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Aegean NewsT 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 NChangingthe Face ofPiraeusThe Port in 2004InternationalConflictThe PetroleumImpactAkisTsohatzopoulosAn InterviewAEGEAN'sExpandingRetail NetworkPlusFlows and CurrentsBunkering, Shipping,and Retail News

editorialIn a world that is becoming increasingly globalized,improved communication has become both a necessityand a challenge. As AEGEAN expands its geographicand business horizons, our network of friends, businesspartners, associates, and collaborators grows as well. Inthis complex world, communication brings us all closertogether through greater understanding. And as webetter understand each other and each other's goals, webetter understand each other's needs.Aegean News is a communication tool to help allof us understand one another better, and let our business partners learn moreabout what the AEGEAN family does. Whether in shipping, the retail market,bunkering, or agency services, members of the AEGEAN family are helpingeach other create a dynamic enterprise and a network of professionals thatstrives for the very best—in service, products, and results. Motivated employeesare our most prized asset; satisfied customers our most prized objective.Energy is the largest industry in the world, and one that is vital to all of usevery day—at work, at home, and at leisure. Sometimes, events beyond our controlcreate special challenges that interrupt or change normal business cycles. AtAEGEAN, however, we always strive to fulfill the energy needs of our partnersin the best possible way, so that together we can grow and make our lives moreproductive, more integrated, and more fulfilling.I hope Aegean News becomes a common forum that will explore the rich andvaried business opportunities that we all share, will further develop our professionaland personal relationships, and will shed light on new ways to create local,regional, and global energy solutions.AegeanCore ActivitiesRetail➔More than 280 gas stations throughoutGreece proudly display the AEGEANlogo, and our network is growing everyweek. AEGEAN's market share in Greeceis 4.5%.Shipping➔AEGEAN manages a fleet of 26 tankers,ranging from 3,500DWT to 100,000DWT, that transfers and delivers oil toour clients throughout the world. Allships meet ISM standards.Bunkering➔In Piraeus, Gibraltar, Venezuela, andthe United Arab Emirates, AEGEAN is aleader in providing the best bunkeringservices available. In Piraues AEGEANis the market leader in bunkering.Agency Services➔Ships from throughout the world relyon our agency services at Piraeus andGibraltar 24/7, from loading and discharging,to spare parts and supplies.Lubricants➔AEGEAN exclusively stocks and sellsChevronTexaco automotive lubricantsthroughout its retail network.DIMITRIS MELISSANIDISSPRING 2003 AEGEAN NEWS 1

contents8AkisTsohatzopoulosdiscusses the currentenergy and petroleummarkets amidst anuncertain globalenvironment.18AEGEAN's strategyto expand its retailoperations is provingsuccessful, as newstations join thenetwork.12The port of Piraeus,the center ofGreek shipping,is being preparedfor 2004 andbeyond.Spring 2003Aegean News is publishedquarterly by AEGEANMANAGING EDITORRaymond MateraCONTRIBUTING EDITORGeorge FintikakisLAYOUT AND PRODUCTIONMultimedia S.A.PRINTING AND BINDINGA. Psillidis & Co.OWNERAegean51 Akti Miaouli Street185 36 Piraeus, GreeceTel: +30 210 429 2530Fax: +30 210 429 3074E-Mail: info@aegeanoil.grInternet: www.aegeanoil.grComments and suggestionsare welcomed.Aegean News is free of chargeand is available, subject toavailability, to any interested personor organization.4 AEGEAN UPDATE6 FLOWS & CURRENTSTrends and News in the oil and energy fields8 INTERVIEWMinister of Development Akis Tsohatzopoulosspeaks to Aegean News10 INTERNATIONAL MARKETSThe impact of international crises on oil markets12 CHANGING THE FACE OF A PORTPiraeus is set to have a new face by the timethe 2004 Olympic Games get underway16 JACOB MELISSANIDIS:AN INTERVIEWJacob Melissanidis offers his viewson AEGEAN's successful growth strategy18 AEGEAN'S RETAIL MARKET19 LUBRICANTSChevronTexaco is one of AEGEAN's leadingbusiness partners20 AEGEAN PEOPLE21 STATION OF THE MONTH22 BUNKERINGNellos Filopoulos speaks about the boomingbunkering market in Greece and abroad24 SHIPPING AND AGENCY NEWS25 MARINE TRADITIONSOcean liners from the past26 BRUSSELS NOTEBOOKNews from the EU28 THE 2004 OLYMPIC GAMESVolunteering for success29 FORUMAlexander Lamnidis, Executive Director,American-Hellenic Chamber of Commerce30 TRAVELThe other Tinos31 THE AEGEAN IMAGEProducts that say "We're different"32 AEGEAN PROFILESPRING 2003 AEGEAN NEWS 3

AEGEAN UPDATETrans-Atlantic Partnership for SuccessAegean is fulfilling a major contract with the United States Department of Defense by supplying fuelproducts to U.S. Navy vessels stopping at Souda Bay on the island of Crete.Aegean Marine Petroleum was awarded a major contract bythe United States Defense Energy Support Center (DESC) inWashington, D.C. to supply fuel products to the U.S. Navaland support ships stopping in Souda Bay, Crete.The DESC is the United States government agency thatmanages all energy-related needs for the U.S. militarythroughout the world. Aegean undertook the bunkering servicesat Souda Bay on February 1, 2003.The contract is one of the largest in recent history awarded toa Greek company. It is a large and complex operation involvingdozens of Aegean employees and 12 bunker vessels andtankers dedicated exclusively to the project. Fuel is comingfrom both Greek and foreign refineries.Aegean’s contracts with the DESC are multi-faceted. In additionto bunkering and chartering, an intensive pollution recoverysystem is in place to meet the stringent environmentalconcerns of both Aegean and the U.S. government.Despite the difficulty and complexity of the work, Aegeanhas surpassed the U.S. Navy’s needs and customer service requirementsthroughout the course of the contract. Aegeanemployees in Piraeus and Crete as well as the crew on the vesselshave performed well under difficult circumstances andtight deadlines to accomplish their work. Throughout theterm of the contract, Aegean has maintained a close workingrelationship with relevent officials at every level of the UnitedStates government to ensure success and client satisfaction.Our executive team is managing the activities at Souda toensure a timely and efficient operation, always keeping closecontact with officials at the United States Embassy, the U.S.Naval Military Sealift Command in Naples, Italy, theAmerican port officers at Souda Bay, and our partners inWashington, D.C. overseeing the work.Members of the Aegean team visiting the United States Embassy after the contract wasawarded to discuss the operation. L-R: U.S. Defense Attache Captain Thomas Wetherald,Mr. Spyros Fokas, Ms. Georgia Kounalakis, U.S. Ambassador Thomas Miller, andMr. Dimitris Melissanidis.Aegean’sMany well-known personalities from political, business,shipping, and financial circles attended Aegean’s annualgala party, which took place at the Rex night club on February25. The more than 1,000 guests in attendance atthe glamorous party hosted by Aegean enjoyed the performancesof Tolis Voskopoulos and Despina Vandi, twoof Greece’s most popular and legendary singers. Theirrepertoires of both old and new hits were received enthusiasticallyby the guests, who sung and danced into to thewee hours of the morning.4 AEGEAN NEWS SPRING 2003

Dimitris MelissanidisAn Interview with Thanassis LalasMr. Melissanidis discussed his career with Thanasis Lalas in VIMagazino,the magazine of Vima, Greece's leading Sunday newspaper.Mr. Melissanidis was born in Nikaia, where his parentssettled after a violent expatriation from Pontosin the Black Sea region. He created his first job byestablishing a driving school with a borrowed carand took the plunge into business when he transporteda load of timber to Tehran. At the same time,he entered the world of football, working withIonikos FC Club, which he managed to bring to FirstDivision ranks. But his dream was to lead AEK FCfootball club—a dream he managed to realize. "Istudied at Ionikos FC Club and I took my postgraduatedegree from AEK FC Club," he says.Mr. Melissanidis entered the shipping and petroleumbusiness after establishing a partnership with YannisKarras. Their paths crossed at AEK FC Club, butlater they parted ways, as, he says, "We did not agreeon tactics, strategy, and policy." His collaborationwith Dusan Bajevitch led to the creation of a footballteam that proved its worth with years of sure, stable progress. In the petroleumfield, he started with one barge and eventually managed to build a small empire,which now comprises a fleet of 26 tankers, bunkering operations, an oil tradingcompany, and a network of 280 petrol stations.To what does he credit his success? In addition to his luck and his instinct, he mentionshis good word and his hard work. When he faces a new challenge, he says, "Ihave a feeling that I am going to make it." His next goal is to have a network of 600petrol stations throughout Greece, and to "reach goals without stepping on people."On the WebAEGEANs new web site, www.aegeanoil.gr,with an innovative design and dynamicgraphics, is geared to AEGEAN’s clients andother parties seeking information about thecompany. The site is available in Greek andEnglish, and visitors can choose between asimple or flash edition for more graphicallyimpressive browsing. Menu bars can befound on the horizontal and vertical axes ofthe screen. To view the latest business newsabout the AEGEAN group, users click on thebrightly colored button labeled "Our News."On the vertical axis of the site, users canmove quickly to information regarding thepanorama of activities of AEGEAN: the internalretail market, oil news, bunkering, lubricants,agencies, and shipping. Each sub-fieldoffers a scroll bar for quick access to furtherinformation. An important function of theweb site is the opportunity for users to requestfurther information just by clickinginfo@aegeanoil.gr, available on each page.Annual Gala PartyThe party was attended by ministers, members of Parliament,ship owners, oil and shipping executives, and diplomatsas well as by bankers, insurers, journalists, and sportspersonalities. The attendance of members of Parliamentfrom Northern Greece and Evros at the gala was particularlynotable. The presence of so many Greek and internationalVIPs at Aegean’s gala event this year reflects thestrong relations between the company and the people workingfor it as well as the status and image of the company inGreek and international markets.SPRING 2003 AEGEAN NEWS 5

