they depend mainly on bright stock. Base oil prices have increased a further 30% in the last couple months. The availability of lubricant oil additives is an even a bigger problem. The marine oil additive supply was already tight when Oronite s (the biggest additive supplier) plant in Singapore suffered an accident that limited its production for months. At the same time, other smaller additive companies closed their plants due to high production costs during the last year and a half. Compounding the problem, the hurricanes Katrina and Rita hit the southern part of the U.S., forcing all the additive plants in the area to close, including Oronite s principal plant in Belle Chasse, Louisiana. The four base oil plants, Port Arthur and Beaumont, Texas, Lake Charles and Westlake, Louisiana, and 12 lubricant oil blending plants have remained closed since the beginning of October. These plants account for 42% of the total capacity of the continent. The major base oil suppliers have declared this as an act of God to obtain relief from their obligations as these events were beyond their control. Major marine lubricant oil suppliers have put their customers in the U.S. and the Asia-Pacific region on product allocation. The shortages in these regions have also affected lubricant oil supplies on other continents. An oil major has taken a different approach to its cylinder oil shortages by substituting its cylinder oil with one of a lower base number (70 TBN instead of 40 TBN). Although lower TBN oil requires fewer additives, it is typically unsuitable for use in engines burning higher sulfur fuels. The combination of increased production costs, minimum availability, reduced supply and increased demand will most likely induce further price increases by the oil majors in the months to come. The shortages in the U.S. and Asia Pacific regions have also affected lubricant oil supplies on other continents due to the new product allocation. AUTUMN 2005 AEGEAN NEWS 21

24 GREECE: THE ENERGY HUB Minister of Development Dimitris Sioufas at New York City s Harvard Club The Minister of Development s recent visit to Washington, Chicago and New York was focused on promoting Greece s development plans. In an event organized by the Hellenic-American Chamber of Commerce at the Harvard Club of New York City, Mr. Sioufas delivered a speech on the development goals of the Greek government. Energy projects Mr. Sioufas extensively discussed the four major international energy initiatives. The Greece-Turkey natural gas pipeline, whose construction was inaugurated at the beginning of July by the Greek Prime Minister Costas Karamanlis and his Turkish counterpart, Recep Tayyip Erdogan. The underwater natural gas pipeline between Greece and Italy, an extension of the Greece-Turkey pipeline, which will transfer gas from Greece via Italy to the center of Europe. The European Commission has characterized this as a top priority project and it is supported as such by the Greek and Italian governments. The Burgas-Alexandroupolis oil pipeline, which will constitute a complementary route for the transportation of Black Sea oil to the markets of Western Europe and the U.S. Support for the project s construction was sealed with the signing of an agreement between the governments of Russia and Bulgaria. The signing of the treaty for the establishment of the Energy Community of Southeastern Europe, held in Greece on October 25th, and in which 14 countries of the greater region participate. Greece is becoming an international energy hub. Its geopolitical role is being upgraded and additional incentives for new investments are being established, said Minister Sioufas. Greece, due to its geopolitical position, is the gateway to Europe for the countries of the eastern Mediterranean, the Middle East, Asia and North Africa. Mr. Sioufas explained that the primary goal of the government s development program is to take advantage of the country s economic potential in all areas of development. With the declaration of 2005 as the Year of Competitiveness, the emphasis of government policy is placed upon quality and productivity and we will stay on that course for the years to come remarked Mr. Sioufas. The government s main objective is to bring together, under a common cause, Greek scientists that have made a name for themselves all over the world, and we already have with us some very important personalities from the proud and dynamic Americans of Greek descent. We have already proceeded in planning, and have started implementing a series of measures and interventions, to cover lost ground and get a dynamic head start in to a new era. The Minister of Development continued by stressing the very distinct place that new technologies and research have in the National Strategic Development Plan of Greece, which will be co-funded by European Community structural funds and national resources. After the successful completion of the 2004 Olympic Games, the government shifted its focus to implementing an extensive reform program with a dual goal. The first goal is to transform the State into one of increased capabilities. A State that will assist and not manipulate private initiative. A State capable of providing the best services possible to citizens and businesses, while at the same time being truly efficient in its social mission, said Mr. Sioufas. The second goal is to center development on the citizen. Dynamic, viable and balanced development throughout the country, said Mr. Sioufas. Develop- 22 AEGEAN NEWS AUTUMN 2005

