Glossary and definitions

2

  1. 2021 Notes

    2021 Notes refers to the (i) €570,000,000 aggregate principal amount of euro-denominated 11.750% / 13.250% senior PIK toggle notes due 15 May 2021, issued by CPH on May 9, 2016, and (ii) SEK 500,000,000 aggregate principal amount of Swedish krona-denominated 12.250% / 13.750% senior PIK toggle notes due 15 May 2021, issued by CPH on May 9, 2016.

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A

  1. ACP Diesel

    Active cleaning power (ACP) is a multi-functional additive that Preem has blended in our diesel since 2006. ACP prevents coatings from forming in the engine’s injection system. This coating impairs the performance of the engine and leads to higher fuel consumption.

  2. Adjusted EBITDA

    Adjusted EBITDA is defined as EBITDA further adjusted to exclude inventory gains, losses and foreign currency gains and losses, and certain non-recurring items. Adjusted EBITDA is not an IFRS measure.

    Adjusted EBITDA is defined as EBITDA further adjusted to exclude inventory gains and losses and foreign currency gains and losses and reflects the adjustments permitted in calculating covenant compliance under the A&R Credit Facility. We believe that the inclusion of supplemental adjustments to EBITDA applied in presenting Adjusted EBITDA are appropriate to provide additional information to investors about certain material normalizing items and create a useful indicator of our ability to finance our operations, capital expenditures and other investments and our ability to incur and service debt. Funds depicted by this measure may not be available for management's discretionary use or for service of payment of interest or principle on our outstanding indebtedness. Because all companies do not calculate Adjusted EBITDA identically, the presentation of Adjusted EBITDA may not be comparable to similarly entitled measures of other companies. The figures presents a reconciliation of EBITDA to Adjusted EBITDA.

    For more information please see Corral interim reports, page 14.

  3. AEL

    Accepted Emission Levels

  4. Aromatic

    Hydrocarbon compounds produced in the distillation process, the content of which in refined products is often regulated by applicable environmental laws.

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B

  1. BAT

    Best Available Technology

  2. Benzene

    An aromatic compound, the presence of which in refined products is often regulated by applicable environmental laws.

  3. Biofuel

    Liquid or gaseous fuel made of biomass and used for transportation
    purposes.

  4. Brent oil

    A benchmark oil for the various types of oils in the North Sea,
    used as the basis for pricing.

  5. Bunker fuel

    Fuel oil used as transportation fuel for ships.

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C

  1. Crack spread

    The product crack spread refers to the differential between the product price and the price of Brent crude oil, expressed in dollar per barrel.

  2. Crude tall oil

    A by-product from the pulp and paper industry, which is usually used as a chemical feedstock and which is planned for use in diesel production. 

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D

  1. Dated Brent Crude

    A cargo of North Sea Brent blend crude oil that has been assigned a date when it will be loaded onto a tanker. 

  2. Diesel

    A refined product from the middle range of the distillation process, used primarily as a fuel source for vehicles.

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E

  1. EBITDA

    Net profit/loss before interest, taxes, depreciations and amortizations, and adjusted for other financial expenses and other financial income.

     

    EBITDA, which we define to mean operating income before depreciation and amortization, is not a measure of liquidity or performance calculated in accordance with IFRS and should not be considered as a substitute for operating earnings, net profit, cash flows from operating activities or other statements of operations or cash flow data computed in accordance with IFRS. We believe that EBITDA provides useful information to investors because it is a measure of cash flow and an indicator of our ability to finance our operations, capital expenditures and other investments and our ability to incur and service debt. While depreciation and amortization are considered operating costs, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. Funds depicted by this measure may not be available for management's discretionary use or for service of payment of interest or principle on our outstanding indebtedness. Because all companies do not calculate EBITDA identically, the presentation of EBITDA may not be comparable to similarly entitled measures of other companies. EBITDA is also calculated differently from “Consolidated EBITDA” for purposes of various covenants applicable to us under the 2021 Notes.  The EBITA figures presents a reconciliation of net income to EBITDA.

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F

  1. FAME

    Fatty Acid Methyl Esters, usually obtained from vegetable/
    seed oils.

  2. FCC

    Fluid catalytic cracker unit: a refinery unit that uses a chemical process by means of a catalyst to create a new, smaller molecules from larger molecules to make gasoline and distillate fuels.

  3. Fossil fuels

    Are mainly oil, coal and natural gas. They consist of organic materials containing carbon and hydrogen compounds which are stored in bedrock. Fossil fuels are currently the dominant primary energy source on Earth.

  4. Fuel oil

    A refined product from the lower range of the distillation process, used primarily by industrial customers, like electric utilities, for steam and power generation.

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G

  1. Gasoline

    A refined product from the middle range of the distillation process, used primarily as a fuel for vehicles.

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H

  1. Heating oil

    A refined product from the lower range of the distillation process, used as a heating fuel or a fuel for combustion engines in industrial, residential, agricultural and commercial sectors.