FLOWS & CURRENTSPutin Advances Burgas Oil PipelineRussian President VladimirPutin has pledged his country'ssupport for the constructionof an oil pipeline toconnect the Bulgarian portof Burgas with the northernGreek city Alexandroupolis.The pipeline will carry oilfrom the Caucasus intoGreece, eliminating tankers passingthrough the Bosphorous Strait in Turkey.Greece, Bulgaria, and Russiaare all to be involved in theproject, which will extend312 kilometers. Greece andBulgaria have signed anMOU to proceed with thepipeline construction and areawaiting the final go-aheadfrom Russia. Bulgaria andGreece will seek up to ú120 million inEU aid for the project.Australian Energy AllianceThe oil and gas industries will benefit from the establishment of a world-class energy technologyresearch alliance signed recently in Western Australia. "The new alliance will provideadditional premium quality research and development and services, aimed at developingtechnology-based solutions for the global energy sector," said Greg Thill, CSIRO'sActing Chief of Petroleum Resources. The agreement signed between the University ofWestern Australia, CSIRO's Division of Petroleum Resources and Curtin University will enablethe research organizations to share knowledge, skills, and facilities for more efficientdelivery of solutions to industry in areas such as sub-surface technology, drilling andwells, energy facilities, and energy science.~Electricity TradeRussia is striving to increase its electricitytrade with the EU. The Russiansargue that expanded trade wouldincrease security of EU electricitysupply, strengthen competition, andgenerate cash to upgrade Russia'selectricity sector, which is in dire needof improvement. Currently, only 2% ofall electricity generated in Europe istraded between regional markets, andFinland is at the moment the sole importerof electricity from Russia. Asthe EU expands eastward, the idea of amore active market is appealing tomany policy experts, who nonethelessadmit that many hurdles—includingenvironmental concerns—need to beovercome first. Russia hopes that increasedelectricity trade will alsostimulate investment in the country’soil and gas sectors.EmergencyReservesProposed Greek legislation would requireany company importing crude petroleumor petroleum products to keep an emergencystock on hand, regardless ofwhether it is a refinery, trading company,or even petrol station. Each importerwould be required to keep a 90-dayemergency stock, or about 25% of thetotal annual quantity of crude and refinedpetroleum imported. The proposed newlaw, the Regulation on Emergency StocksReserves, will be voted on by lawmakerssoon. The intention of the legislation is tobuild the foundation for a more flexiblepolicy to help Greece be better preparedto face oil crises—or potential oil crises—like the war in Iraq.EU to Accelerate Banon Single-Hull TankersEuropean Union transport ministers approved an acceleration of aban on single-hull tankers carrying heavy fuel oil to year 2010from 2015, as originally scheduled. Greek Transport MinisterChristos Verelis said, "We support all rules and measures thatlead to a strengthening of the quality of maritime transportationwith top-level services and respect for the environment." Theministers also agreed to a transition period for small single-hullvessels (weighing up to 5,000 tons), which are needed to supplysmall islands with fuel. The vessels must be withdrawn by 2008.Greece & Qatar in Bilateral TalksGreek Deputy Foreign Minister Andreas Loverdos held talks with Qatari Economyand Commerce Minister Hamad bin Faysal Al Thani bin Thani on bilateraleconomic cooperation. The Qatari Minister said that none of the involved partieswant to see a destabilization of market and crude oil prices but noted that the warin Iraq was indeed causing fluctuations. Under normal conditions the price of oilshould not exceed $28–$30/barrel. Qatari officials expressed interest in supplyingGreece with natural gas. Currently Greece imports gas from Russia and Iran.6 AEGEAN NEWS SPRING 2003

Greece & Turkey Sign Pipeline AgreementAn intergovernmental agreement for a natural gas pipeline betweenGreece and Turkey was signed in Thessaloniki by Greek Minister ofDevelopment Akis Tsohatzopoulos and Turkish Minister of Energyand Natural Resources Mehmet ∏ilmi Guller. The natural gas pipeline,which will connect the two countries, is slated to be 285 kilometerslong, spanning from Karatsabei, Turkey to Komotini, Greece. Its officialname is Interconnector Turkey-Greece (ITG). The portion of thepipeline on Greek territory is to be 85 kilometers long and an internationalprocurement has been announced. for the construction ofthe pipeline between Alexandroupolis and Kipi Evrou. It is estimated that the pipeline willstart operating by the end of 2005. Its initial annual capacity will be 3.5 billion cubic meters,with an expansion capacity of up to 11 billion cubic meters. The total cost is estimated at ú250million and the cost for Greece should total ú118 million, 29% of which will be paid by the EuropeanUnion and another 29% by the Greek government through the Public Investments Program.The remaining 42% will be funded by DEPA (the Public Natural Gas Corporation).Energy: Next Engine of Growth?Many analysts are suggesting that theenergy sector may become the nextnew "hot" growth engine of the globaleconomy, much like the role technologyplayed in worldwide economicgrowth during the last 20 years. Asthe global economy suffers from unevendevelopment and energy needsare increasing in every corner of theworld, experts believe that massivedemand accompanied by an unstablesupply will result in vast amounts of16%41%22%15%6%research and development to improvetoday's energy technologies and todevelop new ones. Experts cite China,which has been growing at over 8%annually, as just one example of amarket that will increase its energyconsumption dramatically. Since analystssee oil as the dominant sourceof energy for many decades to come,efforts to improve extraction methodsand overall fuel efficiency will beparamount to the oil industry.Gross Domestic Energy Consumptionin the EU and GreeceEU-15Ellada35%60%0%0%5%Solid fuels Oil and oil Products Natural gas Nuclear RenewablesRecyclingCars, batteries, and mineral oil arenow on the list of products thatwill have to be recycled accordingto a presidential decree signed byEnvironment, Town Planning, andPublic Works Minister VassoPapandreou. In an effort to stemthe flow of waste filling uplandfills and conform to EUlegislation, Greece is implementinga new series of measures that willrequire consumers return a widevariety of goods for recycling. TheMinister is expected to add cartires, electrical appliances,electronic goods, and buildingrubble to the list in order toreclaim up to 85% of waste fromthese products.Advice to OPEC:CautionThe International Energy Agency(IEA) urged the OPEC oil cartelto be cautious in reducing oilsupply, saying prices were still toohigh for companies to rebuildstocks. With Iraq not yet exportingand no new supplies entering themarket, IEA chief Claude Mandilsaid, "I think OPEC should be verycautious before taking strongdecisions on output." Mr. Mandilalso said stocks are beginning toincrease but "prices are still toohigh for that."SPRING 2003 AEGEAN NEWS 7

INTERVIEWGreece’s Development MinisterForesees Oil SurplusThere will be a major decrease in oil prices in the second half of 2003, Akis Tsohatzopoulos,the Greek Development Minister, tells Aegean News. "We are entering a phase during whichoil will be abundantly available," he says, "and this will lead to a considerable decrease inprices, which will compensate for recent financial losses."Before the war started, the price of crude oil rocketed to over$30 per barrel. Now, it is at a considerably lower level. In whatdirection do you see prices going in the coming months?Experts estimate that Iraqi oil production will increase in afew months’ time, and will reach 2–2.5 million barrels perday. There will be a surplus of oil in the market and marketpressure will force prices down, thus compensating for thefinancial losses of the previous months. At the same time,international economists estimate that after foreign capitalstarts streaming into Iraq, production could reach 3.5 millionbarrels per day within the next two years, and doublethat amount in a decade. So prices we’ve seen recently, like$30 dollars per barrel, are almost a thing of the past."Iraq’s production will increasein coming months and oil prices willgradually decrease."At the beginning of February, there was fear that with the outbreakof war there would be speculation in the domestic oilmarket. Now, two months later, how do you judge the marketreaction?The domestic market, made up of petroleum companies andpetrol stations, operated perfectly during the crisis. Datashow that the price of unleaded petrol increased at a considerablylower rate than that of crude oil. Two things playedan important role in this: First, the smooth operation ofcompetition and regular publishing of fuel prices by theMinistry. Second, the new institutional framework on thepurchase of petroleum products (Law 3054/2002), whichcontributed decisively to a smooth market operation. Thislaw was recently implemented and includes the operation ofa crisis management committee, petroleum market monitoring,as well as Groups of Controlling, Distributing andStoring Fuel (KEDAK). In short, we managed to get out ofthe crisis with minimal consumer impact and minimumdamage to the economy.You’ve stated that Greece didn’t suffer any serious losses inthis crisis. However, there is another challenge ahead: The upgradingof the Greek energy network by its connection to thetrans-European energy networks. And there are many delays inthis area?First of all, I agree that the venture that will make Greecethe energy hub of the southeastern Mediterranean is a verytough wager, and one we have to win. Many important stepshave already been taken. Take for example the petroleumfield. The intergovernmental agreement on the Burgas-Alexandroupolis oil pipeline linking Greece and Bulgaria isto be signed soon by Russia as well. Important steps havealso been taken in the area of natural gas networks. InThessaloniki we recently signed a cooperation agreementfor the construction of a natural gas pipeline from Thessalonikito Austria via the Balkans (FYROM, Serbia-Montenegro,Bosnia-Herzegovina, Croatia, and Slovenia). Thatand the proposed underwater Greece-Italy pipeline, whichis currently being evaluated, concern the transfer of naturalgas from the Caspian Sea and Iran to Europe.Greece is pushing for a pipeline linking Greece to Turkey. Atwhat stage is the implementation of that project?DEPA (The Greek public natural gas corporation) isready to start construction of the pipeline, which isplanned from Komotini to the Greek-Turkish border inEvros. However, it must be made clear that the projects are8 AEGEAN NEWS SPRING 2003

