VENTSPILS NAFTA AND VITOL EXECUTIVES FILE OPINIONS REGARDING VENTSPILS NAFTA TERMINALS SHARE SALE COURT CLAIM

During these days, Ventspils nafta (VN) Management Board and Supervisory
Council members, including representatives of the Vitol Group, filed their
preliminary submissions and evidence in the Court case at which a group of
lawyers representing JSC Latvijas naftas tranzits (LNT) contest the sale of 49%
of Ventspils nafta terminals (VNT) Ltd. shares by JSC Ventspils nafta to Vitol
Group subsidiary Euromin Holdings. 

The submissions and evidence filed by VN and Vitol representatives dismiss the
claims made by lawyers, lead by Martins Kveps, acting on behalf of LNT,
outlining in detail the long-term business relationship that has existed
between VN and Vitol since 1997 and specifically describing the discussions
that had taken place between VN and Vitol regarding closer partnership in
operating the VN owned oil terminal since 2001. 

The submissions filed by the Vitol representatives on the VN Supervisory
Council demonstrate that discussions regarding a partnership by which Vitol
undertook to use the terminal capacity on long-term basis commenced in 2001 and
that those discussions included a number of VN representatives, including Mr
Olafs Berkis, who at the time was also the President of JSC Ventbunkers, the
largest shareholder of LNT, and Ms Elena Biktaseva. Mr Berkis had indicated
back in 2002, that a long-term and structured partnership with a strategic
investor was seen as key for the success of the terminal, given the reduction
of Russian crude oil deliveries via pipeline in 2002 and the subsequent halting
of deliveries in the beginning of 2003. 

The submissions of the VN executives specifically outline the process through
which VN was seeking a strategic partnership since 2003, due to worsening
economic conditions at the company and uncertainty of product throughput due to
the halting of Russian crude oil supplies. Prior to October 2006, VN had
entertained partnership proposals not just from Vitol, but also from other
leading oil industry players, including Glencore, Gunvor, Blue Ocean. The
submissions by VN managers show that the exploration of possibilities for
closer cooperation with these firms date back to 2003, thus dismissing any
claims made by LNT that VN moved in a hurry to sell off VNT shares. 

The Vitol representatives make it clear that it was a partnership at VNT that
induced the oil trading firm to participate at the VN share sale auction in
October 2006 and that Vitol explored the possibility with LNT, as the largest
private VN shareholder at that time, securing their advanced support for closer
cooperation in the form of joint venture partnership with Vitol in the terminal
business. Vitol was welcomed as a strategic partner in the terminal business in
written communication with LNT prior to the auction, at which Vitol
subsequently bid successfully for VN shares, thus ensuring a solid support for
its terminal business at shareholder level. 

„Our interest for the cooperation with VN was driven by our strategy to have a
unique, strong terminal capability in this region to add to our terminal
network, which already included terminals in Amsterdam, Rotterdam, Buenos
Aires, Kaliningrad, Singapore, Karachi and Fujairah. I am sure that the legal
claims that originate in the local shareholder disagreements will be sorted out
quickly,“ says Jeffery Martz, Vitol Group Senior Commercial Representative for
CIS, Caspian and Baltic regions. 

„Vitol was welcomed as a strategic partner because of its vast experience and
standing on the oil market. Vitol ships more than 200 million tons of oil
globally every year, has a group turnover in excess of USD 146 billion and
charters more than 3000 ships per year for its transshipment operations. Since
2003, when the pipeline deliveries were halted, we needed a strategic partner
to support our business with knowledge, resources and what is critical -
transshipment volumes. We have found such a partner in Vitol and I am sure all
the outrageous and unsubstantiated claims will be dismissed in due course,“
says Olga Petersone, the Chairwoman of VN Board. 

The submissions filed by the executives also describe the terms of payment for
the 49% of VNT shares, dismissing as absurd the claims made by M.Kveps and his
associate lawyers that VNT shares would have been transferred without due
compensation. 

„Vitol's overall proposal for the acquisition of a 49% stake in was quite
simply the best option available for securing the future of the VNT. All the
possible alternatives had been explored and exhausted. The success of VN
management in securing Vitol's commitment as a major strategic investor in VN
and in Latvia ought to be properly recognized,” said  Vladimirs Solomatins,
Council Chairman of VN. 

The opinions to the Court have been submitted by VN representatives Olga
Petersone, Vladimirs Solomatins, Ashley Neale, Dennis Cream, Jeffrey Martz and
Paul Mulholland. 



Gundega Vārpa,
a/s Ventspils nafta
Head of Advertising and Public Relations,
Phone.: +371 6 7229182;
e-mail: gundega.varpa@vnafta.lv