UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
20-F




(Mark
One)




[  ]
            REGISTRATION
      STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THESECURITIES
      EXCHANGE ACT OF 1934





OR





[X]
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIESEXCHANGE
      ACT OF 1934For
      the fiscal year endedDecember 31, 2008





OR





[  ]
                TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIESEXCHANGE
      ACT OF 1934For
      the transition period from _________________ to
      _________________





OR





[  ]
            SHELL
      COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
      EXCHANGE ACT OF 1934





Date
of event requiring this shell company report _________________





Commission
file number 001-33179





AEGEAN
      MARINE PETROLEUM NETWORK INC.(Exact
      name of Registrant as specified in its charter)(Translation
      of Registrant's name into English)The
      Republic of the Marshall Islands(Jurisdiction
      of incorporation or organization)42
      Hatzikyriakou Avenue, Piraeus 185 38 Athens, Greece(Address
      of principal executive offices)E.
      Nikolas Tavlarios, investor@ampni.com,
      299 Park Avenue, 2nd
      Floor, New York, New York 10171(Name,
      Telephone, E-mail and/or Facsimile, and address of Company Contact
      Person)











Securities
registered or to be registered pursuant to section 12(b) of the
Act.





Title
      of each class
            
            Name
      of each exchange on which registeredCommon
      stock, par value $0.01 per share
            
            New
      York Stock Exchange





Securities
registered or to be registered pursuant to section 12(g) of the
Act.




NONE(Title
      of class)




*
Not for trading, but only in connection with the registration of American
Depositary Shares, pursuant to the requirements of the Securities and Exchange
Commission.





Securities
for which there is a reporting obligation pursuant to Section 15(d) of the
Act.




NONE(Title
      of class)


Indicate
the number of outstanding shares of each of the issuer's classes of capital or
common stock as of the close of the period covered by the annual
report.





42,841,303
shares of common stock, par value $0.01 per share.





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.





Yes
                    
                    
                    No
                    X





If
this report is an annual or transition report, indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.





Yes
              
              
              No
              X





Note
– Checking the box above will not relieve any registrant required to file
reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
from their obligations under those Sections.




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.





Yes
              X
              
              No




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
 Yes
                  
                  
                  No
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer.  See the definitions of
"large accelerated filer" and "accelerated filer" in Rule 12b-2 of the Exchange
Act. (Check one):





Large
      accelerated filer  [X]
            Accelerated
      filer [_]Non-accelerated
      filer [_]














Indicate
by check mark which basis of accounting the registrant has used to prepare the
financial statements included in this filing:





X
            U.S.GAAPInternational Financial Reporting
      Standards as issued by the international Accounting Standards
      BoardOther





If
"Other" has been checked in response to the previous question, indicate by check
mark which financial statement item the registrant has elected to
follow:





Item 17
                      
                      Item 18





If
this is an annual report, indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act).





Yes
              
              
              No
              X
















TABLE
OF CONTENTS




PART I




ITEM 1
      -IDENTITY OF DIRECTORS, SENIOR
      MANAGEMENT AND ADVISERS
            1ITEM 2 -  
         OFFER STATISTICS AND EXPECTED TIMETABLE
            1ITEM 3
      -KEY INFORMATION
            1ITEM 4
      - INFORMATION ON THE
      COMPANY
            18ITEM 4A - UNRESOLVED STAFF COMMENTS
            34ITEM 5
      -      OPERATING AND FINANCIAL REVIEW AND
      PROSPECTS
            34ITEM 6
      -      DIRECTORS, SENIOR MANAGEMENT AND
      EMPLOYEES
            59ITEM 7
      -      MAJOR SHAREHOLDERS AND RELATED PARTY
      TRANSACTIONS
            64ITEM 8
      -      FINANCIAL INFORMATION
            67ITEM 9
      -      THE OFFER AND LISTING
            67ITEM 10 -  
       ADDITIONAL INFORMATION
            68ITEM 11 -   
      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
            73ITEM 12 -  
       DESCRIPTION OF SECURITIES OTHER THAN EQUITY
    SECURITIES
            74





PART II





ITEM 13 -  
       DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
            74ITEM 14 -  
       MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
              AND
      USE OF PROCEEDS
            74ITEM 15 -  
       CONTROLS AND PROCEDURES
            74ITEM 16A -AUDIT
      COMMITTEE FINANCIAL EXPERT
            75ITEM 16B - CODE OF
      ETHICS
            75ITEM 16C -PRINCIPAL
      ACCOUNTANT FEES AND RELATED SERVICES
            75ITEM 16D
      -EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
      COMMITTEE
            75ITEM 16E
      - PURCHASES OF EQUITY SECURITIES BY ISSUER AND
      AFFILIATES
            76ITEM 16F - CHANGE IN
      REGISTRANT'S CERTIFYING ACCOUNTANT
            76ITEM 16G -CORPORATE
      GOVERNANCE
            76





PART III





ITEM 17 - FINANCIAL STATEMENTS
            76ITEM 18 -  
      FINANCIAL STATEMENTS
            76ITEM 19 -EXHIBITS
            76INDEX
      TO FINANCIAL STATEMENTS
            F-1




















CAUTIONARYSTATEMENT REGARDING FORWARD-LOOKING
STATEMENTS





Matters
discussed in this report may constitute forward-looking statements. The Private
Securities Litigation Reform Act of 1995 provides safe harbor protections for
forward-looking statements in order to encourage companies to provide
prospective information about their business. Forward-looking statements include
statements concerning plans, objectives, goals, strategies, future events or
performance, and underlying assumptions and other statements, which are other
than statements of historical facts.




Aegean
Marine Petroleum Network Inc., or the Company, desires to take advantage of the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995
and is including this cautionary statement in connection with this safe harbor
legislation. This report and any other written or oral statements made by us or
on our behalf may include forward-looking statements, which reflect our current
views with respect to future events and financial performance. When used in this
report, the words "anticipate," "believe," "expect," "intend," "estimate,"
"forecast," "project," "plan," "potential," "may," "should," and similar
expressions identify forward-looking statements.




The
forward-looking statements in this report are based upon various assumptions,
many of which are based, in turn, upon further assumptions, including without
limitation, management's examination of historical operating trends, data
contained in our records and other data available from third parties. Important
assumptions relating to the forward-looking statements include, among other
things, assumptions regarding demand for our products, the cost and availability
of refined marine fuel from suppliers, pricing levels, the timing and cost of
capital expenditures, competitive conditions, and general economic conditions.
These assumptions could prove inaccurate.  Although we believe that
these assumptions were reasonable when made, because these assumptions are
inherently subject to significant uncertainties and contingencies which are
difficult or impossible to predict and are beyond our control, we cannot assure
you that we will achieve or accomplish these expectations, beliefs or
projections.




In
addition to these assumptions and matters discussed elsewhere herein, important
factors that, in our view, could cause actual results to differ materially from
those discussed in the forward-looking statements include: our future operating
or financial results; our future payment of dividends and the availability of
cash for payment of dividends; our ability to retain and attract senior
management and other key employees; our ability to manage growth; our ability to
maintain our business in light of our proposed business and location expansion;
our ability to obtain double hull bunkering tankers given the scarcity of such
vessels in general; the outcome of legal, tax or regulatory proceedings to which
we may become a party; adverse conditions in the shipping or the marine fuel
supply industries; our ability to retain our key suppliers and key customers;
our contracts and licenses with governmental entities remaining in full force
and effect; material disruptions in the availability or supply of crude oil or
refined petroleum products; changes in the market price of petroleum, including
the volatility of spot pricing; increased levels of competition; compliance or
lack of compliance with various environmental and other applicable laws and
regulations; our ability to collect accounts receivable; changes in the
political, economic or regulatory conditions in the markets in which we operate,
and the world in general; our future, pending or recent acquisitions, business
strategy, areas of possible expansion, and expected capital spending or
operating expenses; our failure to hedge certain financial risks associated with
our business; uninsured losses; our ability to maintain our current tax
treatment; our failure to comply with restrictions in our credit agreements;
increases in interest rates; and other important factors described from time to
time in our U.S. Securities and Exchange Commission filings.







PART
I




ITEM
      1.
            IDENTITY
      OF DIRECTORS, SENIOR MANAGEMENT AND
ADVISERS




Not
applicable.




ITEM 2.
            OFFER STATISTICS AND EXPECTED
      TIMETABLE




Not
applicable.




ITEM
      3.
            KEY
      INFORMATION




Please
note:  Throughout this report, all references to "we," "our," "us" and
the "Company" refer to Aegean Marine Petroleum Network Inc. and its
subsidiaries. We use the term deadweight ton, or dwt, in describing the size of
vessels. Dwt, expressed in metric tons, each of which is equivalent to 1,000
kilograms, refers to the maximum weight of cargo and supplies that a vessel can
carry. Unless otherwise indicated, all references to "dollars" and "$" in this
report are to, and amounts are presented in, U.S. dollars.




A. Selected Financial
Data




For
      the Year Ended
                                                                            December 31,2004
                                                                          
                                                                          
                                                                          2005
                                                                          
                                                                          
                                                                          2006
                                                                          
                                                                          
                                                                          2007
                                                                          
                                                                          
                                                                          2008(in
      thousands of U.S. dollars, except for share
                                                                              and
      per share data which are presented in U.S. dollars)Income
      Statement Data:Sales
      of marine petroleum products
                                                                          
                                                                          
                                                                          247,436
                                                                          
                                                                          
                                                                          
                                                                          505,605
                                                                          
                                                                          
                                                                          
                                                                          790,657
                                                                          
                                                                          
                                                                          
                                                                          1,345,849
                                                                          
                                                                          
                                                                          
                                                                          2,768,067Voyage
      revenues
                                                                          
                                                                          
                                                                          14,983
                                                                          
                                                                          
                                                                          
                                                                          10,450
                                                                          
                                                                          
                                                                          
                                                                          11,639
                                                                          
                                                                          
                                                                          
                                                                          5,758
                                                                          
                                                                          
                                                                          
                                                                          1,379Other
      revenues
                                                                          
                                                                          
                                                                          593
                                                                          
                                                                          
                                                                          
                                                                          1,275
                                                                          
                                                                          
                                                                          
                                                                          1,516
                                                                          
                                                                          
                                                                          
                                                                          1,266
                                                                          
                                                                          
                                                                          
                                                                          8,526Total
      revenues
                                                                          
                                                                          
                                                                          263,012
                                                                          
                                                                          
                                                                          
                                                                          517,330
                                                                          
                                                                          
                                                                          
                                                                          803,812
                                                                          
                                                                          
                                                                          
                                                                          1,352,873
                                                                          
                                                                          
                                                                          
                                                                          2,777,972Cost
      of marine petroleum products sold
                                                                          
                                                                          
                                                                          222,439
                                                                          
                                                                          
                                                                          
                                                                          464,801
                                                                          
                                                                          
                                                                          
                                                                          728,637
                                                                          
                                                                          
                                                                          
                                                                          1,251,712
                                                                          
                                                                          
                                                                          
                                                                          2,594,443Salaries,
      wages and related costs
                                                                          
                                                                          
                                                                          5,052
                                                                          
                                                                          
                                                                          
                                                                          8,958
                                                                          
                                                                          
                                                                          
                                                                          12,871
                                                                          
                                                                          
                                                                          
                                                                          24,363
                                                                          
                                                                          
                                                                          
                                                                          41,666Vessel
      hire charges
                                                                          
                                                                          
                                                                          2,436
                                                                          
                                                                          
                                                                          
                                                                          518
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -Depreciation
                                                                          
                                                                          
                                                                          1,546
                                                                          
                                                                          
                                                                          
                                                                          2,226
                                                                          
                                                                          
                                                                          
                                                                          4,240
                                                                          
                                                                          
                                                                          
                                                                          6,373
                                                                          
                                                                          
                                                                          
                                                                          12,604Amortization
      of drydocking costs
                                                                          
                                                                          
                                                                          386
                                                                          
                                                                          
                                                                          
                                                                          636
                                                                          
                                                                          
                                                                          
                                                                          1,684
                                                                          
                                                                          
                                                                          
                                                                          3,172
                                                                          
                                                                          
                                                                          
                                                                          3,640Amortization
      of concession agreement
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          52
                                                                          
                                                                          
                                                                          
                                                                          313Management
      fees
                                                                          
                                                                          
                                                                          183
                                                                          
                                                                          
                                                                          
                                                                          182
                                                                          
                                                                          
                                                                          
                                                                          223
                                                                          
                                                                          
                                                                          
                                                                          54
                                                                          
                                                                          
                                                                          
                                                                          -Gain
      on sale of vessel
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          (2,693
                                                                          )
                                                                          
                                                                          
                                                                          -Other
      operating expenses
                                                                          
                                                                          
                                                                          12,348
                                                                          
                                                                          
                                                                          
                                                                          16,629
                                                                          
                                                                          
                                                                          
                                                                          25,697
                                                                          
                                                                          
                                                                          
                                                                          39,042
                                                                          
                                                                          
                                                                          
                                                                          73,157Operating
      income
                                                                          
                                                                          
                                                                          18,622
                                                                          
                                                                          
                                                                          
                                                                          23,380
                                                                          
                                                                          
                                                                          
                                                                          30,460
                                                                          
                                                                          
                                                                          
                                                                          30,798
                                                                          
                                                                          
                                                                          
                                                                          52,149Write-off
      of deferred offering costs (1)
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          (1,588
                                                                          )
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -Interest
      and finance costs
                                                                          
                                                                          
                                                                          (944
                                                                          )
                                                                          
                                                                          
                                                                          (2,347
                                                                          )
                                                                          
                                                                          
                                                                          (5,207
                                                                          )
                                                                          
                                                                          
                                                                          (3,473
                                                                          )
                                                                          
                                                                          
                                                                          (12,377
                                                                          )Interest
      income
                                                                          
                                                                          
                                                                          13
                                                                          
                                                                          
                                                                          
                                                                          70
                                                                          
                                                                          
                                                                          
                                                                          976
                                                                          
                                                                          
                                                                          
                                                                          1,990
                                                                          
                                                                          
                                                                          
                                                                          501Foreign
      exchange gains (losses), net
                                                                          
                                                                          
                                                                          (68
                                                                          )
                                                                          
                                                                          
                                                                          396
                                                                          
                                                                          
                                                                          
                                                                          (414
                                                                          )
                                                                          
                                                                          
                                                                          (1,569
                                                                          )
                                                                          
                                                                          
                                                                          1,521Income
      taxes
                                                                          
                                                                          
                                                                          (6
                                                                          )
                                                                          
                                                                          
                                                                          (24
                                                                          )
                                                                          
                                                                          
                                                                          (2
                                                                          )
                                                                          
                                                                          
                                                                          (8
                                                                          )
                                                                          
                                                                          
                                                                          (1,879
                                                                          )Net
      income
                                                                          
                                                                          
                                                                          17,617
                                                                          
                                                                          
                                                                          
                                                                          21,475
                                                                          
                                                                          
                                                                          
                                                                          24,225
                                                                          
                                                                          
                                                                          
                                                                          27,738
                                                                          
                                                                          
                                                                          
                                                                          39,915Basic
      earnings per share (2)
                                                                          
                                                                          
                                                                          0.58
                                                                          
                                                                          
                                                                          
                                                                          0.72
                                                                          
                                                                          
                                                                          
                                                                          0.84
                                                                          
                                                                          
                                                                          
                                                                          0.65
                                                                          
                                                                          
                                                                          
                                                                          0.94Diluted
      earnings per share (2)
                                                                          
                                                                          
                                                                          0.58
                                                                          
                                                                          
                                                                          
                                                                          0.72
                                                                          
                                                                          
                                                                          
                                                                          0.84
                                                                          
                                                                          
                                                                          
                                                                          0.65
                                                                          
                                                                          
                                                                          