Our EuropeSharing the Futurein a Community of ValuesThe Prioritiesof the GreekPresidency 2003∂nergyAkis Tsohatzopoulos | Development Ministernot going to start unless the Turkish side can secure financingfor its part of the project.As far as the major Greek privatizations are concerned, thegovernment is making DEPA a priority. Recently, the Greek Ministerof Finance, Mr. Christodoulakis, characterized the sellingoff of 35% of DEPA to a strategic partner as the most importantprivatization of 2003.As you know, DEPA has been recently presented to candidateinvestors. Representatives from selected companies in the tenderoffer were present, including ELF (France), Gaz Naturale(Spain), ENI-SNAM (Italy), Rurgaz-Prometheus (Germany/Greece-Russia),Gazprom (Russia), and Sonatrak(Algeria). The government hopes to secure ú300–350 millionfrom the sell-off, and, according to the timetable, the tenderwinner will be chosen by the end of June. I believe the selectedpartner will, as we all want, secure DEPA’s access to new,strong markets through its experience.Development of a strongand competitive energy sectorA steady and sustainable development of European economicsrequires easy access, free from any technical or economic impedimentsto available energy sources for the production ofgoods and services. This makes it imperative to secure adequatesupply of available energy sources and to carry through the liberalisationof the internal electricity and natural gas marketwhilst developing, at the same time, all essential energy connections,both within Europe and with the new developing energyproduction centres in the European periphery. With a view toachieving a balanced development of the energy policy’s social,environmental and competitive component, we will aim at ensuringwider integration of sustainable development in the Union’senergy policies. In the context of these objectives, the GreekPresidency will seek to secure oil and natural gas supplies, coupledwith the deregulation of the internal electricity and naturalgas market (by providing public service and consumer protection)and the development of trans-european networks.Sustainable development and energyIn the context of sustainable development, the Greek Presidencywill encourage the use of renewable energies, rational use andconservation of energy, the co-generation of heat and electricityand the establishment of common rules for the safety of nuclearplants and the handling of nuclear waste and fuel.The international dimension of energyWith a view to ensuring the economic viability of EU energy policies,international cooperation in the energy sector should bepromoted, in particular with Mediterranean partners, Russia andthe countries of South-East Europe.SPRING 2003 AEGEAN NEWS 9

CRISESWar CreatesHeavy Burden on EconomyThe end of the war is not enough to heal the wounds in the Greek and global economies—wounds inflicted by months of international economic uncertainty, weakness in consumerdemand in European and Middle-Eastern markets, the recession in tourism, stock marketinstability, and oil price increases.The end of the war in Iraq mayhave brought rapid decreases ininternational oil prices comparedto pre-war levels, but the Greekeconomy has already suffered.The fact that the price of the crudeoil was over $30 per barrel from Novemberto March, combined with otherinflationary pressures at the beginningof the year, resulted in continuousprice increases for Greek products andservices. Many industrial businesses inthe Greek economy have increasedprices beyond the rate of inflation fortheir products in the past months.Prices for plastics, chemicals, anddyes have increased since their basicraw material is heavily dependent on theprice of crude oil. Other sectors such asmetallurgy, cements, and textiles werealso forced to increased prices since aconsiderable part of their operationalcosts depend on the cost of oil.But households suffered the most, asthe price of heating oil increased by upto 40% from October to February.The war exposed a variety of problemsin the Greek economy, one ofwhich is the country's oil dependence,shown to be greater than any otherEuropean Union member state.“Oil crises usually lead to inflation spikes because rawmaterials become overpriced, which in turn leads to anincrease in product and labor costs, creating a viciouscircle of continuous price increases”.Greece is a "champion"of oil consumptionRecent data show the share of oil in thetotal annual Greek energy consumptionis 67.95%, whereas the EuropeanCommunity average is just 49.4%.Natural gas meets a major part ofthe energy needs in Europe—24.2% ofthe European average—whereas inGreece it accounts for 2% of total annualenergy consumption.Two oil crises: 1973 and 1980The way the Greek economy reactedduring the major oil crises of 1973and 1980 demonstrates some usefulconclusions about the behavior of theGreek economy during periods of oilprice increases.In the first oil crisis in 1973, whenthe Arab world imposed an oil embargoon countries friendly to Israel, theprice of crude oil increased by 300%.Inflation rocketed in both the U.S. andEurope. In 1974, the inflation rate ofOECD member states was 13.4%,whereas in Greece it was double that—at one point reaching 26.9%.In the second oil crisis at the beginningof the 1980s, after war broke outbetween Iraq and Iran, Greek inflationrose to 24.6% whereas in OECDmember states it averaged 12.8%.10 AEGEAN NEWS SPRING 2003

45International Petroleum Prices: 1970-20024035PRICE PER BARREL ($ U.S.)30252015105019701972197419761978198019821984198619881990199219941996199820002002The Lesson of the Oil CrisesMajor oil crises have demonstrated that oil prices follow an increasing trend every time there is a possibility of warin the Middle East, and immediately after the outbreak of war this trend ends.1973—Oil embargoThe only exception to this was during the Arab-Israeli war, which broke out in 1973 following the oil embargo imposed on theWest by OPEC. Countries friendly to Israel were cut off from Middle Eastern oil supply and crude oil prices rocketed from $2.5per barrel to $6 per barrel. The embargo ended on March 18, 1974, by which time crude oil prices had exceeded $10 per barrel.1979—Iranian RevolutionBy the time the revolution in Iran began in 1979, oil prices had risen to $14 per barrel. OPEC decided to increase prices by14.5%, sending the price to $17 per barrel, and later to $20 after another 15% increase. The price reached $25 per barrelwhen the Iranian regime captured American hostages. President Carter banned Iranian oil imports and Iran, in turn, cancelledall trade contracts with the U.S., resulting in even higher prices.1980—Iran-Iraq warThe outbreak of war between Iran and Iraq saw oil prices skyrocket to $40 per barrel. The high prices eventually came underpressure, and lead to several decreases. The war ended in 1988 with the warring countries signing a truce. Oil prices droppedto $15 per barrel.1991—Iraq Invades KuwaitThe price of crude oil was $15 per barrel before the Iraqi invasion of Kuwait. When "Operation Desert Storm" began, the pricerocketed to $40 per barrel. Then the price of oil started falling and on the February 27, 1991, when the war ended, it had againfallen to below $15 per barrel.SPRING 2003 AEGEAN NEWS 11

INFRASTRUCTUREPiraeusGreece’s Main PortPuts on a New FaceThe largest port in Greece is in a race against time. By 2004, 17 major projects relatedto the Olympic Games will have been completed, including a tramline, two new marinas, anunderground parking lot for 700 cars, and new berths for cruise ships. Piraeus' renewal effortswill continue after the Olympic Games, when its ú600 million face-lift will be completed.Piraeus’ image and stature havebeen suffering for years. In the1980s, more than 300 industrialcompanies and more than 1,000trading companies closed, eliminatingthousands of jobs. In the 1990s, shippingcompanies, which had traditionallybeen headquartered in the area,began moving away, to the north of thecity. The importance of the oncemighty financial center was eroding.But EU Third Community SupportFramework funds and Olympic Gamesfunding are beginning to heal thewounds inflicted on Piraeus. Nextyear, 2004, will be a landmark for Piraeusand its residents, when a varietyof important projects will have beencompleted. Among them are the renovationof the Flisvos and Zea marinas,the renovation of the area surroundingPiraeus Port Authorities S.A. (OLP)conference facility, the restoration ofthe historic center, and the renovationof the Peace and Friendship Stadium.In addition, the city's university willhave a new home at the site of a formerretsina factory.The projects, now underway, areturning many areas of the city intoheavy construction sites but will have agreat impact on changing the image ofPiraeus. New berths for cruise ships, anew 5-star hotel in the Palataki area,and the creation of a new passengerstation in the Vassiliadis area are theprimary projects planned for the centralport. It is estimated that on the basisof the elaborate plan, the total costof all the public works projects in Piraeuswill exceed ú600 million.Port construction projectsvalued at ú45 millionAccording to data published in the"Piraeus in 2004" white paper, worksat the central port alone are estimatedto have a value of ú45 million. Thenew berths for cruise ships are in thefinal stages of construction and whenthey are completed passenger transportcapacity will increase by 30%.According to officials, there will be7,000 cruise ship cabins availableduring the Games, 30% of which willbe assigned to the Olympics OrganizingCommittee. The rest will be availableto the public. The new passengerstation will have been completed byDecember 2003, and the hotel atPalataki in December 2004. Themodern water supply network in thecentral port is expected to be concludedin December 2003, the landscapingof the surrounding area in March2004, and the construction of the undergroundparking lot, with a capacityof 700 parking spaces, in July 2004.According to the white paper, thePeace and Friendship Stadium willhave been renovated by December2003—along with the marina behindthe stadium—while the Piraeus MunicipalTheater is expected to be completelyrestored by April 2005.12 AEGEAN NEWS SPRING 2003

