Corral Petroleum Holdings AB (publ) Business Update ... - Preem

Holdings, which, in turn, is wholly owned by Mr. Mohammed Hussein Al-Amoudi. Mr. Al-Amoudi acquired all of theoutstanding shares of Preem, then called OK Petroleum, in 1994 and its name was changed to Preem Petroleum in 1996 andthen to Preem in 2008.On October 30, 2008, Former Corral Petroleum Holdings, which was a wholly owned subsidiary of CorralPetroleum Holdings, merged into Preem, its wholly owned subsidiary. As consideration for the merger and all shares inFormer Corral Petroleum Holdings, all shares in Preem were transferred to Corral Petroleum Holdings. Former CorralPetroleum Holdings was dissolved and Preem assumed all its assets and liabilities. These transactions were completed onOctober 30, 2008, after which Former Corral Petroleum Holdings ceased to exist and Preem became a wholly ownedsubsidiary of Corral Petroleum Holdings.Legal ProceedingsWe have been and are involved in various legal proceedings incidental to the conduct of our business; however, weare not involved in any governmental, legal or arbitration proceedings that have had or are expected to have significanteffects on our financial position or profitability.InsuranceOur operations are subject to all of the risks normally associated with oil refining and transportation that could resultin damage to or loss of property, suspension of operations or injury or death to personnel or third parties. We insure ourassets at levels that management believes reflect their current market value. Such assets include all capital items, such aschartered vessels, major equipment and land-based property. We own Preem Insurance Company Limited, a wholly ownedIrish insurance company, through which we insure our property and crude oil products. Preem Insurance Company Limitedthen 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 beyond 40 days,on average. We also carry insurance against loss of cargo, the destruction of, or damage to, chartered vessels and equipmentin amounts, generally equal to replacement value. From time to time, however, we may not be able to obtain insuranceagainst all risks or for equipment located in some geographic areas. This insurance is subject to deductibles and does notinclude liabilities or costs and expenses related to cargo carried on ship. Our property and liability insurance does not covergradual environmental and other damage that was not the result of a sudden, unintended and unexpected insurable accident.Our operations are conducted in hazardous environments where accidents involving catastrophic damage or loss oflife 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 sudden andaccidental occurrence. Although there can be no assurance that the amount of insurance carried by us is sufficient to protectus fully in all events, all such insurance is carried at levels of coverage and deductibles that we consider financially prudent.A successful liability claim for which we are underinsured or uninsured could have a material adverse 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 own thePreemraff Lysekil refinery and the 465 acres on which the refinery is located as well as the harbor at Lysekil. Our mainstorage facilities, which consist of a total of approximately 37 acres, are also located in Sweden. All other properties that weuse are leased in accordance with normal market conditions.47