25 ment that will distribute its fruits to all the country s citizens. The Minister continued by pointing out that today Greece is building a new development model, one that is friendly to entrepreneurship, attractive to foreign direct investment, aimed at continuously improving the competitiveness of the economy, and open to cooperation between the public and private sectors. Toward the accomplishment of this goal Mr Sioufas pointed out that we increased public expenditure for innovation, and in particular funds for research, technology, and innovation of the Business Plan for Competitiveness. We are proceeding to the modernization and restructuring of the institutional framework for research. Already, the new National Research and Technology Council has shaped a number of specific proposals which are being submitted for national deliberation. A State that will assist and not manipulate private initiative, one capable of providing the best services possible to citizens and businesses. The new development model will be open to cooperation between pubic and private sectors. Greece Gateway to Europe Mr. Sioufas continued by discussing the importance of Greece s geopolitical position in detail. Greece, due to its geopolitical position is the gateway to Europe for the countries of the eastern Mediterranean, the Middle East, Asia and North Africa. At the same time, it is a place where large enterprises from Western Europe and America can establish their headquarters and research centers to penetrate the markets of Eastern Europe, the Balkan countries, the Black Sea region and the Middle East. Contemporary Greece is capable of playing the role of a go-between in the development of foreign entrepreneurial and investment interests in the greater region. Greece is already one of the biggest investors in most of the Balkan countries. Greek investments in the greater geographical region are in excess of 8 billion Euros. More than 3,500 Greek enterprises and 700 branches of Greek banks are active in Balkan countries. Greek-invested capital is ranked first in F.Y.R.O.M, Albania, Serbia and Montenegro, second in Bulgaria, and third in Romania. Furthermore, Greece provides the opportunity for new entrepreneurial initiatives, on a large scale and with great added value, in sectors including, the exploitation of Olympic infrastructure, renewable sources of energy, energy infrastructure, trade, transportation, communication, information technology and shipping. Mr. Sioufas concluded his speech by emphasizing that Greece is entering a new era, but will continue to focus on all those traditional characteristics that make it a country open to all. Greece is changing. We dare to implement the reforms required by the new era of globalization, of fast developments, of revolution in knowledge and technology. Greece is building today the infrastructures required to transform it into a development hub at the crossroads of East and West, of North and South. It is building a new business model, extroverted, and friendly to entrepreneurship. Greece is moving forward with determination and with an integrated plan. Post-Olympic Game Greece is a country of perspective and great opportunities, a country with boldness and perspicacity, ready to face the challenges ahead. Greece is working with caution and confidence for peace, stability, and development of the entire wider region. It is a country of safety and hospitality, of culture and history that is open to all. It is a modern country with new dynamics ready for development and progress. Contemporary Greece is capable of playing the role of a go-between in the development of foreign entrepreneurial and investment interests in the wider region. AUTUMN 2005 AEGEAN NEWS 23

26 BRIDGES OMI From Ship to Shore Mr. Cameron Mackey, Senior VP of Operations at OMI Corporation in the United States, discusses issues at the forefront of the shipping industry, and OMI s cooperation with Aegean. OMI Corporation provides seaborne transportation services for crude oil and petroleum products in the international shipping markets. The Company is engaged in two aspects of vessel operation, technical operation, which involves maintaining, crewing and insuring the vessel, and commercial operation, which involves arranging the business of the vessel. OMI is the commercial operator of all its wholly owned vessels and a subsidiary, OMI Marine Services, LLC, is the technical operator. Its customers include major independent and state-owned oil companies, major oil traders, government entities and various other entities. Tell us a little about OMI, its history and activities. OMI has come a long way from its roots as Oriental Exporters Inc., a drybulk and breakbulk company founded in The company grew, was acquired by and was later spun off by Ogden Corporation. It was involved in a host of businesses lightering services, for instance and ship management for the U.S. Government. But the Company as it exists today really took shape in At that time, management very aggressively streamlined its business spinning off from U.S. Flag operations, exiting joint ventures, and renaming itself as the OMI Corporation. Earlier this year, the