PHOTOS: YIORGOS DEPOLLASSPRING 2003 AEGEAN NEWS 13

INFRASTRUCTURETzanio Hospital, which will meetathletes’ and spectators’ health-careneeds, will have a new wing by December2003, and the Ministry ofMerchant Marine will be located in anew building on Akti Vassiliadi by theend of the year. These projects are expectedto cost roughly ú104 million.Transportation projectsvalued at ú430 millionIt is estimated that ú430 million willbe appropriated for projects that includethe new interchange for thePeace and Friendship Stadium, whichwill be concluded in April 2004, theAthens-Piraeus Electric Railways(ISAP) metro station at Faliro, to berenovated by December 2003, and therenovation of the Greek Organizationof Trains (OSE) railway station atsome point in 2004. This station willbe used for commercial operations andas a business center, in line with internationalstandards. It will serve as thestarting and ending points for trains toand from Northern Greece and thePeloponnese, and will cover the needsof combined transport from the port.It will also be part of the new suburbanrail line and will be close to theISAP metro station. It is believed thatthe upgrading of the central train stationwill be a factor in attracting newprivate investment in the area.MarinasThe Flisvos and Zea marinas will undergoface-lifts with an additionalú55 million in investment. Managementof the ports has moved into privatehands, with two new joint ventures.One of them, Lamda Technol“The modernization of the water supply network at thecentral port is expected to be concluded in December2003, the landscaping of the surrounding area in March2004, and the construction of the underground parkinglot, with a capacity of 700 parking spaces, in July 2004.”Flisvos Marina, plans to promote theFlisvos marina as one of the most attractivein the Mediterranean. It plansto host primarily large pleasure yachtsthroughout the year. In addition toproviding services for yachts, the companyalso will offer integrated servicessuch as hotel accommodation and conferenceassistance. The second jointventure, Marina Zea S.A., has quitedifferent plans for Zea marina. ThePiraeus Mayor Agrapidis“The 2004 Olympic GamesPresent an Opportunityand a Challenge”"Piraeus is in a transitionalphase, seeking anew economic direction.The only stableparameter—its competitiveadvantage—is itsport. An entire range of infrastructureprojects is designed to keep the portalive, which is why the 2004 OlympicGames and EU Community Support Frameworkfunding constitute a unique opportunityfor Piraeus to upgrade its profile.At the same time, the city must take advantageof its most important asset: thesea. The fragile marine balance and accessof Piraeus residents to the sea mustbe restored. The biological purificationcenter at Psitaleia, when concluded, isexpected restore the marine ecosystem,which has been disturbed for many years.And I believe the beaches of Votsalakiaand Freatida will be full of swimmers onceagain this summer."14 AEGEAN NEWS SPRING 2003

The New Faceof OLP(PIRAEUS PORT AUTHORITIES S.A.)Investor interest is expected toincrease after a ú35 million face-liftin the central port area surroundingPiraeus Port Authorities S.A (OLP)conference center is completed.Major Public Works Projects at Piraeus PortProjectEstimated Date of CompletionTrain station 2004Tramline May 2004Peace and Friendship Stadium interchange April 2004Tzanio Hospital (addition and structural support) December 2003Peace and Friendship Stadium (restoration) December 2003Underground parking lot (700 parking spaces) July 2004Port landscaping March 2004Port water supply network (modernization) December 2003New passenger station December 2003Hotel (Palataki) December 2004company wants to use the area surroundingthe marina as a recreationarea for residents and visitors. Themarina will have a capacity of 670boats through the use of floating piers.The Piraeus real estate marketFollowing the trend in other urbanGreek areas, in the last 30 years Piraeushas become a densely populatedcity, with 19,000 inhabitants persquare kilometer. In Stockholm, bycomparison, there are 4,000 inhabitantsper square kilometer. The denseconstruction, lack of open areas, andnewly-constructed blocks of flats, inaddition to traffic problems, have keptmarket demand for real estate in thecity center low. Prices have also remainedstagnant. The saturation ofbuilding in the area and changes in theport's suburbs have turned buyer interestto areas such as Keratsini,Drapetsona, Korydallos, Nikaia andNeapoli. On average, newly builtapartments cost ú1,600 to ú1,760 persquare meter in the more desirablewestern regions. Business premises inthe area are relatively low-priced, andinterest is primarily on the main arterialroads (Pireos, Kifissia, Thivon,Petrou Rali, and Iera).Although prices are low comparedwith Athens, these areas are nowstarting to gain ground in the real estatemarket. Moreover, large investmentgroups have expressed interest inthe area. One example is the GreekNational Bank, which plans to createone of the largest theme parks inSoutheast Europe in an old fertilizerplant in nearby Drapetsona.● In the central port, and the areasurrounding the OLP exhibition andconference center, companies involvedin a wide range of port activities aresuffocating. Illegal parking and streetpeddlers create extensive traffic jams,poor air quality, and noise pollution.● Current works attempt to bring aradical change to the OLP area.Construction projects, includingparking lots, entrance gates to thefacility, recreation areas, and ticketbooths, are expected to easecongestion and drive peddlers away.● The value of these projects is estimatedat ú35.2 million, the majority of whichwill be covered by European Unionfunds and the remainder by OLP. Thefirst phase of renovation in the centralport has been concluded at a cost ofabout ú5.8 million.● Experts believe that with the OLPrenovation and the completion ofimportant infrastructure worksconnected with the Olympic Games,Piraeus will again be in the position toattract investment interest.● Office premises in the center ofPiraeus have been suffering from lowdemand and correspondingly lowprices in recent years. Poorinfrastructure has prompted manyshipping companies, which hadtraditionally been headquartered in thearea, to locate elsewhere.SPRING 2003 AEGEAN NEWS 15

INTERVIEWJacob Melissanidis:“600 Petrol Stations by 2006”Aegean is planning to increase thenumber of its petrol stations from 280to 600 in the next three years.Aegean Oil entered the petroleum market in 1999. Itwas difficult to imagine that this small companyfrom Evros would, in just three years, be among thefastest growing companies in the petrol trade. In those threeyears, Aegean has managed to develop a network of 280petrol stations spreading from Alexandroupolis to Tinos.The next goal of the company is more ambitious: "In thenext three years, we aim to increase the number of our petrolstations from 280 to 600," Aegean Managing DirectorIakovos Melissanidis reveals to Aegean News. He also saysAegean’s secret, which has made it a formidable competitoreven against industry giants, is simple: "Our aggressive invoicepolicy, our clever marketing methods, and our flexibility, whichallows us to make quick decisions, has led to our 4.5% marketshare, and we now aim for an 8% share by 2006."How did Aegean begin?Aegean entered the Greek market by taking over Evroil atthe end of 1999. We started in the remote Thrace regionbecause we believed in the potential of the area. NowAegean has a network of 200 petrol stations in Evros andthe Thrace-Macedonia region."We follow an aggressive pricing policyoffering low prices to the consumer,but not at the expense of petrol qualityor services."Aegean follows an aggressive pricing policy. What are the mainfeatures of this policy?Indeed we follow an aggressive pricing policy, offering lowprices to the consumer but not at the expense of fuel qualityor services. We respect the rules of legitimate competition.Our simple organizational structure makes us moreflexible than our competitors. Our competitive advantage isour low prices. Aegean and all its competitors buy fuel fromthe same Greek refineries. So there is no way to explain highprices apart from higher profit-making, which the consumerpays for. This is the "secret" which has led to our4.5% market share, and the "secret" which we believe willlead us to an 8% share by 2005.What are Aegean’s plans for the Greek islands?We already have a petrol station in Tinos and we arepreparing to run two specially converted ships for the islands.Therefore, our company will be able to carry fuels toall the islands on our own ships at low prices, as we will decreaseour operation costs.What is your strategy for the near future?Our aim is to expand our network. We want to increase thenumber of Aegean petrol stations from 280 to 600.We place a high value on our relationship with petrol stationowners. We have stood by them from the very beginning,listening to their needs, and helping to find solutions to theirproblems. The petrol station owner is our partner, andlearns through experience that we always stand by ourword. This has become known in the market and as a resultmany petrol station owners have expressed their interest injoining the Aegean family when their contracts with othercompanies end.16 AEGEAN NEWS SPRING 2003