                                                                          0.94Weighted
      average number of shares, basic (2)
                                                                          
                                                                          
                                                                          30,472,827
                                                                          
                                                                          
                                                                          
                                                                          29,878,398
                                                                          
                                                                          
                                                                          
                                                                          28,954,521
                                                                          
                                                                          
                                                                          
                                                                          42,417,111
                                                                          
                                                                          
                                                                          
                                                                          42,497,450Weighted
      average number of shares, diluted (2)
                                                                          
                                                                          
                                                                          30,472,827
                                                                          
                                                                          
                                                                          
                                                                          29,878,398
                                                                          
                                                                          
                                                                          
                                                                          28,954,622
                                                                          
                                                                          
                                                                          
                                                                          42,505,704
                                                                          
                                                                          
                                                                          
                                                                          42,625,801Dividends
      declared per share (2)
                                                                          
                                                                          
                                                                          0.28
                                                                          
                                                                          
                                                                          
                                                                          0.05
                                                                          
                                                                          
                                                                          
                                                                          0.14
                                                                          
                                                                          
                                                                          
                                                                          0.04
                                                                          
                                                                          
                                                                          
                                                                          0.04







1




As
      of and for the Year Ended
                    December 31,2004
                  
                  
                  2005
                  
                  
                  2006
                  
                  
                  2007
                  
                  
                  2008(in
      thousands of U.S. dollars, unless otherwise stated)Balance
      Sheet Data:Cash
      and cash equivalents
                  
                  
                  3,280
                  
                  
                  
                  7,602
                  
                  
                  
                  82,425
                  
                  
                  
                  1,967
                  
                  
                  
                  46,927Total
      assets
                  
                  
                  78,573
                  
                  
                  
                  161,359
                  
                  
                  
                  315,877
                  
                  
                  
                  566,957
                  
                  
                  
                  641,907Total
      debt
                  
                  
                  26,689
                  
                  
                  
                  101,236
                  
                  
                  
                  33,496
                  
                  
                  
                  208,031
                  
                  
                  
                  253,621Total
      liabilities
                  
                  
                  54,112
                  
                  
                  
                  151,832
                  
                  
                  
                  100,878
                  
                  
                  
                  323,232
                  
                  
                  
                  356,904Total
      stockholders' equity
                  
                  
                  24,461
                  
                  
                  
                  9,527
                  
                  
                  
                  214,999
                  
                  
                  
                  243,725
                  
                  
                  
                  285,003Other
      Financial Data:Gross
      spread on marine petroleum products (3)
                  
                  
                  24,997
                  
                  
                  
                  40,804
                  
                  
                  
                  62,020
                  
                  
                  
                  89,671
                  
                  
                  
                  160,963Gross
      spread on lubricants(3)
                  
                  
                  374
                  
                  
                  
                  264
                  
                  
                  
                  455
                  
                  
                  
                  536
                  
                  
                  
                  1,298Gross
      spread on marine fuel(3)
                  
                  
                  24,623
                  
                  
                  
                  40,540
                  
                  
                  
                  61,565
                  
                  
                  
                  89,135
                  
                  
                  
                  159,665Gross
      spread per metric ton of marine fuel sold (U.S. dollars) (3)
                  
                  
                  21.1
                  
                  
                  
                  23.2
                  
                  
                  
                  26.0
                  
                  
                  
                  25.9
                  
                  
                  
                  30.7Net
      cash provided by (used in) operating activities
                  
                  
                  17,333
                  
                  
                  
                  1,475
                  
                  
                  
                  17,064
                  
                  
                  
                  (128,128
                  )
                  
                  
                  136,737Net
      cash used in investing activities
                  
                  
                  29,360
                  
                  
                  
                  34,973
                  
                  
                  
                  55,190
                  
                  
                  
                  124,692
                  
                  
                  
                  135,667Net cash provided by financing
      activities
                  
                  
                  13,435
                  
                  
                  
                  37,820
                  
                  
                  
                  112,949
                  
                  
                  
                  172,362
                  
                  
                  
                  43,890Operating
      Data:Sales
      volume of marine fuel (metric tons) (4)
                  
                  
                  1,169,430
                  
                  
                  
                  1,746,377
                  
                  
                  
                  2,367,289
                  
                  
                  
                  3,437,269
                  
                  
                  
                  5,200,256Number
      of markets served, end of period (5)
                  
                  
                  3.0
                  
                  
                  
                  4.0
                  
                  
                  
                  5.0
                  
                  
                  
                  6.0
                  
                  
                  
                  11.0Number
      of operating bunkering vessels, end of period (6)
                  
                  
                  9.0
                  
                  
                  
                  10.0
                  
                  
                  
                  12.0
                  
                  
                  
                  17.0
                  
                  
                  
                  30.0Average
      number of operating bunkering vessels (6)(7)
                  
                  
                  6.8
                  
                  
                  
                  9.0
                  
                  
                  
                  11.1
                  
                  
                  
                  13.5
                  
                  
                  
                  22.7Specialty
      tankers, end of period
                  
                  
                  
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1Special
      purpose vessels, end of period (8)
                  
                  
                  
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1Floating
      storage facilities, end of period (9)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  2
                  
                  
                  
                  2
                  
                  
                  
                  4







(1)
            On
      November 17, 2005, we filed a registration statement on Form F-1
      in connection with an initial public offering of 10,000,000 shares of
      our common stock. In early 2006, we postponed further activities in
      connection with that offering. Accordingly, during the year ended December
      31, 2006, we wrote off $1.6 million, representing all deferred costs
      incurred in connection with that
offering.




(2)
            Amounts
      give effect to the 1.26-for-one stock split effected November 21,
      2006 and the 24,184.783-for-one stock split effected November 14,
      2005.




(3)
            Gross
      spread on marine petroleum products represents the margin that we generate
      on sales of marine fuel and lubricants.  Gross spread on marine
      fuel represents the margin that we generate on sales of various
      classifications of marine fuel oil, or MFO, or marine gas oil, or MGO.
      Gross spread on lubricants represents the margin that we generate on sales
      of lubricants.  We calculate the gross spreads by subtracting
      from the sales of the respective marine petroleum product the cost of the
      marine petroleum product sold and cargo transportation
      costs.  For arrangements in which we physically supply marine
      petroleum products using our bunkering tankers, costs of marine petroleum
      products sold represents amounts paid by us for marine petroleum products
      sold in the relevant reporting period. For arrangements in which marine
      petroleum products are purchased from our related company, Aegean Oil
      S.A., or Aegean Oil, cost of marine petroleum products sold represents the
      total amount paid by us to the physical supplier for marine petroleum
      products and their delivery to our customers.  For arrangements
      in which we purchase cargos for our floating storage facilities, cargo
      transportation costs are either included in the purchase price of marine
      fuels that we paid to the supplier or paid separately by us to a
      third-party transportation
provider.




2







Gross
spread per metric ton of marine fuel sold represents the margins we generate per
metric ton of marine fuel sold. We calculate gross spread per metric ton of
marine fuel sold by dividing the gross spread on marine fuel by the sales volume
of marine fuel. Marine fuel sales do not include sales of lubricants. The
following table reflects the calculation of gross spread per metric ton of
marine fuel sold for the periods presented:


For
      the Year Ended
                                                                                          December 31,2004
                                                                                        
                                                                                        
                                                                                        2005
                                                                                        
                                                                                        
                                                                                        2006
                                                                                        
                                                                                        
                                                                                        2007
                                                                                        
                                                                                        
                                                                                        2008(in
      thousands of U.S. dollars, unless otherwise stated)Sales
      of marine petroleum products
                                                                                        
                                                                                        
                                                                                        247,436
                                                                                        
                                                                                        
                                                                                        
                                                                                        505,605
                                                                                        
                                                                                        
                                                                                        
                                                                                        790,657
                                                                                        
                                                                                        
                                                                                        
                                                                                        1,345,849
                                                                                        
                                                                                        
                                                                                        
                                                                                        2,768,067Less:
      Cost of marine petroleum products sold
                                                                                        
                                                                                        
                                                                                        222,439
                                                                                        
                                                                                        
                                                                                        
                                                                                        464,801
                                                                                        
                                                                                        
                                                                                        
                                                                                        728,637
                                                                                        
                                                                                        
                                                                                        
                                                                                        1,251,712
                                                                                        
                                                                                        
                                                                                        
                                                                                        2,594,443Less:
      Cargo transportation costs
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        4,466
                                                                                        
                                                                                        
                                                                                        
                                                                                        12,661Gross spread on marine petroleum
      products
                                                                                        
                                                                                        
                                                                                        24,997
                                                                                        
                                                                                        
                                                                                        
                                                                                        40,804
                                                                                        
                                                                                        
                                                                                        
                                                                                        62,020
                                                                                        
                                                                                        
                                                                                        
                                                                                        89,671
                                                                                        
                                                                                        
                                                                                        
                                                                                        160,963Less: Gross spread on
      lubricants
                                                                                        
                                                                                        
                                                                                        374
                                                                                        
                                                                                        
                                                                                        
                                                                                        264
                                                                                        
                                                                                        
                                                                                        
                                                                                        455
                                                                                        
                                                                                        
                                                                                        
                                                                                        536
                                                                                        
                                                                                        
                                                                                        
                                                                                        1,298Gross spread on marine
      fuel
                                                                                        
                                                                                        
                                                                                        24,623
                                                                                        
                                                                                        
                                                                                        
                                                                                        40,540
                                                                                        
                                                                                        
                                                                                        
                                                                                        61,565
                                                                                        
                                                                                        
                                                                                        
                                                                                        89,135
                                                                                        
                                                                                        
                                                                                        
                                                                                        159,665Sales volume of marine fuel
      (metric tons)
                                                                                        
                                                                                        
                                                                                        1,169,430
                                                                                        
                                                                                        
                                                                                        
                                                                                        1,746,377
                                                                                        
                                                                                        
                                                                                        
                                                                                        2,367,289
                                                                                        
                                                                                        
                                                                                        
                                                                                        3,437,269
                                                                                        
                                                                                        
                                                                                        
                                                                                        5,200,256Gross spread per metric ton of
      marine fuel sold (U.S. dollars)
                                                                                        
                                                                                        
                                                                                        21.1
                                                                                        
                                                                                        
                                                                                        
                                                                                        23.2
                                                                                        
                                                                                        
                                                                                        
                                                                                        26.0
                                                                                        
                                                                                        
                                                                                        
                                                                                        25.9
                                                                                        
                                                                                        
                                                                                        
                                                                                        30.7





The
following table reconciles our gross spread on marine petroleum products sold to
the most directly comparable GAAP measure, operating income, for all periods
presented:





For
      the Year Ended
                                                                December 31,2004
                                                              
                                                              
                                                              2005
                                                              
                                                              
                                                              2006
                                                              
                                                              
                                                              2007
                                                              
                                                              
                                                              2008(in
      thousands of U.S. dollars)Gross spread on marine petroleum
      products
                                                              
                                                              
                                                              24,997
                                                              
                                                              
                                                              
                                                              40,804
                                                              
                                                              
                                                              
                                                              62,020
                                                              
                                                              
                                                              
                                                              89,671
                                                              
                                                              
                                                              
                                                              160,963Add: Voyage
      revenues
                                                              
                                                              
                                                              14,983
                                                              
                                                              
                                                              
                                                              10,450
                                                              
                                                              
                                                              
                                                              11,639
                                                              
                                                              
                                                              
                                                              5,758
                                                              
                                                              
                                                              
                                                              1,379Add: Other
      revenues
                                                              
                                                              
                                                              593
                                                              
                                                              
                                                              
                                                              1,275
                                                              
                                                              
                                                              
                                                              1,516
                                                              
                                                              
                                                              
                                                              1,266
                                                              
                                                              
                                                              
                                                              8,526Add:Gain on sale of
      vessel
                                                              
                                                              
                                                              -
                                                              
                                                              
                                                              
                                                              -
                                                              
                                                              
                                                              
                                                              -
                                                              
                                                              
                                                              
                                                              2,693
                                                              
                                                              
                                                              
                                                              -Add:Cargo transportation
      costs
                                                              
                                                              
                                                              -
                                                              
                                                              
                                                              
                                                              -
                                                              
                                                              
                                                              
                                                              -
                                                              
                                                              
                                                              
                                                              4,466
                                                              
                                                              
                                                              
                                                              12,661Less: Salaries, wages and related
      costs
                                                              
                                                              
                                                              (5,052
                                                              )
                                                              
                                                              
                                                              (8,958
                                                              )
                                                              
                                                              
                                                              (12,871
                                                              )
                                                              
                                                              
                                                              (24,363
                                                              )
                                                              
                                                              
                                                              (41,666
                                                              )Less: Vessel hire
      charges
                                                              
                                                              
                                                              (2,436
                                                              )
                                                              
                                                              
                                                              (518
                                                              )
                                                              
                                                              
                                                              -
                                                              
                                                              
                                                              
                                                              -
                                                              
                                                              
                                                              
                                                              -Less:
      Depreciation
                                                              
                                                              
                                                              (1,546
                                                              )
                                                              
                                                              
                                                              (2,226
                                                              )
                                                              
                                                              
                                                              (4,240
                                                              )
                                                              
                                                              
                                                              (6,373
                                                              )
                                                              
                                                              
                                                              (12,604
                                                              )Less:
      Amortization
                                                              
                                                              
                                                              (386
                                                              )
                                                              
                                                              
                                                              (636
                                                              )
                                                              
                                                              
                                                              (1,684
                                                              )
                                                              
                                                              
                                                              (3,224
                                                              )
                                                              
                                                              
                                                              (3,953
                                                              )Less: Management
      fees
                                                              
                                                              
                                                              (183
                                                              )
                                                              
                                                              
                                                              (182
                                                              )
                                                              
                                                              
                                                              (223
                                                              )
                                                              
                                                              
                                                              (54
                                                              )
                                                              
                                                              
                                                              -Less: Other operating
      expenses
                                                              
                                                              
                                                              (12,348
                                                              )
                                                              
                                                              
                                                              (16,629
                                                              )
                                                              
                                                              
                                                              (25,697
                                                              )
                                                              
                                                              
                                                              (39,042
                                                              )
                                                              
                                                              
                                                              (73,157
                                                              )Operating
      income
                                                              
                                                              
                                                              18,622
                                                              
                                                              
                                                              
                                                              23,380
                                                              
                                                              
                                                              
                                                              30,460
                                                              
                                                              
                                                              
                                                              30,798
                                                              
                                                              
                                                              
                                                              52,149





The
amount that we have to pay for marine petroleum products to fulfill a customer
order has been the primary variable in determining the prices quoted to
customers. Therefore, we evaluate gross spread per metric ton of marine fuel
sold and gross spread on marine petroleum products in pricing individual
transactions and in long-term strategic pricing decisions. We actively monitor
our pricing and sourcing strategies in order to optimize our gross spread on
marine petroleum products. We believe that this measure is important to
investors because it is an effective intermediate performance measure of the
strength of our operations.




3






Gross
spread on marine petroleum products (including gross spread on marine fuel and
gross spread on lubricants) and gross spread per metric ton of marine fuel sold
should not be considered as alternatives to operating income, net income or
other GAAP measures and may not be comparable to similarly titled measures of
other companies. Gross spread on marine petroleum products and gross spread per
metric ton of marine fuel sold do not reflect certain direct and indirect costs
of delivering marine petroleum products to our customers (such as crew salaries,
vessel depreciation, storage costs, other vessel operating expenses and overhead
costs) or other costs of doing business.




For
all periods presented, we purchased marine petroleum products in Greece from our
related company, Aegean Oil, which is a physical supplier in Greece. The cost of
these marine petroleum products was contractually calculated based on Aegean
Oil's actual cost of these products plus a margin. For further discussion please
refer to the section of this report entitled "Major Shareholders and Related
Party Transactions."




