The Group (registered headquarters at 8A Chimarras Street, GR 151 25-Maroussi) is comprised of 48 companies, including the parent company, which is listed on the Athens and London Stock Exchanges. The list of subsidiaries, the nature of their business, the percentages of ownership and consolidation method for each one of them, can be seen at http://www.helpe.gr/userfiles/8ea1f0cb-9e62-48e4-b947-a27b00fb14bb/BoD%20Report-2015-ENG-NEW_1.pdf, p. 165-168.

The present legal form of the Group is the result of the initial merger that took place in 1998, when the parent company was first listed, as well as subsequent corporate transactions (acquisitions).

Refining is the main activity, accounting for approximately 75% of the Group's total assets. The Group has a leading position in the domestic market through its subsidiaries EKO and HELLENIC FUELS (ex BP Hellas).  Both companies are active in the domestic retail market and the sales of LPG, industrial, aviation & marine fuels and lubricants.

HELLENIC PETROLEM, founded in 1998, is one of the most important Groups in the energy sector in South-Eastern Europe and operates in 6 countries.

The Group operates in South-Eastern Europe, occupying an important position in the Cyprus, Bulgaria, Serbia, Montenegro and FYROM fuel markets, with a total network of 295 service stations as well as OKTA’s facilities (Skopje).

Shareholding Structure

HELLENIC PETROLEUM’s shares are traded both in the General Category (Main Market) on the Athens Stock Exchange (ATHEX: ΕLPΕ) and London Stock Exchange (LSE: HLPD), as Global Depositary Receipts (GDRs).

HELLENIC PETROLEUM’s shares participate, with a significant weighting, on the ASE General Index and the FTSE/ΧΑ Large Cap Index, as well as a number of other indices such as the FTSE/XA Oil-Gas Index, the FTSE/Med 100, the Greece - Turkey 30 Index and the Global X FTSE Greece 20 ETF Index. Its shares also participate on the Dow Jones Stoxx Index.

During 2015, HELLENIC PETROLEUM’s shares, contrary to the overall downward trend witnessed on the Athens Stock Exchange, recorded gains of 6% versus last year, closing at €4.04 on 31.12.2015 despite the increased country risk due to political uncertainty.

Shareholding structure (>5%)

Group’s Main Activities

Refining, Supply & Trading

In Greece, the Group owns and operates three refineries in Aspropyrgos, Elefsina and Thessaloniki, which account for approximately 65% of the country’s total refining capacity and together combine 6.65 million m³ in storage capacity for crude oil and petroleum products.

In 2015, the Refining segment reported its highest ever production since 2007, as well as record sales from over the last 6 years on the back of increased exports. This was mainly attributed to the improved operation of both the Elefsina and Aspropyrgos refineries, despite their shut down for maintenance works. The Thessaloniki refinery also recorded a strong performance on high operational availability, while the implemented synergies amongst the three refineries had a significant positive impact on profitability as well.

In 2015, the crude oil market was oversupplied with all types of crude oil. In the Mediterranean region, crude oil exports from Iraq continued to increase with a positive impact on the Group’s refineries. HELLENIC PETROLEUM adjusted its crude slate accordingly, by decreasing the share of crude oil from Russia and increasing that from Iraq, as well as from other sources, subject to available opportunities in the global market.

The Group’s ability, due to its refineries’ increased complexity, to process intermediate products (SRAR,VGO) and adjust its crude slate and oil processing levels is a key competitive advantage.

The Elefsina refinery’s middle distillates’ yield (diesel, jet) reached 69%, resulting in a corresponding figure of approximately 53% for the Group.

HELLENIC PETROLEUM exports continued to increase for the 6th consecutive year, amounting to 6,942kt, accounting for 50% of total sales, thereby strengthening the Group’s export orientation in the East Med.

The Aspropyrgos and Elefsina refineries significantly improved their yields of white products, such as gasoline and diesel, especially post the completion of the maintenance works at the end of the first half of 2015.

All of the above contributed significantly to Group's refineries’ performance, with the yield of white products ranking at the highest levels amongst European refiners, highlighting the competitiveness of the Group’s asset base, post the completion of the investment plan during the 2007-2012 period, which amounted to €2.1 bn.

Production and Trading of Petrochemicals/Chemicals

Petrochemical/chemical activities primarily focus on the further processing of refinery products such as propylene, polypropylene and solvents, as well as the marketing of polymers, BOPP film and inorganics in both the domestic market and internationally.

In 2015, demand and profit margins for our petrochemical products outside Greece improved, while the domestic market remained weak due to the prevailing economic conditions. The extended shut- down of the Aspropyrgos refinery between April and June reduced the available quantities of propylene, resulting in total polypropylene products sales decreasing by 6% in 2015 compared to the previous year.