company completed its fleet renewal program, establishing a very modern, entirely double-hulled fleet of tankers. What kind of fleet do you operate? OMI operates product tankers and Suezmax tankers. Our product fleet consists of Handy's (37,000 DWT) and MR's (47,000 DWT). A number of these ships are ice-class, and there are another five new buildings to be delivered in the first part of In Suezmaxes, we own or operate 17 vessels. In addition, we manage the Gemini Pool a group of similarly modern Suezmaxes with a German partner. We also have a Suezmax marketing agreement with Frontline called Alliance Chartering. A large number of our fleet is on long-term time charter to either oil majors or charterers of solid credit and similar operating philosophy. Safety has become an important issue in shipping. How do you respond to the safety and environmental demands of today's market? The cost of non-compliance is rising fast. Whether this involves the criminalization of the seafarer, the liability of the ship owner, or the rising standards of customers with respect to injuries and casualties, the cost is rising. The vetting process and ISM have accomplished much, but compliance is what we call the last mile of ship management. It is the last mile because there is no simple checklist which provides an answer. Performance depends on well-de- 24 AEGEAN NEWS AUTUMN 2005

27 signed processes, the right people for the job, and an organization which gives consistent behavioral cues. The new TM- SA attempts to capture much of this, but there simply cannot be a one size fits all approach to safety and compliance. We are investing a great deal in discretionary training for instance, the subject of management and leadership has largely been left to the Master to figure out over the course of his career. Senior officers rotate through our head office in the United States to better understand our operational demands. They must sense at every moment a consistent message that investment in safety and compliance pays for itself ten times over. As an industry, I think the current pressures stem from generations where safety and commercial opportunity held no relationship. We believe this relationship has begun, and we think it will strengthen, especially in light of other market dynamics. The shipping industry is undergoing a lot of change. How does OMI meet the challenges of today in its management structure and training? The nexus of requirements and activities are growing very complex. Traditionally, many owners just wanted a technical oracle to tell them that everything was alright. Such a personality-based approach has long been obsolete here. Designing clear and transparent processes is one important ingredient. A common pricing of risk is another. Clear communications, by training and by design, is essential. Our team consists of the headquarters in Stamford, Connecticut, a technical office in Houston, and our exclusive ship management office in Mumbai. As far as shorebased training goes, communications and compliance are presently the two overriding priorities. Of course, technical training proceeds as a matter of course. You have recently appointed an ombudsman. How do you believe this enhances your operations? Actually, we have had an ombudsman position for some time, but the change is that the ombudsman and Director of Environmental Compliance are now one and the same man: Ole Chr. Shroeder. This combined position absolutely enhances our operations. I can sleep at night knowing that there is a distinct reporting channel to the Board for any claims of misconduct. It is the same argument we make to our ship staff we expect and demand that our employees protect themselves. In other words, this position has been a tremendous help with transparency throughout the organization, and its success can be gauged by the pattern of reports at first very high, as individuals became used to the mechanism and then declining as the quality of the reports improved. Analysts predict that shipping will remain strong for years. Are you concerned that there will be an over build? We look at our business from an opposite perspective such as an investor might with a balanced portfolio. Take heed of the worst-case scenario. A lot of things have to go right to rationalize the current orderbook. America, Europe, India, China all pistons have to be firing. We watch the U.S. consumer and the mounting pressures of mortgage, energy prices, credit-card debt, the coming shopping season, and reminders of America's vulnerability with some concern. Reaching a tipping point in the early part of next year is not far-fetched. How do natural disasters such as Katrina and Rita affect the industry? In the short term, of course the markets benefit the products by the limitation in U.S. refining capacity and the crude by virtue of the damage to production, installations and infrastructure. In the medium and longer term, of course, one could look to greater ton-miles in the product market, and the possible erosion of demand I mentioned earlier. But the bottom line is that the energy supply chain is carefully balanced, and shipping is the most vulnerable link. This will not change. In fact it will only improve as refiners and producers look to further squeeze efficiency out of upstream and downstream activities. If floating tonnage can remain