(4)
            The
      sales volume of marine fuel is the volume of sales of MFO and MGO for the
      relevant period and is denominated in metric tons. We do not utilize the
      sales volume of lubricants as an indicator. The sales volume of marine
      fuel includes the volume of sales made to the United States Navy, which
      individually accounted for approximately 24% and 3% of our total revenues
      for the years ended December 31, 2004 and 2005, respectively. Sales
      to the United States Navy comprised less than 1% of our total revenues for
      the years ended December 31, 2006, 2007 and
  2008.




(5)
            The
      number of markets served includes our operations at our service centers in
      the United Arab Emirates, Gibraltar, Jamaica, Singapore, Northern Europe,
      West Africa, Vancouver, Portland (U.K.) and Greece, where we conduct
      operations through our related company, Aegean Oil, as well as our trading
      operations in Montreal and Mexico. The number of markets served is an
      indicator of the geographical distribution of our operations and affects
      both the amount of revenues and expenses that we record during a given
      period. We commenced physical supply operations in Singapore on
      June 2, 2006, in Northern Europe on October 9, 2007, in Ghana on
      January 15, 2008, and in Portland (U.K.) on April 1, 2008.  On
      July 1, 2008, we acquired ICS Petroleum, a Canadian based marketer and
      supplier of marine petroleum products in Vancouver, Montreal and
      Mexico.




(6)
            Bunkering
      vessels includes both bunkering tankers and barges.  This data
      does not include our special purpose vessel, Orion, a 500 dwt tanker based
      in our Portland (U.K.) service
center.




(7)
            Average
      number of operating bunkering vessels is the number of operating bunkering
      vessels in our fleet for the relevant period, as measured by the sum of
      the number of days each bunkering vessel was used as a part of our fleet
      during the period divided by the cumulative number of calendar days in the
      period multiplied by the number of operating bunkering vessels at the end
      of the period.  This figure does not take into account
      non-operating days due to either scheduled or unscheduled
      maintenance.




(8)           
 This figure includes our service tanker, Orion, based in our Portland
(U.K.) service center.




(9)
            This
      figure includes our two Panamax tankers, Ouranos and Fos, used as floating
      storage facilities in the United Arab Emirates and Ghana, respectively,
      our Aframax tanker, Leader, used as a floating storage facility in
      Gibraltar, and our tanker, Aegean XI, used as a floating storage facility
      in Jamaica.




The
ownership of floating storage facilities allows us to mitigate risk of supply
shortages. Generally, storage costs are included in the price of refined marine
fuel quoted by local suppliers. We expect that the ownership of floating storage
facilities will allow us to convert the variable costs of a storage fee mark-up
per metric ton quoted by suppliers into fixed costs of operating our own storage
facilities, thus enabling us to spread larger sales volumes over a fixed cost
base and to decrease our marine petroleum products costs.




4





B.
            Capitalization
      and Indebtedness




Not
applicable.




C.
            Reasons
      for the Offer and Use of Proceeds




Not
applicable.




D.
            Risk
      Factors




Some
of the following risks relate principally to the industry in which we operate
and our business in general. The risks and uncertainties described below are not
the only ones we face.  Additional risks and uncertainties not
presently known to us or that we currently deem immaterial also may impair our
business operations.  If any of the following risks occur, our
business, financial condition, operating results and cash flows could be
materially adversely affected and the trading price of our securities could
decline.




Risk
Factors Relating to Our Business




If the contraction of the global credit
markets and the resulting volatility in thefinancial marketscontinues or worsens thenwe may
not be able to obtain sufficient funds to grow or effectively manage our
growth




A
principal focus of our strategy is to grow by expanding our business. Our future
growth depends, in part, on our ability to obtain financing for our existing and
new operations and business lines. Over the last year, global financial
markets have experienced extraordinary volatility following significant
contraction, deleveraging and reduced liquidityin the global credit markets.


Recently, a number ofmajorfinancial institutions have experienced
serious financial difficulties and, in some cases, have entered into bankruptcy
proceedings or are in regulatory enforcement actions. These difficulties may
adversely affect the financial institutions that may provide us with credit to
support our working capital requirements and may impair their ability to
continue to perform under their financing obligations to us, which couldnegatively impactour ability to fund current
and future obligations. We cannot predict how long the current market conditions
will last. However, these recent and developing economic factors may have a
material adverse effect on our ability to expand our
business.


Our
future growth will depend on a number of additional factors, which also may be
adversely affected in the current economic climate, which include our ability
to:


●
            increase
      our fleet of bunkering vessels;




●
            identify
      suitable markets for expansion;




●
            consummate
      vessel acquisitions;




●
            integrate
      acquired vessels successfully with our existing
  operations;




●
            hire,
      train and retain qualified personnel to manage and operate our growing
      business and fleet;




●
            improve
      our operating and financial systems and
  controls;




●
            maintain
      or improve our credit control
procedures;




●
            obtain
      and maintain required governmental authorizations, licenses and permits
      for new and existing operations;




●
            provide timely service at
      competitive prices; and




●
            attract
      and retain customers.




5




A
deficiency in any of these factors may negatively impact our ability to generate
cash flow, raise money or effectively manage our growth. In addition,
competition from other companies could reduce our expansion or acquisition
opportunities, cause us to lose business opportunities, competitive advantages
or customers or cause us to pay higher or charge lower prices than we might
otherwise pay or charge. Furthermore, competitive conditions in the markets that
we may consider for future expansion may be more adverse to us than those in
markets served by our existing service centers, and any new markets that we may
service may be less profitable than our existing markets.




If furtheremergencygovernmentalmeasures are implementedin response to the economic
downturn,thatcould have a material adverse impact
on our results of
operations, financial
condition and cash flows




In response to the extraordinary
volatility of the global financial markets and the adverse changes in the global
credit markets, governments have taken highly significant measures in response
to such events, including the enactment of the Emergency Economic Stabilization
Act of 2008 in the United States, and may implement other significant responses
in the future. Securities and futures markets and the credit markets are subject
to comprehensive statutes, regulations and other requirements. The U.S.
Securities and Exchange Commission, or the SEC, other regulators,
self-regulatory organizations and exchanges are authorized to take extraordinary
actions in the event of market emergencies, and may effect changes in law or
interpretations of existing
laws. We cannot predict what, if any, such measures would be, but changes to
securities, tax, environmental, or other laws or regulations, couldhave a material adverse effect on our
results of operations, financial condition or cash flows.




An
inability to obtain financing for our growth or to fund our future capital
expenditures could negatively impact our results of operations and financial
condition




In
order to fund future vessel acquisitions, new markets and products, increased
working capital levels or capital expenditures, we will be required to use cash
from operations, incur borrowings or raise capital through the sale of debt or
additional equity securities. Use of cash from operations for those
purposes would reduce cash available for dividend distributions to you. Our
ability to obtain additional bank financing or to access the capital markets for
any future offerings may be significantly limited by the volatility in the global financial
markets over the last year, and the adverse changes in the global credit
markets. The credit markets
in the United States and elsewhere have experienced significant contraction,
deleveraging and reduced liquidity.  Theseadverse market
conditions and other contingencies and uncertainties are beyond our control. Our
ability to obtain additional bank financing will also depend on our financial
condition, which may be adversely affected by prevailing economic
conditions.




Our
failure to obtain the funds for future vessel acquisitions, new markets,
products or capital expenditures could impact our results of operations
and financial condition. The issuance of additional equity securities would
dilute your interest in our Company and reduce dividends payable to you. Even if
we are successful in obtaining additional bank financing, paying debt service
would limit cash available for working capital and increasing our indebtedness
could have a material adverse effect on our business, results of operations,
cash flows and financial condition.




Business
acquisition opportunities may present increased risks and uncertainties, which
if realized could result in costs that outweigh the financial benefit of such
acquisitions




As
part of our growth strategy, we intend to explore acquisition opportunities of
marine fuel supply and complementary businesses. This expansion could expose us
to additional business and operating risks and uncertainties,
including:




●
            the
      ability to effectively integrate and manage acquired
      businesses;




●
            the
      ability to realize our investment in the acquired
    businesses;




●
            the
      diversion of management's time and attention from other business
      concerns;




●
            the
      risk of entering markets in which we may have no or limited direct prior
      experience;




●
            the
      potential loss of key employees of the acquired
  businesses;




●
            the
      risk that an acquisition could reduce our future earnings;
    and




6




●
            exposure
      to unknown liabilities.




Although
our management will endeavor to evaluate the risks inherent in any particular
transaction, we cannot assure you that we will properly ascertain all such
risks. In the current economic and regulatory climate, it may be especially
difficult to assess the risks involved in a particular transaction, because we
cannot predict what course of action governments and regulatory agencies will
take in response to market volatility and the contracted credit
markets.


In
addition, future acquisitions could result in the incurrence of substantial
additional indebtedness and other expenses. Future acquisitions may also result
in potentially dilutive issuances of equity securities and may affect the market
price of our common shares. Difficulties encountered with acquisitions may have
a material adverse effect on our business, financial condition and results of
operations.


Due
to the lack of diversification in our lines of business, adverse developments in
the marine fuel supply business would negatively impact our results of
operations and financial condition




We
rely primarily on the revenues generated from our business of physical supply
and marketing of refined marine fuel and lubricants to end customers. Due to the
lack of diversification in our lines of business, an adverse development in our
marine fuel supply business would have a significant impact on our business,
financial condition and results of operations.




Because
of the limited supply of secondhand double hull bunkering tankers, we may not be
able to acquire secondhand double hull bunkering tankers on economically
acceptable terms which could impede our growth and negatively impact our results
of operations and  financial condition




Our
ability to grow is in part dependent on our ability to expand our fleet through
acquisitions of suitable secondhand double hull bunkering tankers. We believe
that the availability of secondhand double hull bunkering tankers in the open
market is limited. We may not be able to locate suitable secondhand tankers or
negotiate acceptable purchase contracts with their owners or obtain financing
for such acquisitions on economically acceptable terms. Our failure to locate
and acquire suitable secondhand double hull bunkering tankers could limit the
future growth of our business and have a material impact on our results of
operations and financial condition.




If
we purchase secondhand vessels we will be exposed to increased operating risks
because of the quality of those vessels and the lack of builders' or sellers'
warranty protection




Our
fleet renewal and expansion strategy includes the acquisition of secondhand
vessels as well as newbuildings.  Since December 2006, we have
acquired nine secondhand bunkering vessels, including barges.  Unlike
newbuildings, secondhand vessels typically do not carry warranties with respect
to their condition. Our inspections of secondhand vessels would normally not
provide us with as much knowledge of its condition as we would possess if the
vessel had been built for us and operated by us throughout its life. Repairs and
maintenance costs for secondhand vessels are difficult to predict and may be
more substantial than for vessels we have operated since they were built. These
costs could decrease our profits and reduce our liquidity.




Delays
or defaults by the shipyards in the construction of new vessels could increase
our expenses and diminish our net income and cash flows




We
have entered into newbuilding contracts for the construction of double hull
bunkering tankers; as of the date of this report, we have 19 vessels remaining
to take delivery. These projects are subject to the risk of delay or defaults by
the shipyards caused by, among other things, quality or engineering problems,
work stoppages, weather interference, unanticipated cost increases, delays in
receipt of necessary equipment, and inability to obtain the requisite permits or
approvals. In accordance with industry practice, in the event the shipyards are
unable or unwilling to deliver the tankers, we may not have effective
remedies. Failure to construct or deliver the ships by the shipyards or any
significant delays could increase our expenses and diminish our net income and
cash flows.




7




International
authorities and flag states may delay implementation of the phase-out of single
hull vessels which may lessen the competitive advantage we hope to gain by
acquiring double hull bunkering tankers




Our
strategy involves capitalizing on the phase-out of single hull bunkering
tankers. Under environmental protection laws and regulations, the European
Union, or the EU and the International Maritime Organization, or the IMO (the
United Nations agency for maritime safety), have already banned single hull
vessels of 5,000 dwt and above from carrying HGO, which includes most of the
grades of marine fuel, as of October 2003 and as of April 2005,
respectively, and banned all single hull vessels of less than 5,000 dwt but
above 600 dwt from carrying HGO in 2008. Both the EU and the IMO will also
require a phase-out of all single hull vessels in 2010. The EU and the IMO,
however, allow for exemptions. Under the EU regulations, for example, oil
vessels operated exclusively in ports and inland navigation may be exempted from
the double hull requirements provided they are duly certified under inland water
legislation. Under the IMO regulations, a flag state may allow single hull
vessels conforming to certain technical specifications to continue to operate
until the earlier of 2015 or the 25th anniversary of the vessel's delivery. A
flag state may also allow single hull vessels to carry HGO if the vessels are
either engaged in voyages exclusively within its jurisdiction or jurisdiction of
another party upon such party's agreement.




Our
future success will depend, in part, on the timely and comprehensive
implementation of the phase-out of single hull vessels. Any delay or limitation
in application of the environmental protection laws and regulations could limit
our anticipated growth or other anticipated benefits because our strategy
involves employing and acquiring secondhand double hull bunkering
tankers.




If
we are unable to comply with existing or modified environmental laws and
regulations in the United Kingdom relating to our fuel storage facilities, we
would be exposed to significant compliance costs and liabilities




Our
operations involving the storage of fuel in the United Kingdom are subject to
stringent laws and regulations governing the discharge of materials into the
environment, otherwise relating to protection of the environment, operational
safety and related matters. Compliance with these laws and regulations increases
our overall cost of business in the United Kingdom, including our capital costs
to maintain and upgrade equipment and facilities, or claims for damages to
property or persons resulting from our operations. Failure to comply with these
laws and regulations may result in the assessment of administrative, civil, and
criminal penalties, the imposition of investigatory and remedial liabilities,
and the issuance of injunctions that may restrict or prohibit our United Kingdom
operations or even claims of damages to property or persons resulting from our
United Kingdom operations. The laws and regulations applicable to our United
Kingdom operations are subject to change, and we cannot provide any assurance
that compliance with current and future laws and regulations will not have a
material effect on our results of operations or earnings. A discharge of
hazardous materials into the environment could, to the extent such event is not
insured, subject us to substantial expense, including both the cost to comply
with applicable laws and regulations and liability to private parties for
personal injury or property damage.




We
have a limited history of marketing marine lubricants or operating specialty
tankers and we may not be able to enter, or effectively manage our entry into
these new lines of business, which could negatively impact our results of
operations and  financial condition




We
market our own brand of marine lubricants and recently commenced the operation
of a fleet of product tankers with roll-on roll-off facilities and refueling
capabilities for fuel trucks designed to distribute gasoline and other refined
petroleum products to island economies, which we refer to as specialty tankers.
The marketing of marine lubricants and the acquisition and management of
specialty tankers impose additional responsibilities on our management and
staff. We have limited experience marketing marine lubricants and no experience
in distributing refined petroleum products to island economies nor do we have
any history of operating or competing in these lines of business over
significant periods. As we have a limited history of marketing marine lubricants
and operating specialty tankers, it is difficult to predict our management
needs. Accordingly, we may be required to increase the number of our employees.
We will also have to market our products and services in new locations and to an
expanded customer base. We may not be successful in executing our growth plans
and may incur significant expenses and losses in connection with our future line
of business which could negatively impact our results of operations
and financial condition.




8




Most
of our customers are not obligated to continue to employ us and if some of our
key customers reduce or terminate their purchases our results of operations
would decrease




Generally,
we have not derived a significant amount of revenue from written volume
commitments from our key customers or any other understandings with our key
customers that relate to future purchases. Purchases by our key customers could
be reduced or terminated at any time. A substantial reduction or a termination
of purchases by any of our key customers could decrease our results of
operations.