In 2015, the ΒΟΡΡ unit’s productivity further increased, contributing to higher integration in the chemicals production chain. More than 20% of the ΒΟΡΡ film’s annual production relates to new and differentiated products which are expected to increase further as a percentage of total production.

The Group’s petrochemical/chemical activities also include the marketing of solvents and sulfur produced by the oil refining process, as well as the importing and marketing of PVC. All of these activities showed a significant increase in profitability in 2015 compared to the previous year.

Exploration and Production

In 2015, the Group's exploration and production activities focused on Greece, through HELLENIC PETROLEUM’s participation (as an Operator) in an international joint venture of oil companies for the Lease of the Patraikos Gulf offshore region, amounting to ​​1,892 sq.km, with the Greek government. Following approval from the Contractor and the remaining parties, in May 2015, HELPE transferred the exploration and production rights to a 100% subsidiary company. In the fourth quarter of 2015, the process of transferring the participation share of Petroceltic Resources Plc (33.3%) began, resulting in the final participation shares in the consortium being split evenly between HELPE Patraikos (50%) and EDISON International (50%). The respective consent from the Minister for the Environment and Energy for the transfer of the rights was granted on 20 January 2016.

In regards to the Patraikos Gulf, the minimum work programme for the first three years of exploration includes the recording of 3D seismic studies of a total area of 800 sq. km along with 2D regional lines amounting to 300 km. 2015 saw the continuation of the first geological, geophysical and environmental studies in the area as well as the end of the reprocessing of 2,000 sq. km of seismic data. In the last quarter of 2015, the tender for the selection of the preferred bidder for the 3D recordings of an 800 sq. km area and 2D recordings of 300km in length was also completed. The seismic data recordings program started in January 2016 and was completed within the first days of February 2016.

Meanwhile, the Company continued to study the exploration works of both offshore and regions in Western Greece, in preparation for its possible tender submission related to the international onshore tender processes already announced by YPEKA. On 6 February 2015, following a relevant tender, HELLENIC PETROLEUM submitted offers for the lease of the Arta-Preveza and NW Peloponnese areas in Western Greece. In February 2016, the company was selected by the Ministry of Environment & Energy as the preferred bidder for the concession rights for the exploration and exploitation of hydrocarbons of the onshore block areas of Arta-Preveza and NW Peloponnese and was invited by the competent Evaluation committee for the finalization of the draft Lease Agreement.

On 14 July 2015, Hellenic Petroleum submitted offers for three areas in the context of the 2nd International Tender regarding concession rights for the exploration and exploitation of hydrocarbons of 20 offshore blocks in Western Greece and Southern Crete, tendered by the Ministry of the Environment & Energy (for which it is awaiting the results). 

ΗELLENIC PETROLEUM is constantly monitoring developments in the field of exploration and production in Greece. In this context, the company continued to study the exploration data for the offshore blocks in Western Greece and Northern Aegean sea, as well as of the Thracian Sea Concession (1,600 sq.km) where it participates with 25% in a Joint Venture with Calfrac Well Services Ltd.

FUELS MARKETING

HELLENIC PETROLEUM Group is active in the marketing and distribution of petroleum products, both in Greece through its subsidiaries ΕΚΟ and HELLENIC FUELS, as well as internationally through its subsidiaries in Cyprus, Bulgaria, Serbia, Montenegro and FYROM.

Domestic Marketing

In Greece, the Group possesses an extensive network of more than 1,700 petrol stations (comprised of 909 EKO petrol stations whilst HELLENIC FUELS operates a further 800 stations under the BP brand name) out of the country’s total of 6,000 petrol stations. Combined, the two companies possess 15 bulk storage and supply terminals, 23 aircraft refuelling stations located at the country’s main airports, 2 LPG bottling plants and one lubricant production and packaging unit.

The market share of the two subsidiaries improved significantly in 2015 for most products. In transport fuels, total market share, including C&I clients, has exceeded 30%.
The Group’s strong capital adequacy and successful management of the crisis in 2015, whereby it was able to ensure for the uninterrupted supply of the market and manage credit risks, further strengthened f the position of the Group’s marketing companies in the Greek market.

The Group’s main strategic objectives in this particularly challenging business environment were extroversion, innovation and operational optimisation, the objective of which was to increase the value offered in all fuels marketing activities. How successful the implementation of this strategy has proved to be is reflected in the fact that the Group has maintained its leading position in the market and has increased its share in all key products, while increasing profitability by supplying competitive and quality fuels and lubricants. In this regard, the contribution of increased sales of EKO Diesel Avio and BP Ultimate Diesel, both innovative differentiated products, was indeed substantial.

In 2015, the Group continued to invest in developing its COMO network which expanded from 139 to 165 petrol stations. Substantial Synergies between EKO and Hellenic Fuels continued to be implemented with an emphasis on network management, aiming at keeping cost more competitive and enhanced and efficient customer service management.

