CORRAL PETROLEUM HOLDINGS AB (PUBL) - Preem

apeseed methyl ester, we have increased the availability of biogas, including bio-fuel E85 (which contains 85%renewable ethanol and 15% gasoline) and we offer electric car owners in certain locations a free two hour charge. Inaddition, following the conversion of sections of the Preemraff Gothenburg into a biorefinery, we have begun producingand marketing tall oil diesel which is the first forest-based green diesel with 16% green content.We also strive to improve the sustainability of our business by employing strategies to reduce our emissionlevels and optimize our energy consumption at each of our refineries. Some of the effective techniques that we employto reduce our emissions include low nitrogen oxide burners, catalytic flue-gas cleaning, in-house produced fuel gas andenergy recovery from heat exchangers. Indeed, according to the 2008 Solomon Study, our refineries emit on average20% less carbon dioxide, 70% less nitrogen oxide and 90% less sulphur oxide than the average refinery located inWestern Europe. We are also exploring alternative energy sources, including through our partnership in VindIn AB withother energy-intensive companies in Sweden that aims to identify, develop, build and run wind power stations inScandinavia in order to deliver electricity to those involved in the partnership.CompetitionOur supply and refining segment competes primarily with AB Svenska Shell, which owns and operates the onlyother competing oil refinery in Sweden and, to a lesser degree, with Neste Oil Corporation and AB Svenska Statoil.Outside Sweden, we compete with the refineries in northwestern Europe that can serve our target markets, primarilyScandinavia, the United Kingdom and Germany. The principal competitive factors affecting our refining operations arethe price and availability of crude oil and other feedstock, refinery efficiency, the refined product mix and productdistribution and transportation costs. Our marketing segment competes primarily with AB Svenska Statoil, OK-Q8 AB,AB Svenska Shell and ST1 AB. The principal competitive factors affecting our marketing segment are market volume,station throughput, product price, locations of service stations and brand identification.In Sweden, we had the leading market share in 2008 in terms of sales volume of diesel, heating oil and fuel oilwith approximately 30% of diesel sales, 39% of heating oil sales and 52% of fuel oil sales, according to the SwedishStatistical Central Bureau. In 2009, we also had the leading marketing share in Sweden in terms of volume of diesel,heating oil and fuel oil with approximately 33% of diesel sales, 50% of heating oil sales and 48% of fuel oil sales,according to the Swedish Statistical Bureau. In 2010, we also had the leading marketing share in Sweden in terms ofvolume of diesel, heating oil and fuel oil with approximately 35% of diesel sales, 49% of heating oil sales and 52% offuel oil sales, according to the Swedish Statistical Bureau. In addition, our marketing segment’s share of the Swedishretail gasoline market in terms of sales volume was approximately 12% in 2010, based on data from the SwedishStatistical Central Bureau. This ranked fourth, behind OK-Q8 AB, with approximately 29% market share, AB SvenskaStatoil, with approximately 25% market share, and Conoco Jet Nordic AB, with approximately 13% market share, basedon data from the Swedish Statistical Central Bureau.Regulatory and Environmental MattersWe are subject to both Swedish and EU regulation on the production, storage, transportation and sale ofpetroleum products. Sweden was one of the first European countries to introduce strict environmental legislation, whichrequired the Swedish petroleum industry to upgrade existing infrastructure earlier than other European refiners. Swedenhas among the strictest environmental specifications in the EU. Current EU regulations allow a maximum sulphurcontent of 10 parts per million for gasoline and diesel, effective January 1, 2009, and an aromatic content in gasoline of35%, effective January 1, 2005.In 2006, we commissioned the hydrocracker unit at Preemraff Lysekil, which has enhanced Preemraff Lysekil’sstrong market position and enabled Preemraff Lysekil to produce more virtually sulphur-free (10 parts per million) diesel,a product for which there is increasing demand in Europe.After the hydrocracker unit became operational, we decreased our production of heating oil, a lower marginproduct, and increased our production of diesel, a higher-margin product. This has substantially improved our overallrefining margins. Although we have made the necessary investments to meet current EU specifications, our intention isto make additional investments to further upgrade our refineries. We have also modified the mild hydrocracker unit atthe Gothenburg refinery in order to allow processing of bio-based feedstock for production of green diesel.Intellectual PropertyPreem holds the word and combined word and device trade mark registrations for Preem and the Preem bearlogo in the EU and Norway. Preem also holds other Swedish trade mark registrations including “Renofin,” “Minima.,”“Micro,” “OK Micro,” “OK Micropris,” “Optima,” “ProMil,” “SP Svenska Petroleum,” “Björnkoll,” “Preem ActiveCleaning Power Diesel,” “Preem ACP Diesel,” “EO2 DUO LS” and a three dimensional trademark portraying a Preemfilling station.Preem, directly or indirectly through its subsidiaries, also holds the following domain names: “preem,”“preempetroleum,” “bjornkoll,” “renofin,” “preemgas,” “preemraff,” “bjornen,” “wwwpreem,” “preemfinans” and“svenskaoljegrossister.” The above-mentioned domain names are all held the in the top domains “.se,” “.com,” “.eu,”44