We
extend trade credit to most of our customers and our financial position and
results of operations may diminish if we are unable to collect accounts
receivable




We
extend trade credit to most of our customers. Our success in attracting business
has been due, in part, to our willingness to extend trade credit on an unsecured
basis to our customers. As of December 31, 2008, 29 of our customers had
outstanding balances with us of at least $1.0 million under the lines of
credit that we have extended to them. Our credit procedures and policies do not
fully eliminate customer credit risk. The recent adverse changes in world credit
markets may cause these numbers to increase if our customers cannot borrow money
and are illiquid. We may not be able to collect on the outstanding balances of
our customers if any of our customers enter bankruptcy proceedings. Losses due
to nonpayment by our customers, if significant, would diminish our financial
position and results of operations.




We
depend on a limited number of suppliers, which makes us susceptible to supply
shortages or price fluctuations that could diminish our operating
results




We
currently purchase refined marine petroleum products from a limited number of
suppliers. If our relationship with any of our key suppliers terminates or if
any of our key suppliers suffers a disruption in production, we may not be able
to obtain a sufficient quantity of refined marine fuel and lubricants on
acceptable terms and without interruption in our business.  We may
experience difficulties and delays in obtaining marine fuel from alternative
sources of supply. Any interruption or delay in the supply of marine fuel, or
the inability to obtain fuel from alternate sources at acceptable prices and
within a reasonable amount of time, would impair our ability to meet scheduled
deliveries to our customers and could cause customers to cancel orders, which
would weaken our financial condition and reduce our results of
operations.




The
refined marine fuel that we purchase from our suppliers may fail to meet the
specifications that we have agreed to supply to our customers and, as a result,
we could lose business from those customers and be subject to claims or other
liabilities




If
the refined marine fuel that we purchase from our suppliers fails to meet the
specifications we have agreed to supply to our customers, we could lose our
customers and be subject to claims or other liabilities. Although we carry
insurance policies to protect us against most of the risks involved in the
conduct of our business and in most cases we have recourse against our suppliers
for marine fuel which fails to meet agreed specifications, our insurance
coverage may not be adequate and such recourse cannot be assured.  The
loss of customers and increased liabilities would reduce our earnings and could
have a material adverse effect on our business, weaken our financial condition
and reduce our results of operations.




If
Aegean Oil or other third-party physical suppliers fail to provide services to
us and our customers as agreed we would be subject to customer
claims, which could negatively affect our business and results of
operations




We
have contracted with Aegean Oil to employ our specialty tanker, Maistros, and to
provide various services to our customers in Greece, including fueling of
vessels in port and at sea. Aegean Oil is a related company owned and controlled
by members of Mr. Melisanidis' family. Mr. Melisanidis, our founder and
Head of Corporate Development, may also be deemed a control person of Aegean Oil
and other affiliated entities for United States securities law purposes, but
Mr. Melisanidis disclaims such control. In connection with our limited
marine fuel trading activities, from time to time we contract with other
third-party physical suppliers to deliver marine fuel to our customers in
markets where we do not have service centers. The failure of Aegean Oil or any
other third-party physical supplier to perform these services in accordance with
the terms we have agreed with them and our customers could affect our
relationships with our customers and subject us to claims and other liabilities
which could harm our business or negatively affect our financial results. If
Aegean Oil or any of the other third-party physical suppliers fails to perform
its obligations to us, you will not have any recourse directly against Aegean
Oil or the other third-party physical suppliers.




9






Agreements
between us, Aegean Oil and other affiliated entities may be more favorable or
less favorable than agreements that we could obtain from unaffiliated third
parties




The
marine fuel service supply agreement, the contract of affreightment and other
agreements we have with Aegean Oil, our largest supplier of marine petroleum
products, as well as other agreements we have with affiliated entities have been
made in the context of an affiliated relationship. Aegean Oil and other
affiliated entities are owned and controlled by members of Mr. Melisanidis'
family. Mr. Melisanidis has also been involved historically with our
related companies and had a leadership role with respect to the promotion of
their products and services. Because immediately prior to the completion of our
initial public offering we were majority-owned by Leveret
International Inc., or Leveret, a company controlled by
Mr. Melisanidis, the negotiation of the marine fuel service supply
agreement and our other contractual arrangements may have resulted in prices and
other terms that are more favorable or less favorable to us than terms we might
have obtained in arm's-length negotiations with unaffiliated third parties for
similar services. Moreover, Aegean Oil and other affiliated entities remain our
related companies, and we remain subject to similar risks in future business
dealings with these parties.




If
we increase our marine fuel inventory we will be more vulnerable to price
fluctuations, which may result in the reduced value of our inventory and cause
us to suffer financial loss




Due
to the nature of our business, we may increase the volume of our marine fuel
inventories. Depending upon the price and price movement of refined marine fuel,
our marine fuel inventories may subject us to a risk of financial loss. Pricing
terms with our suppliers and customers and hedges by way of oil futures or other
instruments, should we enter into them, may not adequately protect us in the
event of a substantial downward movement in the price of marine
fuel.




Our
business and our customers' businesses are vulnerable to currency exchange
fluctuations, which could negatively affect our results of operations and cash
flows and reduce our profitability




Generally,
in all our service centers, we invoice our customers for the sale and delivery
of marine petroleum products in U.S. dollars. Many of our customers are foreign
customers and may be required to obtain U.S. dollars to pay for our products and
services. A rapid depreciation or devaluation in a currency affecting our
customers could have an adverse effect on our customers' operations and their
ability to convert local currency to U.S. dollars to make required payments to
us. This would in turn result in credit losses for us, which would reduce our
results of operations and cash flows.




We
generate almost all of our revenues and incur the majority of our expenses in
U.S. dollars. In the year ended December 31, 2008, we incurred not more
than 2% of our operating expenses and general and administrative expenses in
currencies other than the U.S. dollar—primarily the Euro, the British Pound, the
UAE dirham, the Gibraltar pound, the Jamaican dollar and the Singapore dollar.
Changes in the rates of exchange between these currencies and the U.S. dollar
would lead to deviations from our budgeted operating expenses, which would
affect our financial results. When translated into U.S. dollars, expenses
incurred in currencies other than the U.S. dollar increase when the value of the
U.S. dollar falls, which reduces our profitability.




We
rely on the expertise of our senior management and our inability to retain key
personnel could interrupt our business and limit our growth




Our
success depends to a significant degree upon the abilities and efforts of our
management team and our ability to hire and retain key members of our management
team. The loss of any of these individuals could adversely affect our business
prospects and financial condition. Difficulty in hiring and retaining key
personnel could negatively impact our results of operations and financial
condition. We do not intend to maintain "key man" life insurance on any of our
officers or our board members, including Peter C. Georgiopoulos, the
Chairman of our board of directors, and Mr. Melisanidis, our founder and Head of
Corporate Development. We believe that Mr. Georgiopoulos is an important
member of our board of directors and Mr. Melisanidis is an important member
of our management team and that the loss of the services or involvement in our
business on the part of either or both of them would have a material adverse
effect on our Company. We have entered into employment agreements with
Mr. Melisanidis, E. Nikolas Tavlarios, our President and Spyros
Gianniotis, our Chief Financial Officer.




10




As
we expand our fleet, we may not be able to recruit suitable employees and crew
for our tankers, which may limit our growth and cause our financial performance
to suffer




As
we expand our fleet, we will need to recruit suitable crew, shoreside,
administrative and management personnel. We may not be able to continue to hire
suitable employees as we expand our fleet of tankers. If we are unable to
recruit suitable employees and crews, we may not be able to provide our services
to customers, our growth may be limited and our financial performance may
suffer.




A
portion of our employees are covered by national collective bargaining
agreements, which set minimum standards for employment, and any industrial
action or other labor unrest could disrupt our business




A
portion of our employees from Greece and from the Philippines are covered by
national collective bargaining agreements which set minimum standards for
employment. Industrial action or other labor unrest, such as the dockworkers
strike in Piraeus, Greece that affected port operations in 2007, could
disrupt our business. If not resolved in a timely and cost-effective manner,
such industrial action or other labor unrest could prevent or hinder our
operations from being carried out normally and could disrupt our business and
reduce our results of operations and cash flows.




We
are a holding company, and we depend primarily on the ability of our operating
subsidiaries to distribute funds to us in order to satisfy our financial and
other obligations and to make dividend payments




We
are a holding company, and we have no significant assets other than the equity
interests in our subsidiaries. As a result, our ability to satisfy our financial
and other obligations and to pay dividends depends primarily on the performance
of our operating subsidiaries and their ability to distribute funds to us. If we
are unable to obtain funds from our operating subsidiaries, we will not be able
to pay dividends unless we obtain funds from other sources. We may not be able
to obtain the necessary funds from other sources on terms acceptable to
us.




Restrictive
covenants in our senior secured credit facility impose financial and other
restrictions that limit our corporate activities, which could negatively affect
our growth and cause our financial performance to suffer




In
February 2009, we entered into a senior secured credit facility with an
international commercial bank, which we call our senior secured credit facility.
Our senior secured credit facility contains covenants that impose operating and
financing restrictions on us. Such restrictions affect, and in many respects
limit or prohibit, among other things, our ability to pay dividends, incur
additional indebtedness, create liens, sell assets, or engage in mergers or
acquisitions. These restrictions could limit our ability to plan for or react to
market conditions or meet extraordinary capital needs or otherwise restrict
corporate activities. These restrictions could adversely affect our ability to
finance our future operations or capital needs or to engage in other business
activities which will be in our interest.




We
may not achieve sufficient earnings to pay dividends to our
shareholders




We currently intend to pay regular cash
dividends on a quarterly basis. We will make such dividend payments to our
shareholders only if our board of directors, acting in its sole discretion,
determines that payments of dividends would be in our best interest and in
compliance with relevant legal and contractual requirements. The principal
business factors that our board of directors expects to consider when
determining the timing and amount of dividend payments will be our earnings,
financial condition and cash requirements at the time.




U.S.
investors in our Company could suffer adverse tax consequences if we are
characterized as a passive foreign investment company




If,
for any taxable year, our passive income or our assets that produce or are held
for production of passive income exceed levels provided by law, we may be
characterized as a passive foreign investment company, or PFIC, for U.S. federal
income tax purposes. This characterization could result in adverse U.S. tax
consequences to our U.S. shareholders. If we are classified as a PFIC, a U.S.
Holder of our common shares could be subject to increased tax liability upon the
sale or other disposition of our common shares or upon the receipt of amounts
treated as "excess distributions." Under these rules, the excess distribution
and any gain upon a sale would be allocated ratably over the U.S. Holder's
holding period for the common shares, and the amount allocated to the current
taxable year and any taxable year prior to the first taxable year in which we
were a PFIC would be taxed as ordinary income in the current taxable year. The
amounts allocated to each of the other taxable years would be subject to tax at
the highest marginal rates on ordinary income in effect for the applicable class
of taxpayer for that year, and an interest charge for the deemed tax deferral
benefit would be imposed on the resulting tax liability as if such tax liability
had been due with respect to each such other taxable year. The tax liability
with respect to the amount allocated to years prior to the year of the
disposition or distribution cannot be offset by any net operating losses. In
addition, holders of shares in a PFIC may not receive a "step-up" in basis on
shares acquired from a decedent. U.S. Holders should consult with their own U.S.
tax advisors with respect to the U.S. tax consequences of investing in our
common shares as well as the specific application of the "excess distribution"
and other rules discussed in this paragraph. For a discussion of how we might be
characterized as a PFIC and related tax consequences, please see Taxation —
"United States Federal Income Taxation of U.S. Holders—Passive Foreign
Investment Company."




11






We
may not be exempt from Liberian taxation which would materially reduce our net
income and cash flow




The
Republic of Liberia enacted a revised income tax act effective as of
January 1, 2001, or the New Act. In contrast to the income tax law
previously in effect since 1977, or the Prior Law, which the New Act repealed in
its entirety, the New Act does not distinguish between the taxation of a
non-resident Liberian corporation, such as our Liberian subsidiary, Aegean
Marine Petroleum S.A., or AMP, which conducts no business in Liberia and was
wholly exempted from tax under the Prior Law, and the taxation of ordinary
resident Liberian corporations.




In
2004, the Liberian Ministry of Finance issued regulations pursuant to which a
non-resident domestic corporation, such as our Liberian subsidiary, AMP, will
not be subject to tax under the New Act retroactive to January 1, 2001, or
the New Regulations. In addition, the Liberian Ministry of Justice issued an
opinion that the New Regulations were a valid exercise of the regulatory
authority of the Ministry of Finance. Therefore, assuming that the New
Regulations are valid, AMP will be wholly exempt from Liberian income tax as
under the Prior Law.




If
our Liberian subsidiary, AMP, were to be subject to Liberian income tax under
the New Act, it would be subject to tax at a rate of 35% on its worldwide
income. As a result, its, and consequently our, net income and cash flow would
be materially reduced by the amount of the applicable tax. In addition, we, as
shareholder of the Liberian subsidiary, would be subject to Liberian withholding
tax on dividends paid by AMP at rates ranging from 15% to 20%.




If
we become subject to tax in the jurisdictions in which we operate, our net
income and cash flow would decrease




Our
business is affected by taxes imposed on the purchase and sale of refined marine
petroleum products in various jurisdictions in which we operate from time to
time. These taxes include sales, excise, goods and services taxes, value-added
taxes, and other taxes. We currently do not pay a material amount of tax,
including withholding taxes, in any jurisdiction in which we operate. As a
result of changes in our operations, tax laws or the application by tax
authorities of these laws or our failure to comply with tax laws or otherwise,
we may become liable for an increased amount of tax in any jurisdiction. An
increased liability for taxes would decrease our net income and cash
flow.




Our
insurance policies may not be adequate to cover our losses and because we obtain
some of our insurance policies through protection and indemnity associations, we
may be subject to calls in amounts based not only on our own claim records, but
also the claim records of other members of the protection and indemnity
associations which could expose us to additional expenses




We
carry insurance policies to protect us against most of the accident-related
risks involved in the conduct of our business, including marine hull and
machinery insurance, protection and indemnity insurance, which includes
pollution risks, crew insurance, and war risk insurance. We may not be
adequately insured to cover losses from our operational risks. Additionally, our
insurers may refuse to pay particular claims and our insurance policies may be
voidable by the insurers if we take, or fail to take, certain action, such as
failing to maintain certification of our vessels with applicable maritime
regulatory organizations. Any significant uninsured or under-insured loss or
liability could have a material adverse effect on our business, results of
operations, cash flows and financial condition. In addition, we may not be able
to obtain adequate insurance coverage at reasonable rates in the future during
adverse insurance market conditions.




As
a result of the September 11, 2001 attacks, the United States response to
the attacks and related concerns regarding terrorism, insurers have increased
premiums and reduced or restricted coverage for losses caused by terrorist acts
generally. Accordingly, premiums payable for terrorist coverage have increased
substantially and the level of terrorist coverage has been significantly
reduced.




We
may also be subject to calls or premiums in amounts based not only on our claim
records but also the claim records of other members of the protection and
indemnity associations through which we receive insurance coverage for tort
liability, including pollution-related liability. Our payment of these calls
could result in significant expense to us, which could have a material adverse
effect on our results of operations, cash flows and financial condition.
Moreover, the protection and indemnity associations and other insurance
providers reserve the right to make changes in insurance coverage with little or
no advance notice.


12






Maritime
claimants could arrest our vessels, which could disrupt our cash
flow




Crew
members, suppliers of goods and services to a vessel and other parties may be
entitled to a maritime lien against that vessel for unsatisfied debts, claims or
damages. In many jurisdictions, a maritime lien holder may enforce its lien by
arresting a vessel through foreclosure proceedings. The arrest or attachment of
one or more of our vessels could interrupt our cash flows and require us to pay
a significant amount of money to have the arrest lifted. In addition, in some
jurisdictions under the "sister ship" theory of liability, a claimant may arrest
both the vessel that is subject to the claimant's maritime lien and any
"associated" vessel, which is any vessel owned or controlled by the same owner.
Claimants could try to assert "sister ship" liability against one vessel in our
fleet for claims relating to another vessel in our fleet.