KILKIS SERRESPELLA 1020FLORINA231THESSALONIKIIMATHIA21KASTORIA13KOZANIHALKIDIKIPIERIA86GREVENA31IOANNINA1TRIKALALARISSATHESPROTIA223CORFU2 KARDITSAPREVEZAARTA2MAGNESSIAEVRITANIA1FTHIOTIDALEFKADA4AITOLOAKARNANIAKEPHALONIAFOKIDA2EVIAVIOTIADRAMAXANTHI1010 RODOPIKAVALA109THASSOSSAMOTHRACELIMNOSLESVOSSKYROSHIOSEVROS45ZAKYNTHOSACHAIA1 3KORINTHIAILIA1 ARCADIA ARGOLIDA10ATTIKA20ANDROSTINOS1IKARIAMESSINIA1LAKONIASYROSPAROSNAXOSMILOSAMORGOSKOSKYTHIRASANTORINIASTYPALIAAegean’sRetail NetworkHANIACRETERETHYMNOKARPATHOSRODOSIRAKLIOLASITHIpetroleum & pricesPetroleum in Greece: An Upward TrendDemand for oil in Greece has been steadily rising, due mainly to an increase in use fortransportation, and is expected to continue its upward trend for the foreseeable future.In the Greek economy, oil is a significant factor, and accounts for 65% of all energy use.Many industries are making the change to natural gas for their energy needs but the increasingdemand for transport, especially in automobile use, means that oil will continueto be in high demand.The map is current as of 26.03.03The Cost of CrudeCrude oil costs have risen to near historic levels inthe past few months, peaking at $39.99 per barrel onFeb. 27 – up from $22 a year earlier. Since then, priceshave decreased, dropping below $30 a barrel in lateMarch – a fluctuation of more than 25 percent in lessthan a month.SPRING 2003 AEGEAN NEWS 17

Retail Salesπncreasing by 25,6%For the third consecutive year Aegean Oil has posted the largest sales increase in thedomestic market, according to data made public by the Greek Development Ministry.In 2002 there was a 25.6% increasein Aegean Oil’s petrol station fuelsales, which reached 335,010 metrictons—up from 282,708 metric tonsin the previous year. The sales increasehas continued at the same rate duringthe first four months of 2003, and thecompany's investment program shouldincrease the number of Aegean petrolstations from 280 to 300 by the end ofthe year. Although most of Aegean’spetrol stations are in Northern Greece,the company is now expanding to southernand western Greece. In 2002, accordingto Ministry of the Developmentdata, Aegean ranked seventh among 19Greek petroleum product companies.Retail NewsSTATION HOURSThe working hours of the petrol stationshave been determined by a newministerial decision. Petrol stationswill be open during the day for fourteen(14) hours without break (06.00– 20.00) from October to April andfor fifteen (15) hours without break(from 06.00 – 21.00) from May toSeptember.The Prefects will decide on whichgas stations in each prefecture will beopen for the remaining hours of theday, in addition to hours noted here.According to the above provisions, thenumber of petrol stations open duringthe night cannot be less than 10% andmore than 20% of the total number ofpetrol stations in each prefecture. OnSundays and holidays, only petrol stationsdetermined by decisions of therelative Prefects will be open. Thenumber of these petrol stations cannotexceed 50% of the total number ofpetrol stations in each Prefecture.GLOBAL PRICE TRENDSAccording to a recent ChevronTexacoreport, in Australia, a liter of gasolinestands at $1.10 (US $0.66). In the UnitedKingdom, unleaded gasoline hasrisen to almost 80 pence (US $1.24) aliter. And, prices have moved past $2 agallon ($.52 a liter) in some parts of theUnited States – the largest market forgasoline, consuming 9 million barrels ofgasoline a day, 44 percent of the world’stotal consumption, according to the U.S.Energy Information Administration.PRICE FACTORSMarket prices are determined by supply,demand and competition. And,this year, a confluence of factors, accordingto the American PetroleumInstitute, has led to a rise in crude oilprices and corresponding hikes to theprice at the pump.18 AEGEAN NEWS SPRING 2003

LUBRICANTSAegean and ChevronTexacoA Strong AllianceThe Aegean retail network is successfully collaborating with ChevronTexaco,one of the largest oil corporations in the world.ChevronTexaco Global Lubricants—towhich the strategicpartner of Texaco Greece S.A.belongs—is the lubricants subsidiary ofChevronTexaco Corporation, whichbecame the second-largest energycorporation in the U.S. after last year’smerger of Texaco and Chevron.Based in California, ChevronTexacoGlobal Lubricants is the only corporationin the world with four lubricantresearch centers. It is active in the productionand trading of high-qualitylubricants and is always on the cuttingedge of technology.ChevronTexaco is active inthe production and tradingof high-quality lubricantsand is always on the cuttingedge of technology.A New Erafor Havoline LubricantsTexaco heralded in a new era forHavoline lubricants, introducing newpackaging for the top lubricant group.The new packaging look goes hand inhand with Havoline’s ongoing lubricantinnovations while at the sametime reflecting the long tradition anddynamic progress of Texaco worldwide.Texaco collaborates with the largestcar manufacturers in the world to designand develop products for cars.Havoline lubricants provide protectionand improve performance, as theyhave been designed and developed withthe car industry. Havoline’s new packagingis distinguished by its dynamicdesign, the grooves in its handle, theshine of its label, and its reader-friendlyconsumer information label.The New Generationof Gas Additives of TexacoIn May, 2002, Texaco launched a newgeneration of gas additives: CleanSystemPlus and CleanSystem Extra. Thesetwo products succeeded CleanSystem3and constitute an overall improvementsystem for the engine, ensuring betterperformance, more economical operation,and fewer emissions.CleanSystem Plus is the only fifthgenerationadditive which has thepower of CleanSystem3, cleans all engineparts from deposits, and preventsthem from rebuilding.CleanSystem Extra is the onlyproduct that cleans the entire intakeand fuel distribution system of a car,thus improving engine performanceand power, and enabling the horsepowerand engine acceleration to reachmaximum levels. By using the concentratedCleanSystem Extra every 5,000kilometers, combined with regular useof CleanSystem Plus, consumers canhave a "new" car while at the same timecontributing to the protection of theenvironment.Konstantinos PoursanidisDomestic Market ManagerKonstantinos Poursanidis heads thedomestic market operations at AEGEAN.Mr. Poursanidis studied business managementand received his universitydegree from the University of Piraeus.He has been active in the oil sector for25 years. He spent 23 years at Texacoand a year and a half at Shell. Since April2002 Mr. Poursanidis has been atAegean. His primaryresponsibilitiesinclude the retail stationnetwork, programmingfuels fromthe refiniries, andnegotiating with thegovernment.SPRING 2003 AEGEAN NEWS 19

AEGEAN PEOPLECostas TrigasAegean Petrol Station Owner—and ArtistCostas Trigas lives on the island of Tinos and owns one of the hundreds of petrol stations inthe Aegean Oil family. Mr. Trigas, though, is well known to the people of Tinos, as well as thetourists who visit it every year, for something else: his sculptures.When he started sculpting in1999, Mr. Trigas could neverimagine that three yearslater, everyone—even art critics—wouldspeak so highly of his talent and originality.Today, Trigas’ work is exhibitedat the Exomvourgos archaeologicalcastle in Tinos, where visitors marvelat his imagination.Trigas is a self-taught sculptor. Althoughhe was not born on the island,the tradition of Tinos, which has producedso many internationally recognizedmarble sculptors, certainly hasprovided fertile ground for the AegeanOil petrol station owner’s talent.During his free time, he gives life torocks and stones, creating designs inspiredby the ancient Greeks and thenatural environment. He primarilyuses local materials such as marbleand soapstone. With his chisel and hisimagination as his tools, the artist“During his free time, Mr. Trigas gives life to rocks andstones, creating designs inspired by the ancient Greeksand the natural environment of the island.”transforms these materials into sculpturesthat exude life.Mr. Trigas’ main source of inspirationis the natural beauty of the islandwhere he has been living and workingfor years. Tinos is an impressive, beautifulisland which itself seems to havebeen sculpted by the hand of an artist.Tinos’ villages—such as Volakas,built on an otherworldly, almost lunarlandscape; the island’s beaches such asKolymbethra, with its large gray rocks;and its isolated monasteries high onmountaintops—all provide a continuoussource of inspiration for Mr. Trigas,the artist.20 AEGEAN NEWS SPRING 2003

