CORRAL PETROLEUM HOLDINGS AB (PUBL) - Preem

“.nu,” “.org,” “.biz,” “.info” and “.net.”EmployeesWe employed an average of approximately 1,300 persons in 2010, 1,400 persons in 2009 and 1,400 persons in2008. Substantially all of our employees are represented by trade unions under collective bargaining agreements. Webelieve that our relations with our employees are good. We have not been involved in any material labor disputes orexperienced any disruptions in production as a result of union activities of our employees in the last five years.Organizational structurePreem is our wholly owned subsidiary, and we are wholly owned by Moroncha Holdings, which, in turn, iswholly owned by Mr. Mohammed Hussein Al-Amoudi. Mr. Al-Amoudi acquired all of the outstanding shares of Preem,then called OK Petroleum, in 1994 and its name was changed to Preem Petroleum in 1996 and then to Preem in 2008.On October 30, 2008, Former Corral Petroleum Holdings, which was our wholly owned subsidiary, merged intoPreem, its wholly owned subsidiary. As consideration for the merger and all shares in Former Corral PetroleumHoldings, all shares in Preem were transferred to us. Former Corral Petroleum Holdings was dissolved and Preemassumed all its assets and liabilities. These transactions were completed on October 30, 2008, after which Former CorralPetroleum Holdings ceased to exist and Preem became our wholly owned subsidiary.Legal ProceedingsWe have been and are involved in various legal proceedings incidental to the conduct of our business; however,we are not involved in any governmental, legal or arbitration proceedings that have had or are expected to havesignificant effects on our financial position or profitability.InsuranceOur operations are subject to all of the risks normally associated with oil refining and transportation that couldresult in damage to or loss of property, suspension of operations or injury or death to personnel or third parties. Weinsure our assets at levels that management believes reflect their current market value. Such assets include all capitalitems, such as chartered vessels, major equipment and land-based property. We own Preem Insurance Company Limited,a wholly owned Irish insurance company, through which we insure our property and crude oil products. Preem InsuranceCompany Limited then reinsures on the international reinsurance market.We also carry public and products liability insurance for legal liability for personal and property damage to thirdparties. Our refineries and businesses also are covered by business interruption insurance for interruptions beyond40 days, on average. We also carry insurance against loss of cargo, the destruction of, or damage to, chartered vesselsand equipment in amounts, generally equal to replacement value. From time to time, however, we may not be able toobtain insurance against all risks or for equipment located in some geographic areas. This insurance is subject todeductibles and does not include liabilities or costs and expenses related to cargo carried on ship. Our property andliability insurance does not cover gradual environmental and other damage that was not the result of a sudden, unintendedand unexpected insurable accident.Our operations are conducted in hazardous environments where accidents involving catastrophic damage or lossof life could result. Litigation arising from such an event may result in our being named a defendant in lawsuits assertingmaterial claims. We insure ourselves for liability arising from our operations, including loss of or damage to third-partyproperty, death or injury to third parties, statutory workers, compensation protection, and pollution caused by a suddenand accidental occurrence. Although there can be no assurance that the amount of insurance carried by us is sufficient toprotect us fully in all events, all such insurance is carried at levels of coverage and deductibles that we considerfinancially prudent. A successful liability claim for which we are underinsured or uninsured could have a materialadverse effect on us.Property, plant and equipmentWe own the Preemraff Gothenburg refinery and the 370 acres on which the refinery is located, and we haveeasements that ensure the refinery’s access to the harbors of Torshamnen and Skarvik by way of pipelines. We also ownthe Preemraff Lysekil refinery and the 465 acres on which the refinery is located as well as the harbor at Lysekil. Ourmain storage facilities, which consist of a total of approximately 37 acres, are also located in Sweden. All otherproperties that we use are leased in accordance with normal market conditions.45