Terrorist
attacks, piracy, and international hostilities have previously affected the
shipping industry, and any future attacks could negatively impact our results of
operations and financial condition




Terrorist
attacks, such as the attack on the MT Limburg in
October 2002, could adversely affect our operations. We conduct our marine
fuel supply operations outside of the United States, and our business, results
of operations, cash flows and financial condition could suffer by changing
economic, political and government conditions in the countries and regions where
our vessels are employed or registered. Moreover, we operate in a sector of the
economy that is likely to be adversely impacted by the effects of political
instability, terrorist or other attacks, war, piracy, or international
hostilities.




Our
principal shareholders control our Company and may not act in the best interests
of our other shareholders




Our
principal shareholders, Leveret, a company controlled by Mr. Melisanidis,
and Peter C. Georgiopoulos, the Chairman of our board of directors, currently
own 35.1% and 9.9% of our outstanding common shares, respectively.  On
July 19, 2006, Leveret and AMPNInvest LLC, or AMPNInvest, a Marshall
Islands limited liability company that has been succeeded by Messrs.
Georgiopoulos and John Tavlarios, entered into a Framework Agreement, as
amended, which affects our management and governance. We refer you to the
discussion in the section of this report entitled "Directors, Senior Management
and Employees—Framework Agreement" for a description of the Framework Agreement.
Pursuant to the Framework Agreement, Leveret and AMPNInvest agreed to identify,
mutually agree on and elect seven members to serve on our board of directors
effective upon the closing of our initial public offering, which took place on
December 13, 2006. The Framework Agreement also provides that Leveret and
Messrs. Georgiopoulos and Tavlarios, as successors to AMPNInvest, will vote in
favor of our board of directors, including the independent directors and the
nominees of our board, and in accordance with our board's recommendations on all
matters proposed for a vote or consent of our shareholders for the duration of
the Framework Agreement. The Framework Agreement expires on December 13, 2011,
the fifth anniversary of the completion of our initial public offering, unless
terminated earlier pursuant to its provisions. Accordingly both
Mr. Melisanidis, through Leveret, and Messrs. Georgiopoulos and
Tavlarios may be deemed to control our Company. Leveret and Messrs.
Georgiopoulos and Tavlarios may serve their own interests, which may not be
aligned with the interests of other shareholders when voting in favor of our
board of directors, including its nominees, or in accordance with our board's
recommendations on all matters proposed for a vote or consent of our
shareholders.




Neither
our Company nor our shareholders will be able to enforce the Framework
Agreement




The
Framework Agreement between AMPNInvest and Leveret does not name any third-party
beneficiaries. Leveret and Messrs. Georgiopoulos and John Tavlarios, as
successors to AMPNInvest, are free to mutually terminate the Framework Agreement
at any time. Upon termination, Leveret and Messrs. Georgiopoulos and Tavlarios
will be free to vote for nominees not approved by our board of directors and on
matters proposed for a vote or consent of the shareholders in a manner not
recommended by our board. Alternatively, if either party breaches
the Framework Agreement, our Company and its shareholders will not be able to
enforce the Framework Agreement. We refer you to the discussion in the section
of this report entitled "Directors, Senior Management and Employees—Framework
Agreement" for a description of the Framework Agreement. In addition, Leveret
and Messrs. Georgiopoulos and Tavlarios who together own 47.7% of our
outstanding common shares are obligated to vote in favor of our board of
directors, including its nominees, and in accordance with our board's
recommendations on all matters proposed for a vote or consent of our
shareholders even if a majority of the other shareholders vote
otherwise.




13




Mr. Melisanidis,
through Leveret, may continue to be able to exercise effective control over our
Company and may have conflicts of interest with our other
shareholders




Leveret,
a company controlled by Mr. Melisanidis, owns 35.1% of our outstanding common
shares. For so long as Leveret is controlled by Mr. Melisanidis and owns a
significant percentage of our outstanding common shares, Mr. Melisanidis
may be able to exercise effective control over us and will be able to strongly
influence the outcome of shareholder votes on other matters, including the
adoption or amendment of provisions in our articles of incorporation or bylaws
and approval of possible mergers, amalgamations, control transactions and other
significant corporate transactions. This concentration of ownership may have the
effect of delaying, deferring or preventing a change in control, merger,
amalgamations, consolidation, takeover or other business combination. This
concentration of ownership could also discourage a potential acquirer from
making a tender offer or otherwise attempting to obtain control of us, which
could in turn have an adverse effect on the market price of our common
shares.




Mr. Melisanidis,
through Leveret, may not necessarily act in accordance with the best interests
of other shareholders. Moreover, Mr. Melisanidis and members of
Mr. Melisanidis' family hold significant interest in our related companies.
For further discussion, please refer to the section of this report entitled
"Major Shareholders and Related Party Transactions." We cannot assure you that
the interests of Mr. Melisanidis will coincide with the interests of other
holders of our common stock. To the extent that conflicts of interests may
arise, Mr. Melisanidis, through Leveret, may vote in a manner adverse to us
or to you or other holders of our securities.




We
have entered into an employment agreement with Mr. Melisanidis. The
employment agreement restricts Mr. Melisanidis' ability to compete with us
during the term of the employment agreement and 12 months following its
termination. If we are unable to enforce such restrictions on
Mr. Melisanidis against competing with us, any direct or indirect
competition from Mr. Melisanidis could be particularly damaging to
us.




Some
of our directors are affiliated with other companies, which could result in
conflicts of interest that may not be resolved in our favor




Some
of our directors also serve as directors of other public companies and are
employees or have investments in companies in industries related to ours. In
particular, Mr. Georgiopoulos, the Chairman of our board of directors, is
Chairman of the board of directors of General Maritime Corporation, or General
Maritime, and Genco Shipping & Trading Limited. Also, John Tavlarios
and George Konomos, who serve as our directors, are also  directors of
General Maritime. Mr. Tavlarios is also an executive officer of General
Maritime. As such, General Maritime may be deemed one of our affiliates for
United States securities laws purposes. To the extent that the other entities
with which our directors may be affiliated compete with us for business
opportunities, prospects or financial resources, or participate in ventures in
which we may participate, our directors may face actual or apparent conflicts of
interest in connection with decisions that could have different implications for
us and the other companies. These decisions may relate to corporate
opportunities, corporate strategies, potential acquisitions of businesses,
intercompany agreements, competition, the issuance or disposition of securities,
the election of new or additional directors and other matters. Such potential
conflicts may delay or limit the opportunities available to us, and it is
possible that conflicts may be resolved in a manner adverse to us.






Our
status as a foreign private issuer exempts us from certain of the corporate
governance standards of the New York Stock Exchange, limiting the protections
afforded to investors






We
are a "foreign private issuer" within the meaning of the New York Stock Exchange
corporate governance standards. Under the New York Stock Exchange rules, a
foreign private issuer may elect to comply with the practice of its home country
and not to comply with certain New York Stock Exchange corporate governance
requirements, including the requirements that:




●
            a
      majority of the board of directors consists of independent
      directors;




●
              both
      a nominating and corporate governance and a compensation committee be
      established and composed entirely of independent directors and each
      committee has a written charter addressing its purpose and
      responsibilities;
  ●
              an
      annual performance evaluation of the nominating and corporate governance
      and compensation committees be
undertaken;


14




●
            non-management
      directors meet in regular executive sessions without members of management
      in attendance;




●
            a
      company has corporate governance guidelines or a code of ethics;
      and




●
            an
      audit committee consists of a minimum of three independent
      directors.




We
voluntarily comply with most of the New York Stock Exchange rules. However,
investors will not have the same protections afforded to shareholders of
companies that are subject to all New York Stock Exchange corporate governance
requirements.




Anti-takeover
provisions in our organizational documents could have the effect of
discouraging, delaying or preventing a merger, amalgamation or acquisition,
which could reduce the market price of our common shares




Several
provisions of our articles of incorporation and our bylaws could make it
difficult for our shareholders to change the composition of our board of
directors in any one year, preventing them from changing the composition of
management. In addition, the same provisions may discourage, delay or prevent a
merger or acquisition that shareholders may consider favorable.




These
provisions include:




●
            authorizing
      our board of directors to issue "blank check" preferred stock without
      shareholder approval;




●
            providing
      for a classified board of directors with staggered, three-year
      terms;




●
            prohibiting
      cumulative voting in the election of
directors;




●
            authorizing
      the removal of directors only for cause and only upon the affirmative vote
      of the holders of at least 70% of the outstanding shares of our capital
      stock entitled to vote for the
directors;




●
            prohibiting
      shareholder action by written consent unless the written consent is signed
      by all shareholders entitled to vote on the
  action;




●
            limiting
      the persons who may call special meetings of shareholders;
    and




●
            establishing
      advance notice requirements for nominations for election to our board of
      directors or for proposing matters that can be acted on by shareholders at
      shareholder meetings.




In
addition, we may implement a shareholder rights plan that will make it more
difficult for a third party to acquire us without the support of our board of
directors and principal shareholders. These anti-takeover provisions could
substantially impede the ability of public shareholders to benefit from a change
in control and, as a result, may reduce the market price of our common stock and
your ability to realize any potential change of control premium.




We
are incorporated in the Marshall Islands, which does not have a well-developed
body of corporate law and shareholders may have difficulty protecting their
interests




Our
corporate affairs are governed by our articles of incorporation and bylaws and
by the Marshall Islands Business Corporations Act, or the BCA. The provisions of
the BCA resemble provisions of the corporation laws of a number of states in the
United States. However, there have been few judicial cases in the Marshall
Islands interpreting the BCA. The rights and fiduciary responsibilities of
directors under the law of the Republic of the Marshall Islands are not as
clearly established as the rights and fiduciary responsibilities of directors
under statutes or judicial precedent in the United States. The rights of
shareholders of companies incorporated in the Marshall Islands may differ from
the rights of shareholders of companies incorporated in the United States. The
BCA provides
that it is to be interpreted according to the laws of the State of Delaware and
other states with substantially similar legislative provisions. However, there
have been few, if any, court cases interpreting the BCA in the Marshall Islands
and we cannot predict whether Marshall Islands courts would reach the same
conclusions as United States courts. Thus, you may have more difficulty
protecting your interests in the face of actions by the management, directors or
controlling shareholders than would shareholders of a corporation incorporated
in a United States jurisdiction which has developed a relatively more
substantial body of case law.




15


Risk
Factors Relating to Our Industry




Adverse
economic conditions in the shipping industry may reduce the demand for our
products and services and negatively affect our results of operations and
financial condition




Our
business is focused on the physical supply and marketing of refined marine fuel
and marine lubricants to the shipping industry. The shipping industry has been
materially adversely affected by current economic conditions, with recent
charterhire rates reaching all time lows in certain sectors. Adverse economic
conditions in the shipping industry may have an adverse effect on our customers,
which may reduce the demand for our products and services and negatively affect
our results of operations and financial condition.




In
addition, any political instability, terrorist activity, piracy activity or
military action that disrupts shipping operations will adversely affect our
customers. Any adverse conditions in the shipping industry may reduce the demand
for our products and services and negatively affect our results of operations
and financial condition.





Material
disruptions in the availability or supply of oil may reduce the supply of our
products and have a material impact on our operating results, revenues and
costs




The
success of our business depends on our ability to purchase, sell and deliver
marine petroleum products to our customers. Material disruptions in the
availability or supply of oil may have an adverse effect on our suppliers. In
addition, any political instability, natural disasters, terrorist activity,
piracy, military action or other similar conditions may disrupt the availability
or supply of oil and consequently decrease the supply of refined marine fuel.
Decreased availability or supply of marine fuel may reduce our operating
results, revenues and results of operations.




Changes
in the market price of petroleum may increase our credit losses, reduce our
liquidity and decrease our profitability




The recent decline in the price of oil
and gas may negatively affect our business. A rapid decline in fuel
prices could decrease our profitability because if we were to purchase inventory
when fuel prices are high without having a corresponding sales contract in
place, we may not be able to resell it at a profit. Conversely, increases in
fuel prices can adversely affect our customers' businesses, and consequently
increase our credit losses. Increases in fuel prices could also affect the
credit limits extended to us by our suppliers and our working capital
requirements, potentially affecting our liquidity and profitability. In
addition, increases in oil prices will make it more difficult for our customers
to operate and could reduce demand for our services.




In
the highly competitive marine fuel supply industry, we may not be able to
successfully compete for customers with new entrants or established companies
with greater resources, which would negatively affect our financial condition
and our ability to expand our business




We
are subject to aggressive competition in all aspects of our business. Our
competitors are numerous, ranging from large multinational corporations, which
have significantly greater capital resources than us, to relatively small and
specialized firms. In addition to competing with fuel resellers, such as World
Fuel Services Corporation and Chemoil Corporation, we also compete with the
major oil producers that market fuel directly to large commercial shipping
companies. We may not be able to successfully compete for customers because of
increased competition from the major oil producers, or our suppliers who may
choose to market directly to large as well as smaller shipping companies, or to
provide less advantageous price and credit terms to us. Also, due in part to the
highly fragmented market, competitors with greater resources could enter the
marine fuel supply industry and operate larger fleets of bunkering tankers
through consolidations or acquisitions and may be able to offer better terms
than we are able to offer to our customers.




16







Our
operations are subject to extensive environmental laws and regulations, the
violation of which could result in liabilities, fines or penalties and changes
of which may require increased capital expenditures and other costs necessary to
operate and maintain our vessels




We
are subject to various environmental laws and regulations dealing with the
handling of fuel and fuel products. We currently store fuel inventories on our
bunkering tankers and storage facilities and we may, in the future, maintain
fuel inventories at several other locations in fixed or floating storage
facilities. Our operations involve the risks of fuel spillage or seepage,
environmental damage, and hazardous waste disposal, among other things. If we
are involved in a spill or other accident involving hazardous substances, if
there are releases of fuel and fuel products we own, or if we are found to be in
violation of environmental laws or regulations, we could be subject to
liabilities that could have a materially adverse effect on our business and
operating results. We are also subject to possible claims by customers,
employees and others who may be injured by a fuel spill, exposure to fuel, or
other accidents. If we should fail to comply with applicable environmental
regulations, we could be subject to substantial fines or penalties and to civil
or criminal liability.




In
particular, our operations are subject to numerous laws and regulations in the
form of international conventions, national, state and local laws and national
and international regulations in force in the jurisdictions in which our vessels
operate or are registered, which can significantly affect the ownership and
operation of our vessels. These regulations include, but are not limited to,
(i) the International Convention on Civil Liability for Oil Pollution
Damage of 1969, (ii) the International Convention for the Prevention of
Marine Pollution from Ships of 1973 and (iii) the International Convention
for the Safety of Life at Sea of 1974. We refer you to the discussion in the
section of this report entitled "Business—Environmental and Other Regulations"
for a description of environmental laws and regulations that affect our
business.




A
failure to comply with applicable laws and regulations may result in
administrative and civil penalties, criminal sanctions or the suspension or
termination of our operations. Some environmental laws often impose strict
liability for remediation of spills and releases of oil and hazardous
substances, which could subject us to liability without regard to whether we
were negligent or at fault. An oil spill could result in significant liability,
including fines, penalties, criminal liability and remediation costs for natural
resource damages as well as third-party damages. We are required to satisfy
insurance and financial responsibility requirements for potential oil (including
marine fuel) spills and other pollution incidents. Our insurance policies
covering certain environmental risks may not be sufficient to cover all such
risks and any claim may have a material adverse effect on our business, results
of operations, cash flows and financial condition.