Sales and AestheticsOn the UpswingThe petrol station owned by Mr.Georgiadis is in an ideal location:it is close to Thessaloniki'sMacedonia Airport, opposite the Hyattcasino, and next to a MercedesBenz dealership. But the petrol stationowner, who is also a prefecture councilor,had been selling only 70 cubicliters of gas per month for years.About a year ago, Mr. Georgiadiswas approached by Aegean representatives.After presenting their low pricingpolicy, the Aegean team managed toconvince Mr. Georgiadis that bychanging suppliers he would increasesales. Soon, he saw the results. As wordspread that his prices are among thelowest in the region, Mr. Georgiadisbegan selling up to 500 cubic liters permonth and his sales have room to increaseeven more. Apart from attractiveprices, the complete renovation ofhis petrol station has played an importantrole in sales growth. The renovationtransformed his petrol station intoone of the most impressive in Thessaloniki.His new identity and sales successhave helped earn him the "PetrolStation of the Year" title.According to Mr. Georgiadis,Aegean’s low prices are putting pressureon the multinationals to sell theirfuel at lower prices to remain competitive.And when he says "their fuel," hemeans the same fuel that Aegean sells,but under a different name. "All stationbrands—from BP to EKO to Shell—gettheir gas from the EKO ELDA refineryin Kalochori, and from the same tap. Itis a myth that multinationals offer consumersdifferent petrol than that offeredby other companies," he says.Two other competitive advantagesset apart Mr. Georgiadis’ petrol station.First, his is the only one selling liquidgas in the entire region from Thessalonikito Ioannina. And, in a move thathas proved to be exceptionally farsighted,Mr. Georgiadis acquired apermit for converting the petrol enginesof taxis and privately owned vehiclesinto liquid gas engines 22 yearsago. Petrol stations such as Mr. Georgiadis’are creating a new era in retailsales of which Aegean is proud to be aleader, and on the side of the consumerand the petrol station owner.SPRING 2003 AEGEAN NEWS 21

BUNKERINGOur Goal is to Expand withNew Bunkering StationsAegean first entered the bunkering market in Piraeus and today has a network of bunkeringstations expanding from the Mediterranean to the Persian Gulf and from the Atlanticto the Caribbean.Aegean’s plans for the future goeven further, with more stationsoutside Greece, said Mr.Nellos Filopoulos, bunkering managerof the company, in an interview recentlywith Naftika Chronika (MarineJournal), which the Aegean News isrepublishing below for its readers:Do you believe that Piraeus can re-enterthe bunkering market from a position ofstrength?Most ships going to the Black Sea used tocome to Piraeus for bunkering. That iswhat was happening two years ago.Many things have changed since then.After consistent increases in the pricescharged by refineries, Piraeus’ competitiveadvantage was lost and as a result theports of Istanbul and Gibraltar as well asthe Suez Canal became much more attractiveby comparison. If we want Piraeusto become competitive again, therefineries should revise their currentpricing policies. In addition, some timeconsumingand extremely complex customprocedures should be simplified.Aegean, however, continues its expansionin bunkering, establishing new stations.Aegean gradually expanded to Gibraltarand Fujeirah in the United ArabEmirates, after becoming the leadingbunkering supplier in Piraeus, thanksto its experience. In Gibraltar, after fiveyears of strengthening its operations,Aegean is now competing against industrygiants such as the state-runSpanish Cepsa, Shell, and ChevronTexaco.As far as the developing Fujeirahport is concerned, Aegean already hasan important share of the local market,"If we want Piraeus tobecome competitive again,refineries should reviewtheir pricing policies"even though it has only been there for ashort time. A fourth bunkering stationis under way in Venezuela with the cooperationof the national PDVSA.Aegean has already started deliveringfuel using two of the company’sbunkering ships, Nikaia (built in 1985,with a capacity of 4,000 DWT) in theport of Amuay Bay, and Evros (built in1993, with a capacity of 2,000 DWT)in the greater Maracaibo Lake region.We will soon be able to sell fuel in thesetwo ports. Our immediate goals includeestablishing other bunkering stationsoutside Greece which will improve thesales of our products and increase theAegean tanker income.Will small companies that do not belongto multinational consortiums be able toface such tough competition?The difference in operational costsbetween multinational companies andsmall companies is enormous. Theneed to reduce these costs is one of thereasons leading to so many mergerssuch Chevron-Texaco, Exxon-Mobil,and Totalfina-Elf. In the bunkeringmarket, Aegean is an independentcompany with an international salesnetwork, which enables it to competewith the multinationals. Aegean hasbeen ISO 9002-certified since 1999by the international firm Lloyds, and itis on the Fobas White List, ranked asone of the most reliable suppliers.Our ‘secret’—if I can call it that—isthat we don’t follow the "civil servantmentality." We are available 365 daysper year, on a 24-hour basis, and we¡ellos Filopoulosµunkering Sales Manager of AegeanMarine PetroleumNellos Filopoulos began his career inshipping in 1979 following his shippingstudies in England. From 1987–1992 hewas BP's sales manager for bunkers inPiraeus. From 1992,he worked as amanager of twotrade bunker companiesin London.He is currently thesales manager ofAegean Bunkering.22 AEGEAN NEWS SPRING 2003

offer high-quality services. That iswhy the biggest shipping companies inthe world have become our customers.What are the specifications for highqualityfuels?In our field, fuel quality is everything.Suppliers should give ship owners awritten guarantee that the fuels they sellcomply with the ISO 8217 standards,which are internationally recognized.Taking into consideration the fact thatAegean is active in Alexandroupolis, howdo you see the Bosporous market emerging?Can it become an important bunkeringstation for ships crossing the straits?Our neighbors, the Turks, are attemptingto establish Istanbul as a bunkeringport in order to claim theBosporous market, which is on the riseat the expense of Piraeus.The Turkish Bunkering Associationwas established two years ago, and itsestablishment is an indication of howthe Turks see growth in bunkering. InGreece there is no organization likethat, although Piraeus is a very popularport, regardless of the fact that isfacing some problems.Aegean-owned Ships Cater to BunkeringIn the bunkering station of Piraeus, refueling is carried out by five Aegean-owned shipswith capacities of between 1,000 and 4,500 MT. Ships can also be supplied at the docksby company-owned tank trucks.Three modern barges owned by Aegean are used in the Gibraltar station.Aegean is responsible for the bunkering station of Khor-Fakan-Fujairah in the United ArabEmirates, where products are transported by privately owned tankers and delivered tocustomers by company barges.In Venezuela, two privately owned ships cater to the needs of the bunkering station.All Aegean products are ISO 8217-certified and the agreements concluded between the companyand the world’s largest petroleum companies guarantee the high quality of the products.Aegean is ISO 9002-certified by Lloyd’s Register of Shipping & Industrial Services S.A.and occupies a top position on the Fobas White List.SPRING 2003 AEGEAN NEWS 23

SHIPPING26 Shipsin the Aegean FleetAegean entered the shippingsector in 1996 when it beganoperations with the shipTheopisti. Now, seven years later, thecompany manages a fleet of 26 shipsranging from 3,000 to 100,000 DWT,is ISM-certified, and offers its servicesto major petroleum and tradingcompanies throughout the world.In 2003, Aegean Shipping renewedits contract with the Tunis governmentfor the transportation of crude oil. ThePPC (The Greek electric power corporation),the Hellenic Air Force, andGreek state refineries have signed contractswith Aegean to help meet theiroil cargo transportation needs.Shipping newsReal estate exclusively used by shippingcompanies as offices or warehousesfor operational needs are exemptedfrom real estate tax, accordingto Greek Law 89/67. The exemption isstipulated in article 15 of the tax lawand has been voted into law by Parliament.More specifically, the articlestates that the companies having partialrights on real estate in Greece payan annual tax amounting to 3% of thevalue of the property. Shipping companiesthat have set up offices inGreece under Law 89/67 and shipowners of cargo ships are exemptedfrom this liability for any real estatethey occupy in Greece, as long as it isused exclusively as offices or warehousesfor operational needs. The exemptionalso applies to companies whorent real estate to shipping companiesoperating under Law 89/67 as long asthe property is exclusively for companyoffices or warehouses.Greek shipping companies cannotafford to renovate Mediterranean cargoships and tankers on their own, accordingto Mr. N. Varvates, president ofthe Association of Mediterranean CargoShip Owners. Varvates made thecomment at the association’s annualmeeting. Following the TransportCouncil in Brussels approval of legislationrequiring renovation of tankers,the association is lobbying to incorporatefinancial incentives for fleet renovationinto the new development law inorder to help shipping companies managethe cost. The association is alsocontinuing to lobby for a reduction ofcrew on Mediterranean ships.Aegean AgencyAegean provides general shipping and agencyservices to ships calling at any Greek port andthe port of Gibraltar. The Agency staff are specializedin a variety of areas and serve any sizeor type of ship, including VLCC, small tankers,bulk carriers, refer vessels, and ships carryingpetroleum, chemicals, ore, coal or any othercargo. Services include loading and discharging,bunkering, dry-docking, repairs, crew changes,water provisions, spare parts, supplies, shipdeliveries, and other maritime assistance, includingoff-shore services. Aegean strives to serve itsclients with a high degree of efficiency so thatexpenses are kept to a minimum. Agency staff,who also service the needs of Aegean's fleet of26 tankers, provide immediate and reliable service24-hours a day. Aegean, an associate memberof INTERTANKO, is the first agency in theworld to provide online service.24 AEGEAN NEWS SPRING 2003