International Marketing

All of the countries in which the Group operates were able to increase their profitability during 2015, with most of them also recording an increase in their total sales. The Group's international marketing subsidiaries reported record high profitability on increased sales volumes and strong operational performance while vertical integration with the Group’s refineries also increased. In addition, the launch of differentiated products such as the "EKONOMY" product series in all countries was completed; "Diesel Avio" was introduced in Bulgaria and re-launched in Serbia while the successful implementation of the "EKO Warranty Program" continued in Cyprus and Bulgaria.

In Cyprus, our companies, Hellenic Petroleum Cyprus and Ramoil managed to increase their volumes and profitability. The opening of 4 new petrol stations and the “Marketing Loyalty” initiative launched across the retail network, from April to July, both led to market share gains in the main motor fuels market. The C&I sector also contributed to overall profitability improvement as it increased sales volumes. For 2016, further efficiency improvement as well as limiting credit risk exposure will remain key priorities.

EKO Bulgaria managed to significantly increase its profitability as well as volumes, through successful marketing activities such as the "EKO Guarantee Program" and the launch of the new differentiated product named “Diesel Avio". EKO Bulgaria’s main objective for 2016 is to further increase its market share through a targeted network expansion.

EKO Serbia improved its profitability despite increased competition and a slight drop in volumes in comparison with 2014. Further improvement is expected in the coming years through a targeted expansion of the network.

In Montenegro, Jugopetrol managed to increase its profitability compared with 2014, despite the difficulties in the local economy and increased competition, as a result of increased volumes and lower operating costs due to the successful organisational restructuring which began in 2014 (including moving the company headquarters from Kotor to Podgorica) and continued in 2015. Despite the fact that the challenges in the Montenegrin fuels market are expected to continue in 2016, the company’s aim is to maintain its leading position in the market.  

Other Activities/Participations

Renewable Energy Sources (R.E.S.)

HELPE Renewables’ objective us to develop a significant renewable energy portfolio (wind, solar, biomass etc.), over the next few years, in order to both diversify the Group’s energy portfolio and partially offset its greenhouse emissions: The reduction of its carbon footprint will amount to at least 250,000 tons per year, which will partially offset a significant proportion of CO2 emissions that correspond to refining and gas fired power generation.

HELPE Renewables already operates PV parks on Group-owned property with a total capacity of 1.4 MW as well as a 7 MW wind park in Pylos, Messinia. Further projects, in various stages of development, include: 4 additional PV projects with a nominal capacity of 11.6 MW, as well as 5 heat and power generation units using biomass (agricultural waste) with a total capacity of 25 MW. The Electricity Transmission System Operator has also already approved 7 own-production consumption applications (net-metering program) of 20 kW each for 7 EKO and BP petrol stations - to be built in 2016. Similar investments, in regard to own-production for own-consumption purposes on the Group’s premises connected to the MV distribution network are also being considered.

In addition, HELPE Renewables, in collaboration with LARCO, is developing a PV portfolio of 143 MW as well as wind and hybrid projects.

Power Generation

The Group’s power activities focus mainly on electricity generation through ELPEDISON POWER and trading both cross-border, as well as in the Greek market through ELPEDISON ENERGY. Both companies are controlled by ELPEDISON BV (50% HELLENIC PETROLEUM S.A., 50% EDISON), which holds 75.78% in each of the abovementioned companies’ share capital.

ELPEDISON Power is the second largest independent power producer in Greece, with a total installed capacity of 810 MW, comprising a 390 MW gas-fired plant in Thessaloniki (since 2005) and a 420 MW gas-fired plant in Thisvi (since 2010).

On the supply side, ELPEDISON – which recorded exceptionally rapid growth in 2015 - is one of the largest independent alternative electricity suppliers with sales of 550 GWh (2015) to medium and low voltage customers.

The company’s production of electric power increased compared to 2014, mainly due to the fall in the cost of the natural gas during the second half of 2015.

Natural Gas

The Group is active in the natural gas sector through its 35% participation in DEPA S.A., while the remaining 65% is owned by the Greek State. DEPA Group is active in the supply of natural gas in Greece through import pipelines and the Revithoussa LNG terminal, as well as in the trading of natural gas to selected end-users (annual consumption >100 GWh).
DEPA’s results decreased mainly on the back of provisions in the last quarter of 2015 (conflict with BOTAS and provisions). Natural gas sales remained at the same levels as last year.

Engineering

ASPROFOS is a Group subsidiary and constitutes the largest Greek engineering and consulting services provider in South-Eastern Europe. It directly supports the Group’s investments, particularly in the fields of refining and natural gas, through the provision of a broad range of technical, project management and other related advisory services, whilst continuously differentiating the range of its services and broadening its client portfolio, outside both the Group and Greece.