Compliance
with applicable laws, regulations and standards, may require us to make
additional capital expenditures for the installation of costly equipment or
operational changes and may affect the resale value or useful lives of our
vessels. In order to satisfy these requirements, we may, from time to time, be
required to take our vessels out of service for extended periods of time, with
corresponding losses of revenues. We may also incur additional costs in order to
comply with other existing and future regulatory obligations, including costs
relating to air emissions, maintenance and inspection, elimination of tin-based
paint, development and implementation of emergency procedures and insurance
coverage or other financial assurance of our ability to address pollution
incidents. These costs could reduce our results of operations and cash flows
and weaken our financial condition. Also, in the future, market conditions
may not justify these expenditures or enable us to operate some or all of our
vessels profitably during the remainder of their economic lives.




Our
vessel operations have inherent risks that could negatively impact our results
of operations and financial condition




Our
vessels and fuel oils that they carry are at risk of being damaged or lost
because of events such as marine disasters, bad weather, mechanical failures,
human error, war, terrorism, piracy and other circumstances or events. All these
hazards can result in death or injury to persons, loss of revenues or property,
environmental damage, higher insurance rates, damage to our customer
relationships, delays or rerouting.




If
our vessels suffer damage, they may need to be repaired. The costs of vessel
repairs are unpredictable and can be substantial. We may have to pay repair
costs that our insurance policies do not cover. The loss of earnings while these
vessels are being repaired, as well as the actual cost of these repairs, would
decrease our results of operations. If one of our vessels were involved in an
accident with the potential risk of environmental contamination,
the resulting media coverage could have a material adverse effect on our
business, our results of operations and cash flows and weaken our financial
condition.




17




Our
share price may continue to be highly volatile, which could lead to a further
loss of all or part of an investor's investment




Over
the last year, the stock market has experienced extreme price and volume
fluctuations. This volatility has often been unrelated to the operating
performance of particular companies. The market price of our common shares
fluctuated substantially during 2008, with a high of $40.69 and a low of $7.93.
If the volatility in the market continues or worsens, it could have a further
adverse affect on the market price of our common shares, regardless of our
operating performance.




The
market price of our common is due to a variety of factors,
including:




●
            fluctuations
      in interest rates;




●
            fluctuations
      in the availability or the price of
oil;




●
            fluctuations
      in foreign currency exchange rates;




●
            announcements
      by us or our competitors;




●
            changes
      in our relationships with customers or
  suppliers;




●
            changes
      in governmental regulation of the fuel
industry;




●
            changes
      in United States or foreign tax
laws;




●
            actual
      or anticipated fluctuations in our operating results from period to
      period;




●
            changes
      in financial estimates or recommendations by securities
      analysts;




●
            changes
      in accounting principles;




●
            a
      general or industry-specific decline in the demand for, and price of,
      shares of our common stock resulting from capital market conditions
      independent of our operating
performance;




●
            the
      loss of any of our key management personnel;
and




●
            our
      failure to successfully implement our business
  plan.




Future
sales of our common shares could cause the market price of our common shares to
decline




The
market price of our common shares could decline due to sales, or the
announcements of proposed sales, of a large number of common shares in the
market, including sales of common shares by our large shareholders, or the
perception that these sales could occur. These sales, or the perception that
these sales could occur, could also make it more difficult or impossible for us
to sell equity securities in the future at a time and price that we deem
appropriate to raise funds through future offerings of common
shares.






ITEM
      4.
            INFORMATION
      ON THE COMPANY




A.           History
and Development of the Company




Aegean
Marine Petroleum Network Inc. is a Marshall Islands holding company
incorporated on June 6, 2005 under the Marshall Islands Business
Corporations Act, or the BCA.  On September 29, 2005, Leveret
International Inc., our then sole shareholder, contributed direct and indirect
ownership of companies that conduct our business operations.  Prior to
our initial public offering we had 28,035,000 shares of our common stock
outstanding. On December 13, 2006, we consummated our initial public offering of
additional 14,375,000 shares of common stock, which we refer to as the initial
public offering.




We
maintain our principal marketing and operating offices at 42 Hatzikyriakou
Avenue, Piraeus 185 38 Athens, Greece. Our telephone number at that address is
011 30 (210) 458-6200. We also have an executive office to oversee our financial
and other reporting functions in New York City at 299 Park Avenue, New York, New
York 10171.  Our telephone number at that address is (212)
763-5665.




18




B.           Business
Overview




We
are an independent physical supplier and marketer of refined marine fuel and
lubricants.  We procure marine fuel from refineries, major oil
producers, and resell to a diversified customer base, representing all segments
of the shipping industry, including tankers, container ships, drybulk carriers,
cruise ships, reefers, LNG/LPG, car carriers, ferries, and marine fuel traders
and brokers.  We serve the following markets: Greece, Gibraltar, the
United Arab Emirates, Jamaica, Singapore, Northern Europe, Portland (U.K.), West
Africa, Vancouver, Montreal and Mexico. We are one of the largest owners and
operators of bunkering vessels.  As of March 31, 2009, we own a fleet
of 33 bunkering vessels, 28 of which are double-hull.




We
provide our customers with a service that requires sophisticated logistical
operations designed to meet their strict fuel quality and delivery scheduling
needs. We believe that our extensive experience, management systems and
proprietary software systems allow us to meet our customers' specific
requirements when they purchase and take delivery of marine fuels and lubricants
around the world; this together with the capital intensive nature of our
industry, and the limited available shipyard capacity for new vessel
construction represent a significant barrier to the entry of competitors. We
have devoted our efforts to building a global brand, and believe that our
customers recognize our brand as representing high quality service and products
at each of our locations around the world.  We manage our technical
ship operations in-house, which helps us maintain high levels of customer
service.




We
intend to continue expanding our business and marine fuel delivery capabilities.
In January 2008 and April 2008, we commenced operations in West Africa and in
the United Kingdom, respectively.  In July 2008, we acquired
Canada-based marketer and physical supplier, ICS Petroleum, with operations in
Vancouver, Montreal, and Mexico.  We expect to commence operations in
Tangiers, Morocco and Trinidad and Tobago in the second quarter of
2009.




As
we increase our global presence, we plan to expand our fleet by at least 19 new
double hull bunkering tankers, for which we have firm orders, during the next
two years, and may purchase additional secondhand vessels in the
future.




In
addition to expanding our bunkering tanker fleet, we have taken delivery of two
new double hull petroleum products tankers with roll-on roll-off facilities and
refueling capabilities for fuel trucks for the distribution of gasoline and
other refined petroleum products in island economies, which we call specialty
tankers. We view this business as complementary to our bunkering business,
involving relatively complex customer requirements and requiring significant
investment in management and software systems.




In
certain markets, we have deployed floating storage facilities which enable us to
maintain more efficient refueling operations, have more reliable access to a
supply of bunker fuel, and deliver a higher quality service to our customers. We
own two double hull Panamax tankers, Fos and Ouranos, with a cargo-carrying
capacity of approximately 68,000 dwt each, which we use as floating storage
facilities in Ghana and the United Arab Emirates, respectively. We also own one
double hull Aframax tanker, Leader, with a cargo-carrying capacity of
approximately 82,000 dwt, which we have positioned in Gibraltar for use as a
floating storage facility.  In Jamaica, we use our 5,000 dwt tanker,
Aegean IX, as a floating storage facility.




In
addition to our bunkering operations, we market and distribute marine lubricants
under the Alfa Marine Lubricants brand. Alfa Marine Lubricants are currently
available in most of our markets.  We view this business as
complimentary to our business of marketing and delivery marine
fuel.  In February 2009, we entered into an agreement to join the
Sealub Alliance Network, a group recently formed by Gulf Oil Marine Ltd. to
collaborate in the marketing and distribution of marine lubricants.




Our
Service Centers




Greece




We
currently service our customers through our related company, Aegean Oil, in
Piraeus, Patras, and other parts of Greece. Aegean Oil has a license, which we,
as a non-Greek company, are not qualified to obtain, to operate as a physical
supplier of refined marine petroleum products in Greece. For the year ended
December 31, 2008, our sales of marine fuel in Greece amounted to approximately
695.8 thousand metric tons. We currently operate eight double hull bunkering
tankers in Greece.




19






We
purchase our fuel from Hellenic Refinery (ELPE) and Motor Oil Hellas. We compete
here against seven other physical suppliers: Eko-Elda Abee., Sekavin S.A., Seka
S.A., Jet Oil S.A., Eteka S.A., and Gallon Oil S.A.




In
addition to Piraeus and Patras, Aegean Oil has a license to operate as a
physical supplier of refined marine petroleum products in all ports in Greece,
including Thessaloniki and Crete. As we expand our business, we may elect to
service our customers in other Greek ports and seek a larger share of the total
Greek market for supply of marine petroleum products.




We
support our operations in Greece from our office in Piraeus, which we
lease.




Gibraltar




We
possess a license issued by the Bunkering Superintendent of the Port of
Gibraltar to act as a physical supplier of marine petroleum products in
Gibraltar. For the year ended December 31, 2008, our sales of marine fuel in
Gibraltar amounted to approximately 1,008.9 thousand metric tons.  We
currently operate four double hull bunkering tankers in Gibraltar.




We
purchase our fuel in Gibraltar from a variety of different suppliers including
Repsol S.A. and Lia Oil S.A. We store our fuel in our floating storage facility,
the double hull Aframax tanker, Leader. We currently compete here against four
other physical suppliers, CESPA (Gibraltar) Ltd., Vemaoil
Company Ltd., Bominflot of Gibraltar Ltd., and Peninsula
Petroleum Ltd.




We
support our bunkering operations from our office in Gibraltar, which we
lease.




United
Arab Emirates




We possess a license issued by Sharjah
Economic Development Department to act as a physical supplier of marine
petroleum products in the port area of Fujairah. For the year ended December 31,
2008, our sales of marine fuel in Fujairah amounted to approximately 988.0
thousand metric tons.  We currently operate four double hull bunkering
tankers in the UAE.




We
purchase our fuel in Fujairah from a variety of different suppliers including
FAL Energy Co. Ltd., which also engages in supply operations in the port,
Vitol, and ENOC. We store our fuel in our floating storage facility, the double
hull Panamax tanker, Ouranos.  We compete here against other physical
suppliers, including ENOC Bunkering (Fujairah) LLC, Akron Trade and Transport,
International Supply, and Oil Marketing & Trading Inc., and
Chemoil.




We
support our bunkering operations from two offices in Fujairah and Kohr Fakkan,
which we lease.




Jamaica




We
are authorized by the Port Authority of Jamaica to act as a physical supplier of
marine petroleum products in Jamaica. We service our customers in the ports of
Kingston and Ocho Rios, Jamaica, and may elect to service our customers in other
locations in Jamaica. For the year ended December 31, 2008, our sales of marine
fuel in Jamaica amounted to approximately 522.2 thousand metric
tons.  We operate two double hull tankers and one single hull
bunkering tanker in Jamaica.




In
Jamaica, we have a long-term contract to purchase our fuel from the state
refinery, Petrojam Limited, which also engages in limited supply operations
within the port. We store our fuel in our floating storage facility,
the single hull tanker, Aegean IX.




We
support our bunkering operations from our office in Kingston, which we
lease.




Singapore




We possess a license issued by the
Maritime and Port Authority of Singapore to act as a physical supplier of marine
petroleum products in the port of Singapore. For the year ended December 31,
2008, our sales of marine fuel in Singapore amounted to approximately 1,128.4
thousand metric tons.  We operate five double hull bunkering tankers
in Singapore.




We
purchase our fuel in Singapore from a variety of different suppliers including
BP Singapore Pte. Ltd., Chemoil, Conoco-Phillips, Shell Singapore, Kuo Oil,
and ExxonMobil. We compete here against other physical suppliers, including
major oil producers, Global Energy Trading Pte. Ltd., Alliance Oil Trading,
Searights Maritime Services Pte. Ltd., Equatorial Marine Fuel and Sentek Marine
& Trading.




We
support our bunkering operations from our office in Singapore, which we
lease.




20




Northern
Europe




We
possess a license issued by the Belgian Federal Ministry of Finance to trade and
supply marine petroleum products offshore and in ports. We deliver fuel offshore
and service over 45 ports located throughout Northern Europe, including the
North and Irish Sea, the French Atlantic, the English Channel and St. George
Channel. For the year ended December 31, 2008, our sales of marine fuel in
Northern Europe amounted to 278.5 thousand metric tons.  We operate
three double hull bunkering tankers in Northern Europe.




We
purchase our fuel in Northern Europe from a variety of different suppliers,
including Total Belgium and Verbeke Netherlands. We are not aware of any other
physical suppliers in Northern Europe with significant operations offshore. When
we conduct our operations in ports, we compete here against other physical
suppliers, including Chemoil Europe BV, BP, Total, and ExxonMobil.




We
support our offshore bunkering operations in Northern Europe from our office in
Antwerp, Belgium, which we lease.




West
Africa




We
possess a license from Ghana's National Petroleum Authority to act as a physical
supplier of marine petroleum products both off the coast and in the ports of
Ghana. We commenced physical supply operation in January, 2008 and for the year
ended December 31, 2008, our sales of marine fuel in West Africa amounted to
approximately 174.5 thousand metric tons. We operate one double hull and two
single hull bunkering tankers in West Africa. We are not aware of any other
competing physical suppliers of marine petroleum products in Ghana.




We
purchase our fuel in West Africa from a variety of different suppliers,
including Traffigura Ltd. and OVLAS Trading S.A., and store it in our floating
storage facility, the double hull Panamax tanker, Fos.  We compete
here against other physical suppliers, including OW Bunkering and Addax
Bunkering Services.




We
support our bunkering operations from our office in Accra, Ghana, which we
lease.




United
Kingdom




We
own a marine fuel terminal infrastructure located in Portland Harbor. Our
terminal is located near the southern access of the North Sea Sulphur Emission
Control Area (SECA) and provides convenient access for commercial vessels to
refuel. We store our marine fuel in land-based storage tanks, which we lease
from Portland Port Limited. We commenced bunkering and terminal operations in
April 2008 and for the year ended December 31, 2008, our sales of marine fuel,
including low sulphur marine fuels, amounted to 114.2 thousand metric
tons.  We operate one double hull bunkering tanker and own a special
purpose vessel in the United Kingdom.




We
purchase our fuel in the United Kingdom from a variety of different suppliers
including Total and Statoil. We compete here against other physical suppliers,
including WFS (Falmouth).




We
support our terminal and bunkering operations from our office in Portland
(U.K.), which we lease.




Vancouver




We
trade and supply marine petroleum products off the coast and in the port of
Vancouver.  For the year ended December 31, 2008, our sales of marine
fuel in the port of Vancouver area amounted to 157.0 thousand metric tons; this
represents sales since July 1, 2008, the closing of our acquisition of
 ICS Petroleum.  We operate two single hull bunkering barges in
the port of Vancouver.




We
purchase our fuel in Vancouver from a variety of different suppliers, including
Esso (Imperial Oil), which also engages in supply operations in the
port.  We compete here against other physical suppliers, including
major oil producers, Marine Petrobulk Ltd., Shell Canada, and Petro
Canada.




We
support our bunkering operations here from our office in Vancouver, which we
lease.




21


Sales
and Marketing
  Most
of our marketing, sales, ship-management and other related functions are
performed at our main offices in Piraeus, Greece. We also market products and
services from our offices in New York City, Miami, and Singapore. Following our
acquisition of ICS Petroleum Ltd. on July 1, 2008, we market products and
services to Canadian and Mexican
markets from our offices in Vancouver and Montreal, Canada.  Our sales
force interacts with our established customers and markets our fuel sales and
services to large commercial shipping companies and foreign governments. We
believe our level of customer service, years of experience in the industry, and
reputation for reliability are significant factors in retaining our customers
and attracting new customers. Our sales and marketing approach is designed to
create awareness of the benefits and advantages of our fuel sales and services.
We are active in industry trade shows and other available public
forums.




Administrative
Offices




Cyprus




We
maintain an administrative office in Cyprus, which we lease. Our office in
Cyprus is responsible for, among other things, certain invoicing functions of
our principal operating subsidiary, AMP.