MARITIME TRADITIONSOcean linersThe Rise and Fall of GiantsGreek Ocean liners first appeared at the beginning of the 20 th century and became well-knownin the years between World War I and World War II—the period of the mass emigration.The wave of emigration at the beginningof the 20 th century necessitatedocean liners to connectGreece with the Greek communitiesbeing created across the Atlantic.Before the appearance of Greek-ownedvessels, Greek emigrants used foreignshipping companies to travel to NorthAmerica. The ocean liners were irrevocablyconnected with this great but embitteringera, when passengers wereloaded on ships without basic comforts.MoraitisThis venture was undertaken by one ofthe leaders in Greek shipping, DimitriosG. Moraitis (1866–1942). In 1907, thefirst Greek ocean liner began sailingthe Piraeus–New York route. The venturewas extremely difficult to financegiven the state of the economy duringthat period. Moraitis, however, was partof a shipping family from Andros, andthrough his resourcefulness convincedmany financiers and distinguishedmembers of Athenian society to becomeshareholders in what was to become theHellenic Transoceanic Steam NavigationCompany. He ordered two oceanliners from England: the Moraitis,weighing 6,045 gross tons, and theAthinai, weighing 6,742 gross tons.Unfortunately, his attempt to createthe first Greek trans-Atlantic line wasunsuccessful. A year after he began, thecompany went bankrupt. The companywas followed by the Transoceanic GreekSteam Navigation company, backed byMoraitis’ original shareholders. However,this company failed as well.EmpirikosAnother businessman made Moraitis’vision come true. In 1912, the TransoceanicGreek Steam Navigation companywas bought out by the NationalSteam Navigation of Greece, a firm establishedby Leonidas A. Empirikos,whose ocean liner, the Patris, had beentransporting passengers between Piraeusand New York. Soon after, Empirikosadded to his fleet a very modernship, the Macedonia, that took just 12days for the trip—then a record time! TheMacedonia, however, met its end when itsank outside the island of Syros afterbeing bombarded by the Turkish cruiserChamidie during the Balkan wars.The events of the following years createdmany economic hardships forGreece, and many ship-owners plungedinto debt. One successful ocean liner operation,and one among very few in theGreek pre-war era, was the Goulandrisfamily's Greek Line. Its ship, the Nea Ellas,operated between Athens and NewYork until 1939.1945–1970After World War II, the need fortransoceanic liners became more compellingdue to the new wave of emigrationto North America. One of the shipsspecializing in the transoceanic routewas the Atlantic (later renamedVasilissa Frideriki) belonging to theship owner Evgenidis. Together with theOlympia, the Vasilissa Frideriki coveredthe Greek-North American route until1956 with modest success. However,the introduction of airplanes and thedevelopment of tourism in the mid-1960s heralded the beginning of theend for Greek ocean liners. Mostship-owners began gradually withdrawingtheir ships from theAthens–New York route to focus onthe new and promising cruise business.The demand for ocean linersswiftly decreased, as did emigration,which had been the drivingforce of profitability for theseships until the 1950s.Source: A. I. Tzamtzis, GreekOcean Liners (Militos publisher)

BRUSSELS NOTEBOOKPrimary Points of the EU Energy Strategy● The European Union will become increasinglydependent on external energy sources; enlargement willnot change the situation; based on current forecasts,dependence will reach 70% in 2030.● The European Union has very limited scope toinfluence energy supply conditions; it is essentially onPrimary Pointsof Discussion for EU Member StatesCan the European Union acceptan increase in its dependenceon external energysources without compromisingits security of supply and Europeancompetitiveness? For which sources ofenergy would it be appropriate, if thiswere the case, to foresee a frameworkpolicy for imports? In this context, is itappropriate to favor an economic approach:energy cost; or geopolitical approach:risk of disruption?2Does not Europe’s increasinglyintegrated internal market,where decisions taken in onecountry have an impact on theothers, call for a consistent and coordinatedpolicy at Community level? Whatshould such a policy consist of andwhere should competition rules fit in?3Are tax and State aid policiesin the energy sector an obstacleto competitiveness inthe European Union or not?Given the failure of attempts to harmonizeindirect taxation, should notthe whole issue of energy taxation bere-examined taking account of energyand environmental objectives?In the framework of an ongoingdialogue with producercountries, what should supplyand investment promotionagreements contain? Given the importanceof a partnership with Russia inparticular, how can stable quantities,prices and investments be guaranteed?5Should more reserves bestockpiled – as already donefor oil – and should other energysources be included,such as gas or coal? Should the Communitytake on a greater role in stockmanagement and, if so, what shouldthe objectives and modalities be? Doesthe risk of physical disruption to energysupplies justify more onerous measuresfor access to resources?6How can we ensure the developmentand better operationof energy transport networksin the European Unionand neighboring countries that enablethe internal market to function properlyand guarantee security of supply?the demand side that the EU can intervene, mainlyby promoting energy saving in buildings and thetransport sector.1 4 7● At present, the European Union is not in a position torespond to the challenge of climate change and to meetits commitments, notably under the Kyoto Protocol.The development of some renewableenergy sources callsfor major efforts in terms ofresearch and technologicaldevelopment, investment aid and operationalaid. Should co-financing ofthis aid include a contribution fromsectors which received substantial initialdevelopment aid and which arenow highly profitable (gas, oil, nuclearenergy)?8Seeing that nuclear energy isone of the elements in the debateon tackling climatechange and energy autonomy,how can the Community find a solutionto the problem of nuclear waste,reinforcing nuclear safety and developingresearch into reactors of the future,in particular fusion technology?9Which policies should permitthe European Union to fulfillits obligations within the KyotoProtocol? What measurescould be taken in order to exploit fullypotential energy savings which wouldhelp to reduce both our external dependenceand CO 2 emissions?26 AEGEAN NEWS SPRING 2003

10Can an ambitious programto promote biofuelsand other substitutefuels, including hydrogen,geared to 20% of total fuel consumptionby 2020, continue to be implementedvia national initiatives, orare coordinated decisions required ontaxation, distribution and prospectsfor agricultural production?11Should energy saving inbuildings (40% of energyconsumption),whether public or private,new or under renovation, be promotedthrough incentives such as taxbreaks, or are regulatory measures requiredalong the lines of those adoptedfor major industrial installations?12Energy saving in thetransport sector (32%of energy consumption)depends on redressingthe growing imbalance between roadhaulage and rail, Is this imbalance inevitable,or could corrective action betaken, however unpopular, note ably toencourage lower use of cars in urbanareas? How can the aims of opening upthe sector to competition, investment ininfrastructure to remove bottlenecksand intermodality be reconciled?EU DEPENDENCE ACCORDING TO ENERGY PRODUCT100%90%80%70%60%50%40%30%20%10%0%Solid fuels Oil Natural gas Total1990 2000 2010 2020 2030Adopting a policy of geopolitical diversification has not been ableto free the Union from effective dependence on the Middle East (for oil)and Russia (for natural gas). Indeed, a number of Member States,and in particular the applicant countries, are entirely dependenton a single gas pipeline that links them to a single supplier country.ENERGY PRODUCTION BY FUEL (in million toe)125013How can we developmore collaborative visionsand integrate thelong-term dimensioninto deliberations and actions undertakenby public authorities and otherinvolved parties in order to evolve asustainable system of energy supply?How are we to prepare the energy optionsfor the futures?1000750500250RenewablesNuclearNatural gasOilSolid fuels01990 2000 2010 2020 2030SPRING 2003 AEGEAN NEWS 27

ATHENS 2004Athens 2004The Spirit of VolunteerismOne of the central pillars of the Olympic Games movement is the cadre of volunteers thathelp produce the largest and most complex athletic event in the world.Volunteers play a vital role duringthe test events, during preparationsfor the Olympic Gamesand the Paralympic Games, and duringthe actual Olympic Games and the ParalympicGames. As the Olympic Gamesreturn home to Athens for the first timesince the birth of the modern Olympicmovement in 1896, Greece and the organizersof the Olympic Games are facingchallenges that are testing skills andcapabilities on many fronts. In additionto sparking a transformation in areassuch as construction and infrastructure,the Games call upon the organizingcommittee (ATHOC) to develop skillsand attitudes that are new to many citizensand residents. One area the organizershave made special attempts inwhich to ensure participation is the volunteerprogram.According to ATHOC sources, theprogram was launched in January of2001. Cooperation with a variety of institutions,sporting organizations, anduniversities has resulted in many Greeksbecoming aware of the program, and theopportunities it offers, they knew littleabout before Athens was chosen to bethe host city. About 45,000 volunteerswill be needed for the Olympic Gamesand about 15,000 for the ParalympicGames. Volunteers usually spend betweenseven and ten days at their "jobs"and are able to experience the OlympicGames from a unique vantage point.“The greatest celebration of humanity is only possiblethrough the will, the passion, the dedication, and theprofessionalism of each volunteer.”Participants must be at least 18 years oldand may be asked to become involved inone of many areas of the Games, such asmedical and health services, technology,the environment, ceremonies, spectatorservices, administration, hospitality andtourism, Olympic and Paralympic familytransportation, and sports.Interested candidates must submit anapplication either on the Internet at theofficial website (www.athens2004.com)or by mail (requests may be made bycalling 800 11 2004 or, from outsideGreece, +30 210 200400), have an interviewand, if accepted, undergo training.No restrictions exist based on sex,race, creed, physical ability, socialstanding, or education.Because the scope of the Games isso immense, volunteers are vital andcan make a tremendous difference inthe quality of the event. At Barcelona,34,500 volunteers participated, at Atlanta60,000 and 47,000 at Sydney.Organizers in Athens have conducted acampaign to attract citizens and residentsnot only of Greece but to tap thethousands of potential volunteers to befound among the Greek Diaspora. Peopleof Greek descent from throughoutthe world_North and South America,Africa, Europe, the Middle and FarEast, and Australia_have shown astrong interest to participate in an eventthat promises to transform Greece'simage throughout the globe. Participantsoften express a strong sense ofsatisfaction from contributing in thisspecial way, and volunteers at theAthens 2004 Games will undoubtedlyfeel a special exhilaration as the Games"return home." According to ATHOC,"The greatest celebration of humanityis only possible through the will, thepassion, the dedication, and the professionalismof each volunteer."2004 Athens Olympic GamesAugust 13-29, 2004www.athens2004.comAthens Paralympic GamesSeptember 17-28, 200428 AEGEAN NEWS ∞¡√π•∏ 2003