in balance, we can continue to capitalize on events like these and the market volatility they create. How do you view your relationship in the U.S. with Aegean? We view Aegean as a reliable partner. As I explained above, we are taking a close interest in a number of suppliers, not only in the quality of the product but the quality of the service and the organization. We are extremely pleased with what we have encountered. Do you have a strategy in place to advance OMI during the next decade? Yes, be flexible, be opportunistic, and be disciplined in the risks you chose to take. There are plenty of transactions and business lines which currently have sex appeal, but are either capital inefficient or simply too risky. Our shareholders expect us to perform well at any point of the shipping cycle. They expect us to leverage trading and operating expertise to capture excess returns. It just so happens that we still find these opportunities in our core businesses, but it may not always stay this way. AUTUMN 2005 AEGEAN NEWS 25

28 EXPLORATION Oil A Brief History Known since ancient times, oil has been mentioned by historians since Herodotus. The first oil wells were drilled in China in about the 4th century. Descriptions of the oil fields of Baku, Azerbaijan, by the geographer Masudi in the 10th century and Marco Polo in the 13th century, reveal that the wells produced hundreds of shiploads of oil. These wells, reaching depths of 800 feet, were drilled using bits attached to the ends of bamboo poles. The oil extracted was burned to reduce brine into salt. By the 10th century, extensive bamboo pipelines connected the wells to the salt fields. Ancient Persian tablets indicate that the higher social classes used oil for lighting and medicinal purposes. In the 8th century, the streets of the newly-constructed Baghdad were covered with tar derived from petroleum drilled from the natural springs in the region. A century later, oil fields in Baku, Azerbaijan were exploited for the production of naphtha. Descriptions of these oil fields, by the geographer Masudi in the 10th century and by Marco Polo in the 13th century, reveal that the wells produced hundreds of shiploads of oil. The modern history of oil began in 1853 with the discovery of the oil distillation process by the Polish scientist Ignacy Lukasiewicz who was the first to distill crude oil into kerosene. The following year, the first "rock oil" mine was created in Bobrka and the first refinery was established in Ulaszowice by Lukasiewicz. These discoveries spread rapidly around the world, and in 1861, A. Meerzoeff built the first Russian refinery in the oil fields of Baku. The first modern oil well was drilled northeast of Baku by the Russian engineer F. N. Semyenov. On the North American continent, oil exploration proceeded quickly. The first commercial oil well was drilled in 1858 in Ontario, Canada by James Miller Williams, and the American petroleum industry began with the discovery of oil in 1859 near Titusville, Pennsylvania by Edwin Drake. The industry progressed very slowly during the 1880s since the demand for oil was limited to kerosene and oil lamps. The situation changed dramatically in the early part of the 20th century with the introduction of the internal combustion engine. Demand was so great that it has sustained the industry up to this day. The early discoveries in Ontario and Pennsylvania were quickly exhausted and were soon replaced by oil booms in Texas, Oklahoma, and California. By 1910, significant oil fields had been discovered in Alberta, Canada, Sumatra, Persia, Peru, Venezuela and Mexico. Today, almost 90% of the demand for motor fuel is covered by petroleum. Its value as the source of energy for most vehicles and as a base for many industrial chemicals makes it one of the most significant commodities in the world. 26 AEGEAN NEWS AUTUMN 2005

29 MARITIME TRADITION If the gentle summer sea breeze is a lingering memory, join our tour of the Maritime Museums to appease those nostalgic feelings and enjoy a seafaring journey into the past. Maritime Museums Maritime Museum of Greece The Maritime Museum of Greece is the country's largest and was established in Since 1971, it has been housed in the Marina Zeas building in Freattida, Piraeus. In ten spacious exhibition halls, the Museum traces the country s maritime tradition through the centuries. The first hall contains paintings by some of the greatest seascape artists of the 19th and 20th centuries,such as Volanakis and Hatzis. The next halls provide an overview of maritime activity from prehistoric times through antiquity, to the Byzantine and post- Byzantine periods until the end of the 18th century, and from the Balkan wars and World War II until the present. The last exhibit presents the history of the Greek merchant marine. An extensive collection of Greek and world maps dating from the 16th to 19th centuries also are exhibited. The museum contains the only maritime library in the country, a collection comprised of more than 10,000 books and periodicals. The museum has an excellent educational program called "The ways of the sea" for children aged 6 to 16. This program teaches children about the Greek maritime heritage, and helps them understand the indissoluble ties of Greece with the sea. Crete s Maritime Museum On May 27, 1973, a date that coincided with the 32nd anniversary of the Battle of Crete, the island s Maritime Museum opened. The museum s exhibits cover maritime history during the Bronze age, the Classical and Hellenistic periods (2800 B.C.