New
York City




We
maintain an executive office in New York City to oversee our financial and other
reporting functions.




Customers




We
market marine fuel and related services to a broad and diversified base of
customers. During the years ended December 31, 2006, 2007, and 2008, none
of our customers accounted for more than 10% of our total
revenues.  Our customers serviced during the past three years, include
Greek-owned commercial shipping companies such as Capital Maritime &
Trading Corp., Neptune Line Shipping and ENESEL S.A., other international
shipping companies such as A.P. Moller and Royal Carribean Cruises Ltd.,
marine fuel traders and brokers such as World Fuel Services Corporation and oil
majors, such as Exxon Mobil Corporation.




Suppliers




We
purchase our marine fuel and lubricants from refineries, oil majors or other
select suppliers around the world. In the year ended December 31, 2008, we
purchased marine petroleum products of approximately $351.5 million, or
approximately 13.5% of our total purchases of marine petroleum products from our
related company, Aegean Oil. The majority of our purchases of marine petroleum
products during the year ended December 31, 2008, were made from unrelated
third-party suppliers and totaled $2,242.9 million, or approximately 86.5% of
our total purchases of marine petroleum products.  Our cost of fuel is
generally tied to spot pricing, market-based formulas or is governmentally
controlled. We are usually extended trade credit from our suppliers for our fuel
purchases, which is generally required to be secured by standby letters of
credit or letters of guarantee.




Competition




We
compete with marine fuel traders and brokers such as World Fuel Services
Corporation, Chemoil Corporation and major oil producers, such as BP Marine,
Shell Marine Products and ExxonMobil Marine Fuel, for services and end
customers. We also compete with physical suppliers of marine fuel products such
as CESPA (Gibraltar) Ltd. and Fujairah National Bunkering Co. LLC for
business from traders and brokers as well as end customers. Our competitors
include both large corporations and small, specialized firms. Some of our
competitors are larger than we are and have substantially greater financial and
other resources than we do. Some of our suppliers also compete against
us.


22





Environmental
and Other Regulations
  Government
regulations and laws significantly affect the ownership and operation of our
tankers and marine fuel facilities.  We are subject to various
international conventions, laws and regulations in force in the countries in
which our fuel facilities are located, and where our vessels may operate or are
registered.  Compliance with such laws, regulations and other
requirements entails significant expense, including vessel modification and
implementation of certain operating procedures.
 
 A
variety of government, quasi-governmental and private organizations subject our
tankers to both scheduled and unscheduled inspections.  These
organizations include the local port authorities, national authorities, harbor
masters or equivalent, classification societies, flag state and charterers,
particularly terminal operators and oil companies.  Some of these
entities require us to obtain permits, licenses and certificates for the
operation of our tankers and marine fuel facilities.  Our failure to
maintain necessary permits or approvals could require us to incur substantial
costs or temporarily suspend operation of our marine fuel terminal or one or
more of the vessels in our fleet.




We
believe that the heightened levels of environmental and quality concerns among
insurance underwriters, regulators and charterers have led to greater inspection
and safety requirements on all vessels and may accelerate the scrapping of older
vessels throughout the industry.  Increasing environmental concerns
have created a demand for tankers that conform to the stricter environmental
standards.  We are required to maintain operating standards for all of
our vessels emphasizing operational safety, quality maintenance, continuous
training of our officers and crews and compliance with applicable local,
national and international environmental laws and regulations.  We
believe that the operation of our vessels will be in substantial compliance with
applicable environmental laws and regulations and that our vessels have all
material permits, licenses, certificates or other authorizations necessary for
the conduct of our operations; however, because such laws and regulations are
frequently changed and may impose increasingly stricter requirements, we cannot
predict the ultimate cost of complying with these requirements, or the impact of
these requirements on the resale value or useful lives of our
tankers.  In addition, a future serious marine incident that results
in significant oil pollution or otherwise causes significant adverse
environmental impact could result in additional legislation or regulation that
could negatively affect our profitability.




International
Maritime Organization




The
International Maritime Organization, or the IMO (the United Nations agency for
maritime safety and the prevention of pollution by ships), has adopted the
International Convention for the Prevention of Marine Pollution from Ships,
1973, as modified by the Protocol of 1978 relating thereto, which has been
updated through various amendments, or the MARPOL Convention. The MARPOL
Convention implements environmental standards including oil leakage or spilling,
garbage management, as well as the handling and disposal of noxious liquids,
harmful substances in packaged forms, sewage and air emissions.




In
April 2001, the IMO adopted regulations under the MARPOL Convention, which
became effective in September 2002, requiring the phase-out of most single hull
oil tankers by 2015 or earlier, depending on the age of the tanker and whether
it has segregated ballast tanks.  Under the regulations, the flag
state may allow for some newer single hull ships registered in its country that
conform to certain technical specifications to continue operating until the 25th
anniversary of their delivery. Any port state, however, may deny entry of those
single hull tankers that are allowed to operate until their 25th anniversary to
ports or offshore terminals. These regulations have been adopted by over 150
nations, including many of the jurisdictions in which our tankers
operate.





As
a result of the oil spill in November 2002 relating to the loss of the
MT Prestige, which was
owned by a company not affiliated with us, in December 2003, the Marine
Environmental Protection Committee of the IMO, or MEPC, adopted an amendment to
the MARPOL Convention, which became effective in April 2005. The amendment
revised an existing regulation 13G accelerating the phase-out of single hull oil
tankers and adopted a new regulation 13H on the prevention of oil pollution from
oil tankers when carrying heavy grade oil. Under the revised regulation, single
hull oil tankers were required to be phased out no later than April 5, 2005 or
the anniversary of the date of delivery of the ship on the date or in the year
specified in the following table:


23





Category
      of Oil Tankers
                
                Date
      or Year for Phase OutCategory 1—oil tankers
      of 20,000 dwt and above carrying crude oil, fuel oil, heavy diesel oil or
      lubricating oil as cargo, and of 30,000 dwt and above carrying other oils,
      which do not comply with the requirements for protectively located
      segregated ballast tanks
                
                April
      5, 2005 for ships delivered on April 5, 1982 or earlier; or
                  2005
      for ships delivered after April 5, 1982Category 2—oil tankers
      of 20,000 dwt and above carrying crude oil, fuel oil, heavy diesel oil or
      lubricating oil as cargo, and of 30,000 dwt and above carrying other oils,
      which do comply with the protectively located segregated ballast tank
      requirements
                  and
                  Category 3—oil tankers
      of 5,000 dwt and above but less than the tonnage specified for
      Category 1 and 2 tankers.
                
                April
      5, 2005 for ships delivered on April 5, 1977 or earlier
                  2005
      for ships delivered after April 5, 1977 but before January 1,
      1978
                  2006
      for ships delivered in 1978 and 1979
                  2007
      for ships delivered in 1980 and 1981
                  2008
      for ships delivered in 1982
                  2009
      for ships delivered in 1983
                  2010
      for ships delivered in 1984 or later


Under
the revised regulations, a flag state may permit continued operation of certain
Category 2 or 3 tankers beyond their phase-out date in accordance with the above
schedule.  Under regulation 13G, the flag state may allow for some
newer single hull oil tankers registered in its country that conform to certain
technical specifications to continue operating until the earlier of the
anniversary of the date of delivery of the vessel in 2015 or the 25th
anniversary of their delivery.  Under regulations 13G and 13H, as
described below, certain Category 2 and 3 tankers fitted only with double
bottoms or double sides may be allowed by the flag state to continue operations
until their 25th anniversary of delivery.  Any port state, however,
may deny entry of those single hull oil tankers that are allowed to operate
under any of the flag state exemptions.





In
October 2004, the MEPC adopted a unified interpretation of regulation 13G that
clarified the delivery date for converted tankers. Under the interpretation,
where an oil tanker has undergone a major conversion that has resulted in the
replacement of the fore-body, including the entire cargo carrying section, the
major conversion completion date shall be deemed to be the date of delivery of
the ship, provided that:





●
            the
      oil tanker conversion was completed before July 6,
  1996;




●
            the
      conversion included the replacement of the entire cargo section and
      fore-body and the tanker complies with all the relevant provisions of
      MARPOL Convention applicable at the date of completion of the major
      conversion; and




●
            the
      original delivery date of the oil tanker will apply when considering the
      15 years of age threshold relating to the first technical specifications
      survey to be completed in accordance with MARPOL
    Convention.




In
December 2003 the MEPC adopted a new regulation 13H on the prevention of
oil pollution from oil tankers when carrying heavy grade oil, or HGO, which
includes most of the grades of marine fuel. The new regulation bans the carriage
of HGO in single hull oil tankers of 5,000 dwt and above after April 5, 2005,
and in single hull oil tankers of 600 dwt and above but less than 5,000 dwt, no
later than the anniversary of their delivery in 2008.




Under
regulation 13H, HGO means any of the following:




●
            crude
      oils having a density at 15oC higher than 900 kg/m3;




●
            fuel
      oils having either a density at 15oC higher than 900 kg/m3 or
      a kinematic viscosity at 50oC higher than 180 mm2/s;
      or




24




●
            bitumen,
      tar and their emulsions.




Under
regulation 13H, the flag state may allow continued operation of oil tankers of
5,000 dwt and above carrying crude oil with a density at 15oC higher than 900
kg/m3 but
lower than 945 kg/m3, that
conform to certain technical specifications and if, in the opinion of the flag
state, the ship is fit to continue such operation, having regard to the size,
age, operational area and structural conditions of the ship and provided that
the continued operation shall not go beyond the date on which the ship reaches
25 years after the date of its delivery.  The flag state may also
allow continued operation of a single hull oil tanker of 600 dwt and above but
less than 5,000 dwt carrying HGO as cargo if, in the opinion of the flag state,
the ship is fit to continue such operation, having regard to the size, age,
operational area and structural conditions of the ship, provided that the
operation shall not go beyond the date on which the ship reaches 25 years after
the date of its delivery.





The
flag state may also exempt an oil tanker of 600dwt and above carrying HGO as
cargo if the ship is either engaged in voyages exclusively within an area under
its jurisdiction, or is engaged in voyages exclusively within an area under the
jurisdiction of another party, provided the party within whose jurisdiction the
ship will be operating agrees. The same applies to vessels operating as floating
storage units of HGO.





Any
port state, however, can deny entry of single hull tankers carrying HGO, which
have been allowed to continue operation under the exemptions mentioned above,
into the port or offshore terminals under its jurisdiction or deny ship-to-ship
transfer of HGO in areas under its jurisdiction, except when this is necessary
for the purpose of securing the safety of a ship or saving life at
sea.





Revised
Annex I to the MARPOL Convention entered into force in January 2007. Revised
Annex I incorporates various amendments adopted since the MARPOL Convention
entered into force in 1983, including the amendments to regulation 13G
(regulation 20 in the revised Annex) and regulation 13H (regulation 21 in the
revised Annex). Revised Annex I also imposes construction requirements for oil
tankers delivered on or after January 1, 2010. A further amendment to revised
Annex I includes an amendment to the definition of HGO that will broaden the
scope of regulation 21. On August 1, 2007, regulation 12A (an amendment to Annex
I) came into force requiring oil fuel tanks to be located inside the double hull
in all ships with an aggregate oil fuel capacity of 600m3 and
above which are delivered on or after August 1, 2010, including ships for which
the building contract is entered into on or after August 1, 2007 or, in the
absence of a contract, for which the keel is laid on or after February 1,
2008.




Air
Emissions





In
September 1997, the IMO adopted Annex VI to the MARPOL Convention to
address air pollution from ships.  Effective in May 2005,  Annex
VI sets limits on sulfur oxide and nitrogen oxide emissions from all commercial
vessel exhausts and prohibits deliberate emissions of ozone depleting substances
(such as halons chlorofluorocarbons), emissions of volatile compounds from cargo
tanks, and the shipboard incineration of specific substances.  Annex
VI also includes a global cap on the sulfur content of fuel oil and allows for
special areas to be established with more stringent controls on sulfur
emissions.  We believe that all our vessels are currently compliant in
all material respects with these regulations.  Additional or new
conventions, laws and regulations may be adopted that could require the
installation of expensive emission control systems and that could adversely
affect our business, cash flows, results of operations and financial
condition.




In
October 2008, the IMO adopted amendments to Annex VI regarding particulate
matter, nitrogen oxide and sulfur oxide emission standards which are expected to
enter into force on July 1, 2010.  The amended Annex VI would reduce
air pollution from vessels by, among other things, (i) implementing a
progressive reduction of sulfur oxide, emissions from ships, with the global
sulfur cap reduced initially to 3.50% (from the current cap of 4.50%), effective
from January 1, 2012, then progressively to 0.50%, effective from January 1,
2020, subject to a feasibility review to be completed no later than 2018; and
(ii) establishing new tiers of stringent nitrogen oxide emissions standards for
new marine engines, depending on their date of installation.  Once
these amendments become effective, we may incur costs to comply with these
revised standards.




25




Safety
Requirements




The
IMO has also adopted the International Convention for the Safety of Life at Sea,
or SOLAS Convention, and the International Convention on Load Lines, 1966, or LL
Convention, which impose a variety of standards to regulate design and
operational features of ships. SOLAS Convention and LL Convention standards are
revised periodically. We believe that all our vessels are in substantial
compliance with SOLAS Convention and LL Convention standards.




Under
Chapter IX of SOLAS, the requirements contained in the International Safety
Management Code for the Safe Operation of Ships and for Pollution Prevention, or
the ISM Code, promulgated by the IMO, also affect our operations.  The
ISM Code requires the party with operational control of a vessel to develop an
extensive safety management system that includes, among other
things,  the adoption of a safety and environmental protection policy
setting forth instructions and procedures for operating its vessels safely and
describing procedures for responding to emergencies.




The
ISM Code requires that vessel managers or operators obtain a safety management
certificate for each vessel they operate.  This certificate evidences
compliance by a vessel's management with ISM Code requirements for a safety
management system.  No vessel can obtain a safety management
certificate unless its manager has been awarded a document of compliance, issued
by each flag state, under the ISM Code.  We have all material
requisite documents of compliance for our offices and safety management
certificates for vessels in our fleet for which the certificates are required by
the IMO. We are required to renew these documents of compliance and safety
management certificates annually.




Non-compliance
with the ISM Code and other IMO regulations may subject the shipowner or
bareboat charterer to increased liability, may lead to decreases in available
insurance coverage for affected vessels and may result in the denial of access
to, or detention in, some ports.  The U.S. Coast Guard and European
Union, or EU, authorities have indicated that vessels not in compliance with the
ISM Code by the applicable deadlines will be prohibited from trading in U.S. and
EU ports, as the case may be.




Oil Pollution
Liability




Many
countries have ratified and follow the liability plan adopted by the IMO and set
out in the International Convention on Civil Liability for Oil Pollution Damage
of 1969, as amended in 2000, or the CLC. Under this convention and depending on
whether the country in which the damage results is a party to the CLC, a
vessel's registered owner is strictly liable for pollution damage caused in the
territorial waters of a contracting state by discharge of persistent oil,
subject to certain complete defenses. The limits on liability outlined in the
1992 Protocol use the International Monetary Fund currency unit of Special
Drawing Rights, or SDR. Under an amendment to the 1992 Protocol that became
effective on November 1, 2003 for vessels of 5,000 to 140,000 gross tons (a unit
of measurement for the total enclosed spaces within a vessel), liability will be
limited to approximately 4.51 million SDR plus 631 SDR for each additional gross
ton over 5,000. For vessels over 140,000 gross tons, liability will be limited
to 89.77 million SDR. The exchange rate between SDRs and U.S. dollars was
0.685387 SDR per U.S. dollar on March 9, 2008. The right to limit liability is
forfeited under the CLC where the spill is caused by the owner's actual fault
and under the 1992 Protocol where the spill is caused by the owner's intentional
or reckless conduct. Vessels trading to states that are parties to these
conventions must provide evidence of insurance covering the liability of the
owner. In jurisdictions where the CLC has not been adopted various legislative
schemes or common law govern, and liability is imposed either on the basis of
fault or in a manner similar to that of the CLC. We believe that our insurance
will cover the liability under the plan adopted by the IMO.