  2. HPU

    Hydrogen production unit: a refinery unit that produces hydrogen for use refinery processes.

  3. HS

    High sulfur crude oil.

  4. HVO

    Stands for Hydrogenated Vegetable Oil and is a renewable fuel component that can be blended in diesel or used instead of diesel in diesel engines. Hydrogenated vegetable oil consists of a vegetable oil or animal fats refined using hydrogen under the influence of a catalyzer in order to raise quality, turning it into a fuel for diesel engines. Preem’s tall oil, which is found in Preem Evolution Diesel, is an HVO.

  5. Hydrocracking

    Sophisticated refinery process that converts residual products into lighter hydrocarbons under conditions of high temperature and pressure.

  6. Hydroskimming

    A basic refining process with some limited ability to produce gasoline.

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I

  1. IsoGHT

    Preem’s new IsoGHT plant enables diesel production using raw
    materials such as tall oil. GHT stands for Green Hydro Treater. Isomerization (Iso) chemically transforms straight hydrocarbons into branched hydrocarbons, giving the fuel superb cold weather properties.

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K

  1. Kerosene

    A refined product from the middle range of the distillation process, used either as a fuel for aviation turbines (jet engines) or as a heating fuel in smaller residential, agricultural or commercial sectors.

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L

  1. Lignin

    A residual of the Swedish forest industry and one of the most commonly occurring organic compounds in nature which helps give wood its mechanical strength. 

  2. Liquefied petroleum gas/LPG

    Liquefied petroleum gas (butane and propane or a mixture of both) used as a fuel for heating, cooking and lighting.

  3. LNG ships

    LNG stands for Liquefied Natural Gas. It is liquefied gas, mainly
    methane, that has been transformed to liquid by being cooled to -163°C under atmospheric pressure. One metric ton of LNG is equal to around 1,400 cubic meters of gas. Special ships are used to transport LNG.

  4. LS

    Low sulfur crude oil.

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M

  1. MHC

    Mild hydrocracker unit: a refinery unit that desulfurizes vacuum gasoil and converts it into lighter products and feedstock for the hydrocracker.

  2. Middle distillates

    A refined product from the middle range of the distillation process. Middle distillates include diesel, heating oil and jet/kerosene.

  3. MK1

    The designation for Swedish Environment Class 1 diesel.

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N

  1. Naphtha

    A refined product from the higher range of the distillation process, used as a solvent and as an additive for the manufacture of ethylene and other petrochemicals.

  2. Nelson Complexity Index

    A measure of the secondary conversion capacity of a petroleum refinery relative to the primary distillation capacity.

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O

  1. OPEC

    Refers to Organization of the Petroleum Exporting Countries, a perpetual, intergovernmental organization.

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P

  1. PFAD

    Palm Fatty Acid Distillates are produced by refining crude palm oil. Used as a raw material for producing biodiesel. Preem’s fuel does not contain palm oil or PFAD.

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R

  1. Refinery

    A plant where crude oil and renewable raw materials are transformed
    into vehicle fuels.

  2. Refining margin

    Gross refining margin less variable refining costs, which consist of volume-related costs, such as the cost of energy. 

  3. Reformer plant

    Converts naphtha into gasoline by raising the octane rating.

  4. Renewable fuels

    Renewable fuels are made from sources that are constantly regenerating and therefore will not be depleted within the foreseeable future. The most common are biodiesel, biogas and ethanol. Renewable fuels are part of a closed cycle and do not create a net surplus of carbon dioxide greenhouse gases when used.

  5. Residuals

    Materials remaining after a completed process, whose main purpose is not to produce this material and where the process has not been deliberately changed to produce the material.

  6. Return on adjusted equity

    Profit/loss after tax as a percentage of average adjusted equity.

  7. Return on capital employed

    Profit/loss before borrowing expense as a percentage of average capital employed.

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S

  1. SAMIR

    Refers to the Société Anonyme Marocaine de l’Industrie du Raffinage.

  2. Self-financing ratio

    Net financing from the year’s operations in accordance with the Consolidated cash flow statement as a percentage of capital expenditures in plants.

  3. Shale oil

    An oil produced from oil shale through a process that converts the organic substance in the rock.

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T

  1. Tall oil

    A mixture of compounds obtained as a by-product of wood processing, such as from the pulp and paper industry.

  2. Turnaround

    A fundamental overhaul of a refinery where the entire refinery is shut down for inspection and maintenance.

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V

  1. VDU

    Vacuum distillation unit: a secondary processing unit consisting of vacuum distillation columns. Vacuum distillation helps to produce products out of the heavier oils left over from atmospheric distillation.

  2. VGO

    Vacuum gasoil: an intermediate refining feedstock which is upgraded by further processing for end-user consumption.

  3. VLCC

    Very large crude carrier. A tanker designed to carry between approximately 160,000 and 320,000 deadweight metric tons.

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W

  1. WAF

    West African crude oil.

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