-6th century A.D.), and from 1944 to the present. The exhibits include models of ships, nautical instruments for measuring wind and distance, sextants, magnetic compasses, and instruments for guiding destroyers. The museum s collection also includes paintings and authentic historic photographs, including one of the flag being raised for the union of Crete with Greece on December 1, Relics and other memorabilia from the Royal Navy s men who fell in battle are displayed along with guns from the landing operations of Santorini s Maritime Museum In Santorini s picturesque town of Oia, the island s Maritime Museum is housed in a captain s mansion that dates to the 19th century. Captain Antonis Dakoronias established the Museum in 1951 to preserve and revive the island s glorious maritime history. The Museum s exhibits relate stories of adventure and prosperity, as well as the hard life of a sailor at sea. The collection contains rare figureheads, anchors, carved chests and sextants, as well as aquarelles and models of old ships. Rare books, documents and dowry contracts, photographs and wills are included in the exhibits. All of these items enable the visitor to imagine the years when Santorinian seafarers plied the seas on artistically-built wooden sailboats to take their valuable Vinsanto wine to Odessa. AUTUMN 2005 AEGEAN NEWS 27

30 ROOTS The Christian rosary (from string of roses) is believed to have first been used in the 11th and 12th centuries by the knights in the Crusades because they were unable to pray in churches. At first rosaries had 54 beads, which equals half of the 108 beads used by Buddhist Malas when praying. Komboloi Part Two The rosaries used by Catholics in Europe during the 13th century had 59 beads. to equal the number of prayers. The French name for rosary is chapelet, the Italian name is rosario, and the German rosenkranz. These rosaries were made up of evenly-spaced, unmoving beads, in keeping with the strict religious rules of the times. The Greek komboloi is believed to have originated with the Greek monks of Agion Oros. Instead of beads, uniformly-tied knots made up these komboloia The Greek word for komboloi is derived from the original word komboshini (kombos for knot and shini for thread or rope). Today, the komboloi is no longer used for prayers, but for passing the time, relaxing, and to keep idle hands busy. The komboloi s design evolved as its use changed. Contemporary Greek komboloia usually have beads, though this varies depending on bead size. The cord holding the beads should be long enough to allow the beads room to move freely and produce a pleasant sound as they strike each other. The length of cord also allows users to twirl the komboloi around their hand. Ideally, the cord should include an empty space of about four fingers in length. A komboloi is made up of an odd number of beads for aesthetic presentation, design and balance, and so that the odd or single bead at the end creates a perfect semicircle. The importance of this single bead becomes apparent in the way a Some people believe that a komboloi on an unconscious level perhaps satisfies the senses of sight, hearing and touch. A komboloi is made up of an odd number of beads for aesthetic presentation, design and balance, so that the odd or single bead at the end creates a perfect semicircle. komboloi is handled. Users allow the beads to slip downward through their fingers in pairs, creating a rhythmical sound, and when all of the pairs have dropped, the single bead is held to keep the the komboloi from collapsing. Odd numbers also are also considered to bring good luck. Komboloi beads are made from many different materials. Amber is considered to be the best, but black coral, wood, animal bones, seed, and ivory are frequently used. In recent years, metal and silver beads are used as well. Some people believe that a komboloi on an unconscious level perhaps satisfies the senses of sight, hearing and touch. The color, the warmth, and the special sound amber beads make cannot be compared with the sensation produced by metal beads, which is perhaps the reason no komboloi was made of silver before AEGEAN NEWS AUTUMN 2005

31 ATHLETICS Greek Football According to one story, the first Greek football game took place on January 29, 1866 in Corfu when the officers of a British warship, moored at the island s port, decided to play football with a group of locals. Even though the Greeks did not know the game, they managed to win in front of 3,000 spectators. According to another story, football first made its appearance in the beginning of the 20th century in Thessaloniki when a group of foreigners living there established a football team called Union Sportive. A true fact, however, is that the new game was not very popular in Greece, but had enthusiastic fans in the Greek cities of Asia Minor, particularly Smyrna. The first football clubs were formed in those cities and some remain significant to this day. The 1922 forced repatriation of Greeks from Asia Minor, or the great disaster as it is referred to in Greek history, was a landmark in the evolution of Greek football. The over one million refugees who fled to Greece