Supply

To fuel the processing capacity at the ISAB Refinery, ERG SpA purchases around 46 million* barrels of crude and residue oil on the international market every year. The main sources of supply are the countries of the former Soviet Union, North Africa and the Middle East.

The products that result from the processing of these raw materials are predominantly sold on the cargo market with domestic and international destinations and are sent in batches of variable sizes depending on the receiving markets.

*forecast after the closing of the exercise of the put option (read more on the press release published on April 1st 2011)

Row material origin

Products destination

Products destination January - September 2010

Within the scope of the Refining & Marketing Division, the Supply & Sales department oversees the purchase of all raw materials, which are selected according to their profitability, and the sale of the respective finished products, ensuring at the same time that hedging transactions are carried out where necessary to hedge the risks associated with price fluctuations and sea transport, thus maximising the economic position of the business.

In more detail, the Supply & Sales Department:

  •  guarantees the purchase of raw materials with regard to scheduled quantity, quality and timing in order to maximise the economic result of ERG’s processing activity at ISAB;

  • guarantees the sales of the products deriving from the processing activity at ISAB with regard to scheduled quantity, quality and timing and ensures the best conditions of sale;

  • maintains a constantly updated presence on the various markets and with all potential suppliers and customers;
  • seeks the most advantageous methods for procurement and sales, identifies development opportunities and anticipates weaknesses;

  • carries out appropriate hedging transactions to cover the risk associated with price volatility and in order to pursue the average annual refining margin, also using derivatives;

  • guarantees that a tanker can be found that is able to meet the transport requirements for raw materials and products with regard to the quantities and timings requested, by means of charter contracts that guarantee the best economic conditions while complying with the requirements for the ships used to be of the highest quality and safety and in full compliance with the relative ERG Group guidelines.