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

RELATED PARTY TRANSACTIONSCapital Trust GroupCapital Trust Group, through its subsidiaries, provides international merchant and investment banking services.Preem paid Capital Trust Group a fee of $27 million in connection with the arrangement of the 2008 Credit Facility.In addition, Capital Trust Group, through its subsidiaries, provides certain technical and advisory services to Preemand its subsidiaries. The contract governing these services automatically renews on an annual basis unless terminated byeither party and provides for an annual fee of $2.5 million.The agreement has not been terminated. Mr. John P. Oswald, a former director of Preem and Corral PetroleumHoldings, is a principal shareholder of Capital Trust. Mr. Bassam Aburdene, a director of Preem and Corral PetroleumHoldings, is also a principal shareholder of Capital Trust. Preem believes that the foregoing transactions were entered into onterms no less favorable to it or to its subsidiaries than those that could have been obtained from an unrelated third party.Midroc Europe ABMidroc Europe AB, a company in which Mr. Al-Amoudi has a majority interest, has provided and continues toprovide maintenance and construction services, through its subsidiaries, including Midroc Electro AB, MidrocEngineering AB and Metalock Sweden AB to Preem (of which Mr. Al-Amoudi is also Chairman and director). For theseservices, we paid SEK 175 million (€19 million) in 2010, SEK 156 million (€17 million) in 2009 and SEK 146 million(€16 million) in 2008. Many of these services are provided on an as-needed basis. Accordingly, the amounts paid for theseservices may vary from year to year depending on the amount of services provided. Preem believes that the foregoingtransactions were entered into on terms no less favorable to us than those that could have been obtained from an unrelatedthird party.SAMIRPreem occasionally sells liquefied petroleum gas to SAMIR, a company in which CMH has a majority interest and isindirectly 100% owned by Mr. Al-Amoudi. We received SEK 0 million in 2010, SEK 0 million in 2009 and SEK 8 million(€1 million) in 2008 for such sales. The sales were made at market prices.Huda Trading ABPreem and Huda Trading AB agreed to conduct business involving the purchase, storage and sale of oil, specificallywhen the market is in “contango” meaning that forward prices of crude oil or refined products exceed current spot marketprices. Huda Trading AB is 100% owned by Huda Holdings Limited, which is 100% controlled by Mr. Al-Amoudi. Theagreement also includes the provision of operational and administrative support from Preem. Sales totaled SEK 1,756million (€192 million) in 2010, SEK 1,291 million (€141 million) in 2009 and SEK 1,456 million (€159 million) in 2008, andpurchases totaled SEK 2,051 million (€224 million) in 2010, SEK 1,311 million (€143 million) in 2009 andSEK 1,032 million (€113 million) in 2008.Svenska Petroleum Exploration ABDuring 2008, Preem had an agreement with Svenska Petroleum Exploration AB, which is indirectly 100% owned byMr. Al-Amoudi, for the sale of administrative services. Sales totaled SEK 0 million in 2010, SEK 0 million in 2009 andSEK 1 million in 2008.Corral Morocco Gas & OilOn February 6, 2006, Corral Morocco Gas & Oil, which is indirectly 100% owned by Mr. Al-Amoudi, issued anddelivered a promissory note to Corral Petroleum Holdings for a principal amount of approximately SEK 3,136 million(€343 million) with an interest rate of 5.0% per annum. As of June 30, 2011, the outstanding principal, including capitalizedinterest, is approximately SEK 3,418 million (€374 million). After seven years from the date of execution of the promissorynote, Corral Petroleum Holdings may demand repayment in full, plus all accrued and unpaid interest, upon nine monthsnotice.Constellation Holdings LLCConstellation Holdings LLC provides strategic and investment banking advisory services and is acting as an advisorto Preem in consultative and advisory services on strategic issues. The contract governing these services will beautomatically renewed on an annual basis unless terminated by either party and provides for an annual fee of $2.5 million.53