brought their love for athletics along with their customs and traditions. On January 1, 1899, football became an official sport under the Segas administration. The year before, John Chrysafis had prepared the first official translation of football regulations. The first football teams were the National Gymnastics Club and Panellenios in Athens, the Piraeus Club in Piraeus, Panionios and Apollonas in Smyrna, and the Pera Club (today s AEK) in Istanbul. A landmark in the evolution of Greek football was the 1922 forced repatriation of Greeks from Asia Minor. The more than one million refugees who fled to Greece brought their love for athletics along with their customs and traditions. The first nationwide football games took place in That same year, the Goudi Club and the first national team were formed. In 1908, the Athens Football Club was established, and in 1923 it was renamed as the Panathenian Athletic Club. The Piraeus Club was renamed as the Olympic Association of Piraeus Fans in 1925, and is known today as Olympiakos. The Balkan wars and the First World War interrupted all athletic activity during the decade from 1910 to After this decade, football began to spread nationwide, and the teams from Smyrna and Istanbul were re-established in Athens after In 1926, the Football Unions of Athens, Piraeus, and Thessaloniki founded the Hellenic Football Federation, signaling the organization of Greek Football according to international standards. From that time on, the Greek Football Federation developed into one of the biggest athletic federations in Greece, and football became the most popular sport in the country. Landmarks in early Greek Football history 1926: Foundation of the Hellenic Football Federation 1927: The Hellenic Football Federation becomes a FIFA member 1954: The Hellenic Football Federation becomes one of the founding members of UEFA. AUTUMN 2005 AEGEAN NEWS 29

32 TRAVEL Thessaloniki The Eternal City Thessaloniki s intriguing history continues to fascinate even the most frequent visitor because the city has not only survived great upheavals over the centuries but emerged stronger each time. Today, it can once again claim the role of economic, political, religious and cultural epicenter of the Balkan peninsula. The monuments surviving from the Byzantine period, which lasted about a thousand years, make Thessaloniki an open-air museum of Byzantine architecture and art. Thessaloniki was founded in 315 B.C. by Kassandros, King of Macedonia, who named the city after his wife, the sister of Alexander the Great. Kassandros strategic placement of the city on the Thermaic Gulf, enabling access by both land and sea, made Thessaloniki the most important city and commercial port in northern Greece and the Balkans. A visitor walking through Thessaloniki will see evidence of its long history at every step. Archaeological treasures and monuments survive from every historical period, but the most numerous date to the one-thousandyear Byzantine period, making Thessaloniki an open-air museum of Byzantine architecture and art. During the Roman period, Thessaloniki was selected as the capital of the Roman province of Macedonia. Construction of Via Egnatia to link Rome to Byzantium, by way of Thessaloniki, increased the city s importance. Several archaeological sites and buildings date to this early period. In the central Platia Dikastirion are the ruins of the ancient Roman Agora. Far more intact, however, is the triumphal Arch of Galerios, constructed by Caesar Galerios to celebrate his victories over the Persians in 297 A.D. The Arch was part of a larger complex that included a palace, hippodrome and the still extant Rotunda. The Rotunda, one of the oldest monuments in the city, was designed to serve as an imperial mausoleum but was never used as such. In the 4th century, it was consecrated by the Christians, and later converted into a mosque. Today, it is the church of Agios Yioryios (Saint George). In 395 A.D., the Byzantine Empire was founded and Thessaloniki became the second most important city after Constantinople. Sections of the city s ramparts and towers remain from this period. In fact, while sections of these ramparts date to the 14th century, they were constructed on top of older foundations that date to the Roman period and even to city s founding. The White Tower, at the far end of the waterfront, which was constructed by Venetian builders after the city, was seized by the Turks in 1430 A.D. This tower contains a small museum of Byzantine art. Thessaloniki s Byzantine-period churches date from the 3rd through the 14th centuries and provide excellent examples of developments in architectural design from the early Christian, Byzantine and post-byzantine periods. All contain icons, fine mosaics, and wall paintings. Although Thessaloniki may be an open-air museum, it is not a city frozen in time. It is a lively city with theatres and concert halls, as well as tavernas, ouzeries, and waterside cafes. A vibrant city throughout the centuries, Thessaloniki continues to be lively today. 30 AEGEAN NEWS AUTUMN 2005

33 THE AEGEAN IMAGE Products that say We re different Aegean is proud of the contemporary image of its petrol stations. Station personnel enhance the Aegean Look through clothing and products that reflect a commitment to quality and customer service. AUTUMN 2005 AEGEAN NEWS 31