FORUMBilateral Trade RelationsHow important is the energy sector in Greece and SoutheastEurope for U.S. businesspeople and investors?It seems that in the 21st century energy matters will be ofutmost importance in the Southeast European region. Theenlargement of EU and its great demands for energy willgrow considerably in the near future. This will mean thatSoutheast Europe will play a major role as the area throughwhich energy networks will pass. It is well known that in theenergy sector U.S. interests are enormous and the companiesthat represent them will continue playing a dominant role inthe future. Greece has an historic opportunity to becomepart of the energy network system of the EU,especially as it is a country with stable economicand political climate.What do foreign companies expect and demandbefore investing in Greece?What foreign businesspeople seek are a morecompetitive system, the elimination of bureaucracy,and most important, clear rules foreveryone that will stand for a long period oftime. It is true that infrastructure in Greeceis much better than it was three years ago,and that there have been some incentives forgrowth, especially in the industrial sectors.But Greece, at least for foreign companies, isstill a developing economy, although one thathas the advantage of being in the Eurozoneand therefore offers monetary stability.What events does the Chamber organize tostimulate U.S.-Greek trade and commercial relations?The Chamber has been organizing some ofthe most influential conferences in Greecefor years. For instance, pivotal private andpublic sector representatives analyze topicsof major economic importance at the "Hourof the Greek Economy," held every December.In 2003 energy will be yet again a majorAn interview with Alexandros Lamnidis,Executive Director of the American-HellenicChamber Of Commerce.topic for debate, at which experts from the United States willparticipate. In other fields the Chamber organizes conferenceson health matters, and oversees the U.S. Pavilions atthe Thessaloniki Trade Fair, at the Defendory InternationalExhibition, and the Posidonia Exhibition. Finally, every yearthe Chamber organizes the Comdex Greece high technologyexhibition and several ad hoc events.American-HellenicChamber of CommerceThe American-Hellenic Chamber ofCommerce is one of the largestand most active American chambersin Europe. It sponsors someof the leading conferences, exhibitions,fora and investment eventsin Greece. The Chamber organizesand sponsors the Hour of theGreek Economy conference thatannually examines the course ofthe Greek economy, and COMDEXGreece, Southeast Europe's leadingIT event.Virtually all American companiesthat do business in Greece aremembers of the Chamber as aremost Greek companies thatengage in trade with the UnitedStates. The American-HellenicChamber of Commerce is a notfor-profitorganization that is amember of the U.S. Chamber ofCommerce in Washington D.C., andthe European Council of AmericanChambers of Commerce.Some Greek companies are making a presence in the U,S. market.How do you evaluate this progress?The presence of Greek companies in the USA is by nature amajor achievement that has not been coveredadequately by our media. Severalcompanies have interests there in differentfields of activity. Lavipharm has an R&Dfacility in New Jersey and recently acquireda new company in the U.S. TitanCement owns production plants in the U.S.and it is also doing excellently. TechnicalOlympic Group develops residential sitesand currently has construction interests in8 U.S. states. Many other companies havea strong presence as well. Also, let us notforget that National Bank of Greece andOTE are both quoted on the New YorkStock Exchange, providing these companiesa major advantage in United States.Do you view the Olympic Games of 2004 asa major factor for economic activity?Certainly. But for us the most importanttheme is not whether we will organize theGames successfully but what will happenthe day after the Games. What is of concernis what will happen after the Gamesand after 2006, when the funding fromthe European Union will end. We want tofocus on the example of Barcelona, a citythat transformed itself after the OlympicGames were held there.SPRING 2003 AEGEAN NEWS 29

Very few people know the other Tinos—the hidden island with arid mountain slopes, villagesbuilt between huge monoliths, and remote beaches.The island of Tinos is well knownfor its church devoted to the VirginMary, which was built in1823 at the spot where an icon of theVirgin was found. It is also known as theisland where Ghyzis, Chalepas, Lytrasand other famous sculptors and artistswere born. Tourists discovered the islandduring the 1980s and they marveled atits clean beaches, beautiful villages, specialtycheeses, hand-made baskets,marble sculpture, and dovecotes—thetwo-story "houses" for pigeons, elaboratelydecorated with slate designs.Very few people, though, know theother Tinos—the hidden island witharid mountain slopes, villages builtbetween huge monoliths, and remotebeaches. The hidden island of Tinoshas little to do with the island we seeon television on the 15 th of August,when the island holds its famous celebrationof the Virgin Mary.Visitors who want to discover the"other" Tinos can skip the most touristyand commercial parts of the island andinstead make a short journey to themonastery where, according to myth,Saint Pelagia had a vision which led tothe discovery of the famous icon. Alongthe way, views of mountains stretchingacross the island, farms, and beacheswith small coves reward the more adventuroustraveler. Continuing north, onecomes to Steni, Kehro, Falatado and finallyto Volaka, the village of basketweavers. Kolymbethra, a beautiful beachcreated by large smooth gray rocks, isfurther north. Visitors will want to stopat one of these villages to taste the traditionalcuisine of the island. Locals arerightly famed for their fried sun-driedtomatoes, artichokes, sausage with garlic,sun-dried pork, rabbit stew, and cheeses.The next stop, after Volakas, is Pyrgos,home to the School of Fine Artswhere the artistic tradition of the islandis kept alive. Roughly two kilometerswest of Pyrgos are the last two villagesat this end of the island, Panormos—with its own beach—and Marlas.For visitors who make the effort togo beyond the Hora, or main village,Tinos offers satisfying rewards. Customsabandoned in other parts of Greece arekept alive by a local population thatunderstands the value of history, thebeauty of handcrafted items, and theimportance of tradition.The infrastructure of the island israpidly developing, providing a varietyof accommodations. Rooms can befound in Hora and in most villages.For more InformationPiraeus Port Authority: 210-451 1311Rafina Port Authority: 22940-22300Tinos Tourist Police: 22830-2367030 AEGEAN NEWS SPRING 2003

A look that saysTHE AEGEAN IMAGE“We ‘re different”Aegean is proud of the contemporary image of its petrolstations. Station personnel enhance the "Aegean Look"through clothing and products that reflect a commitmentto quality and customer service.SPRING 2003 AEGEAN NEWS 31

AegeanAEGEAN is a diverse group of companies active in the energy and shippingindustries and is committed to providing its clients with the bestproducts, services, and solutions to meet their needs. The AEGEANgroup markets fuels and lubricants in the bunkering and retail sectors,is a leader in top-quality bunkering services, providesmarine transport through its fleet of 26 tankers, and offers24/7 shipping services to trusted clients throughoutthe world.SERVICE AND PRICEFounded in 1990 by Dimitris Melissanidis, thecompany's Chairman, AEGEAN is committed toproviding its customers with unmatched servicesat the most competitive prices. It has grownin just over a decade into a dynamic force in theindustry and from its headquarters in Piraeus,Greece AEGEAN directs its domestic and internationaloperations. The company is privately held and100% Greek owned.A DYNAMIC GROWTH STRATEGYThrough a strategy of responding to market needs,AEGEAN has successfully grown to be an industryleader that is committed to excellence in customersatisfaction, environmental awareness, and overallquality. The company is ISO 9002 accredited,its ships meet ISM standards, and AEGEAN'sbunkering operations are on the FOBAS WhiteList. AEGEAN employs more than 1,000 professionalswho are the foundation of the company'ssuccess. In 2002, turnover reached $1.5 billion. Inaddition to its headquarters in Piraeus, the company hasoffices in Thessaloniki, Greece and an international presencein the United Arab Emirates, Venezuela, Russia, Bulgaria,Gibraltar, and the United States.FULLY-EQIUPPED FACILITIESAEGEAN has two fully equipped depots to handle its fuel needs. Thedepot in Alexandroupolis serves clients and customers in northernGreece and southeast Europe. The company's depot in Aspropyrgosserves southern Greece and the important port of Piraeus.www.aegeanoil.gr