State Trading Organization (STO) has signed a term sheet agreement with Vitol, the Swiss-based Dutch energy and commodity trader, for the International Bunkering Project in Ihavandhippolhu.
The signing took place on Wednesday morning, March 13, 2024, where the agreement was signed between STO Chief Executive Officer and Managing Director Shimad Ibrahim and Vitol’s Director Jay Ng.
After the signing ceremony, STO Managing Director highlighted the exclusivity right extended to the organization to carry out bunkering activities in the Maldives, and added he was delighted to partner with Vitol.
Shimad thanked Maldives President Dr. Mohamed Muizzu and the Economic Council he set up, for their support and guidance.
The STO front man also said subsequent to the agreement signing, the organization and its Vitol will carry out technical and financial feasibility with the assistance of Maldives Ports Limited (MPL) and MNDF Coastguard.
“I am confident that this project would bring [a] lot of economic benefits for the country, including enhanced revenue and profit of STO, enhance dividend that we pay to our shareholders as well as tax revenue to the government,” Shimad said.
He further said the bunkering project will increase foreign currency exchangeability and the foreign currency reserve of the Maldives. Shimad also said the project will enhance growth opportunities for several SMEs in affiliated sectors.
Vitol’s Director, Jay Ng, thanked the Maldives government and emphasized the corporation’s relationship with STO went several years back. He highlighted that the strong ties between STO and Vitol are underpinned with the signing of “two remarkable and landmark transactions”; which include the “highly strategic petroleum-product supply contract” and the bunkering project.
“The bunker business is a global business for Vitol, with significant supply hubs in Singapore, UAE, Turkey, United States and many more. Vitol delivered roughtly 6% of the global bunker deliver(y) market in 2023, which is roughly 13 million tons out of a global quantity of 230 million tons,” Jay added.
As part of the agreement, Vitol will lend its advanced trading knowledge, customer relationships, and superior technical and logistic capabilities to STO.