In
2001, the IMO adopted the International Convention on Civil Liability for Bunker
Oil Pollution Damage, or the Bunker Convention, which imposes strict liability
on ship owners for pollution damage in jurisdictional waters of ratifying states
caused by discharges of bunker fuel. The Bunker Convention requires registered
owners of ships over 1,000 gross tons to maintain insurance for pollution damage
in an amount equal to the limits of liability under the applicable national or
international limitation regime (but not exceeding the amount calculated in
accordance with
the Convention on Limitation of Liability for Maritime Claims of 1976, as
amended). The Bunker Convention has been ratified by a sufficient number of
nations for entry into force, and became effective on November 21,
2008.




26




The
IMO has negotiated international conventions that impose liability for oil
pollution in international waters and a signatory's territorial waters.
Additional or new conventions, laws and regulations may be adopted which could
limit our ability to do business and which could have a material adverse effect
on our business and results of operations.




European
Union Restrictions




In
July 2003, in response to the MT Prestige oil spill in
November 2002, the European Union adopted legislation, which was amended in
October 2003, that prohibits all single hull tankers from entering into its
ports or offshore terminals by 2010 or earlier, depending on their
age.  The European Union has also already banned all single hull
tankers carrying heavy grades of oil from entering or leaving its ports or
offshore terminals or anchoring in areas under its
jurisdiction.  Commencing in 2005, certain single hull tankers above
15 years of age will also be restricted from entering or leaving European
Union ports or offshore terminals and anchoring in areas under European Union
jurisdiction.




The European Union is also considering
legislation that would: (i) ban manifestly sub-standard vessels (defined as
those over 15 years old that have been detained by port authorities at least
twice in a six-month period) from European waters and create an obligation of
port states to inspect vessels posing a high risk to maritime safety or the
marine environment and (ii) provide the European Union with greater authority
and control over classification societies, including the ability to seek to
suspend or revoke the authority of negligent societies. It is impossible to
predict what legislation or additional regulations, if any, may be promulgated
by the European Union or any other country or authority.





In
2005, the European Union adopted a directive on ship-source pollution, imposing
criminal sanctions for intentional, reckless or negligent pollution discharges
by ships.  The directive could result in criminal liability for
pollution from vessels in waters of EU countries that adopt implementing
legislation.  Criminal liability for pollution may result in
substantial penalties or fines and increased civil liability
claims.




United
Kingdom




Our
marine fuel terminal operations involving the storage of fuel in the United
Kingdom are subject to stringent laws and regulations governing the discharge of
materials into the environment, otherwise relating to protection of the
environment, operational safety and related matters. In particular, we are
subject to the Environmental Protection Act 1990, or EPA, which governs
pollution of water, land and air due to release of substances causing harm to
living organisms and the Water Resources Act 1991 (as amended by the Environment
Act 1995), or WRA, which is designed to protects the water environment. In
addition, the Pollution Prevention and Control (England and Wales) Regulations
2000, or the Regulations, implement integrated pollution prevention and control
regimes. These regulations cover pollution of water, land and air due to
emissions which may be harmful to the environment or may result in damage to
property or environment.




Under
EPA, WRA and the Regulations, we may be subject, among other things, to
administrative, civil and criminal penalties, the imposition of investigatory
and remedial remedies and issuance of injunctions that may restrict or prohibit
our United Kingdom operations or even claims of damages to property or persons
resulting from our operations.




In
addition, general health and safety regulations are applicable to our terminals
to ensure the safety of our premises and related structures.




We
believe that the operations of our marine fuel terminal are in substantial
compliance with applicable United Kingdom environmental laws and regulations,
and that we have all material permits, licenses, certificates and other
authorizations necessary for the conduct of our operations. The laws and
regulations are subject to change and we cannot provide any assurance that
compliance with current and future laws will not have a material effect on our
operations in the United Kingdom.




27




Vessel
Security Regulations




Since
the terrorist attacks of September 11, 2001, there have been a variety of
initiatives intended to enhance vessel security. In December 2002,
amendments to SOLAS created a new chapter of the convention dealing specifically
with maritime security. The new chapter became effective in July 2004 and
imposes various detailed security obligations on vessels and port authorities,
most of which are contained in the International Ship and Port Facility Security
Code, or the ISPS Code. The ISPS Code is designed to protect ports and
international shipping against terrorism. After July 1, 2004, to trade
internationally, a vessel must attain an International Ship Security Certificate
from a recognized security organization approved by the vessel's flag state.
Among the various requirements are:




●
            on-board
      installation of ship security alert systems, which do not sound on the
      vessel but only alerts the authorities on
shore;




●
            the
      development of vessel security
plans;




●
            ship
      identification number to be permanently marked on a vessel's
      hull;




●
            a
      continuous synopsis record kept onboard showing a vessel's history
      including, the name of the ship and of the state whose flag the ship is
      entitled to fly, the date on which the ship was registered with that
      state, the ship's identification number, the port at which the ship is
      registered and the name of the registered owner(s) and their registered
      address; and




●
            compliance
      with flag state security certification
  requirements.




We
have implemented the various security measures addressed by SOLAS and the ISPS
Code, and our fleet is in compliance with applicable security
requirements.





Inspection
by Classification Societies




Our
tankers have been certified as being "in-class" by Lloyds Register of Shipping
Germanischer Lloyd, American Bureau of Shipping, Det Norske Veritas and Bureau
Veritas, all of which are members of the International Association of
Classification Societies. Generally, the regulations of vessel registries
accepted by international lenders in the shipping industry require that an
oceangoing vessel's hull and machinery be evaluated by a classification society
authorized by the country of registry. The classification society certifies that
the vessel has been built and maintained in accordance with the rules of the
classification society and complies with applicable rules and regulations of the
vessel's country of registry and the international conventions of which that
country is a member. Each vessel is inspected by a surveyor of the
classification society in three surveys of varying frequency and thoroughness:
every year for the annual survey, every two to three years for intermediate
surveys and every four to five years for special surveys. Should any defects be
found, the classification surveyor generally issues a notation or recommendation
for appropriate repairs, which have to be made by the shipowner within the time
limit prescribed. Vessels may be required, as part of the annual and
intermediate survey process, to be drydocked for inspection of the underwater
portions of the vessel and for necessary repair stemming from the inspection.
Special surveys always require drydocking.




Risk
of Loss and Insurance Coverage




General




The
operation of any tanker vessel involves risks such as mechanical failure,
physical damage, collision, property loss, inventory loss or damage and business
interruption due to political circumstances in foreign countries, hostilities
and labor strikes. In addition, there is always an inherent possibility of
marine disaster, including oil spills and other environmental mishaps, and the
liabilities arising from owning and operating vessels in international trade.
While we believe that our present insurance coverage is adequate, not all risks
can be insured against, and there can be no guarantee that any specific claim
will be paid, or that we will always be able to obtain adequate insurance
coverage at reasonable rates.




28




Hull
and Machinery and War Risk Insurance




We
have obtained marine hull and machinery and war risk insurance policies, which
provide coverage for the risk of actual or constructive total loss, for all our
vessels. Each of our vessels is covered for up to its fair market
value.




We
have also obtained increased value insurance policies for most of our vessels.
Under the increased value insurance, we will be able to recover the sum insured
under the policy in addition to the sum insured under our hull and machinery
policy in the event of the total loss of the vessel. Increased value insurance
policies also cover excess liabilities that are not recoverable in full by the
hull and machinery policies by reason of under-insurance.




Protection
and Indemnity Insurance




Protection
and indemnity insurance policies, which cover our third-party liabilities in
connection with our shipping activities, are provided by mutual protection and
indemnity associations, or P&I Associations. These insurance policies cover
third-party liability and other related expenses of injury or death of crew,
passengers and other third parties, loss or damage to cargo, claims arising from
collisions with other vessels, damage to other third-party property, pollution
arising from oil or other substances, and salvage, towing and other related
costs, including wreck removal. Protection and indemnity insurance policies are
a form of mutual indemnity insurance policies, extended by protection and
indemnity mutual associations, or "clubs." Subject to the "capping" of exposure
discussed below, our coverage, except for pollution, is unlimited.




Our
current protection and indemnity insurance coverage for pollution is up to
$1.0 billion per vessel per incident. The 14 P&I Associations that
compose the International Group insure approximately 90% of the world's
commercial tonnage and have entered into a pooling agreement to reinsure each
association's liabilities. Each P&I Association has capped its exposure to
this pooling agreement at $4.5 billion. As a member of a P&I
Association that is a member of the International Group, we are subject to calls
payable to the associations based on our claim records as well as the claim
records of all other members of the individual associations, and members of the
International Group.




Trademarks
and Licenses




We
have entered into a trademark license agreement with Aegean Oil pursuant to
which Aegean Oil granted us a non-transferable, non-exclusive, perpetual
(subject to termination for material breach), world-wide, royalty-free right and
license to use certain trademarks related to the Aegean logo and "Aegean Marine
Petroleum" in connection with marine fuel supply services.




Seasonality




Our
business is not seasonal.




Legal
Proceedings




In
the ordinary course of business, we may be subject to legal proceedings and
claims for damages or penalties relating to, among other things, personal
injury, property casualty and environmental contamination. We expect that these
claims will be covered by our insurance policies, subject to customary
deductibles. Those claims, even if lacking merit, could result in the
expenditure of significant financial and managerial resources.




On
November 30, 2005, an unrelated third party initiated a civil lawsuit in
the Court of First Instance in Piraeus against us seeking a payment of
approximately $10.0 million and legal expenses. The suit alleges that the
plaintiff was instrumental in negotiation of our fuel purchase agreement and is
entitled to the commissions of $1 per ton of marine petroleum sold in Jamaica
during a 12-year period beginning on March 1, 2005. In 2007, the Court of
First Instance ruled that the claim is maritime-related and not within its
jurisdiction. Accordingly, the claim was referred to the Maritime Disputes
Division of the Court of First Instance in Piraeus.  In December 2008,
the court dismissed the plaintiff's lawsuit. On
February 26, 2009, the plaintiff commenced against us and Mr. Melisanidis a new
civil law suit in the Commercial Court of Paris, France, seeking a payment of
approximately $1.8 million of alleged commissions and $0.4 million of
compensatory damages.  After an initial hearing that was held on March
31, 2009, the court has scheduled a hearing in the case for May 5,
2009.  Although it is not possible to predict the outcome of this
litigation, based on the facts known to us, we believe that this litigation will
not have a material adverse effect on our financial position or results of
operations.


In
the fourth quarter of 2007, we purchased Portland Bunkers International Ltd.,
the owner of a bunker supply facility in Portland, which is on the southern
coast of England, at which we planned to commence operations during the first
quarter of 2008.  In February 2008, World Fuel Services Europe
Limited, or WFS, the operator of a bunker facility in Falmouth, which is also on
the southern coast of England, commenced an action in the English High Court,
claiming, among other things, that the Company had received confidential
information from certain WFS employees which gave the Company a "head start" in
commencing operations in Portland.  On February 26, 2008, the
High Court granted WFS a preliminary injunction which prohibited the Company
from dealing with certain customers in the Portland operation until March 31,
2008.  The case was settled before trial and we commenced operations
in Portland on April 1, 2008.




29




C.           Organizational
Structure




Aegean
Marine Petroleum Network Inc. is a Marshall Islands holding company and we
transact our bunkering business primarily through Aegean Marine Petroleum S.A.,
or AMP, a wholly-owned subsidiary incorporated in Liberia and operate our
service centers through Aegean Bunkering Gibraltar Ltd., Aegean Bunkering
Jamaica Ltd., Aegean Bunkering (Singapore) Pte. Ltd., Aegean Bunkering
(Ghana) Limited, Bunkers at Sea NV, ICS Petroleum Ltd., and Portland Bunkers
International Limited, separate wholly-owned subsidiaries incorporated in
Gibraltar, Jamaica, Singapore, Ghana, Belgium, British Columbia (Canada) and
under the laws of England and Wales, respectively, and Aegean Marine Petroleum
LLC, a controlled subsidiary incorporated in the United Arab Emirates, which is
51% owned by a local nominee. We provide the management of our bunkering tankers
through Aegean Bunkering Services Inc., or ABS, a wholly-owned subsidiary
incorporated in the Marshall Islands, and Aegean Management Services M.C., a
wholly owned-subsidiary incorporated in Greece. We provide the marketing and
administrative services for our operations through Aegean Oil (USA), LLC and
AMPN USA, LLC, our wholly-owned subsidiaries formed in Delaware, the U.S, and
I.C.S. Petroleum (Montreal) Ltd., our wholly-owned subsidiary incorporated in
Canada. We hold certain of our subsidiaries through Aegean Holdings S.A. and
Aegean Investments S.A., our wholly-owned subsidiaries incorporated in the
Marshall Islands, and hold our vessel-owning subsidiaries through Aegean
Shipholdings Inc., a wholly-owned subsidiary incorporated in the Marshall
Islands.




Currently,
we own our vessels through separate wholly-owned subsidiaries listed in the
following table:




Vessel-owning
      Subsidiary
              Country of
      Incorporation
              Vessel
      Name or
                Hull
      NumberAegean Rose Maritime Company
              Greece
              Aegean
      RoseAegean
      Daisy Maritime Company
              Greece
              Aegean
      DaisyClyde
      I Shipping Corp.
              Marshall
      Islands
              Aegean
      TulipAegean
      Tiffany Maritime Company
              Greece
              Aegean
      TiffanyAegean
      Breeze Maritime Company
              Greece
              Aegean
      Breeze IAegean
      X Maritime Inc.
              Marshall
      Islands
              Aegean
      XAegean
      Marine Petroleum LLC1
              United
      Arab Emirates
              Aegean
      FlowerAegean
      Seven Maritime Inc.
              Liberia
              Aegean
      VIIVenus
      Holding Company
              Marshall
      Islands
              Aegean
      IXCarnaby
      Navigation Inc.
              Liberia
              Aegean
      Pride IBaltic
      Navigation Company
              Marshall
      Islands
              Aegean
      ForceMare
      Vision S.A.
              Marshall
      Islands
              Aegean
      XIMilos
      I Maritime Inc.
              Marshall
      Islands
              HopeSea
      Breezer Marine S.A.
              Marshall
      Islands
              Aegean
      PrincessMilos
      Shipping (Pte.) Ltd.
              Singapore
              MilosVera
      Navigation S.A.
              Liberia
              VeraOuranos
      Tanking S.A.
              Liberia
              OuranosPontos
      Navigation Inc.
              Marshall
      Islands
              LeaderAegean
      Bunkers at Sea NV
              Belgium
              SaraAegean
      Tanking S.A.
              Liberia
              FosSerifos
      Shipping (Pte.) Ltd.
              Singapore
              SerifosKithnos
      Maritime Inc.
              Marshall
      Islands
              KithnosAmorgos
      Maritime Inc.
              Marshall
      Islands
              Amorgos





1 Aegean
Marine Petroleum LLC is a controlled subsidiary which is 51% owned by a local
nominee.


30





Vessel-owning
      Subsidiary
              Country of
      Incorporation
              Vessel
      Name or
                Hull
      NumberKimolos
      Shipping (Pte.) Ltd.
              Singapore
              KimolosSyros
      I Maritime Inc.
              Marshall
      Islands
              SyrosMykonos
      I Maritime Inc.
              Marshall
      Islands
              MykonosSantorini
      I Maritime Inc.
              Marshall
      Islands
              SantoriniParos
      Shipping (Pte.) Ltd.
              Singapore
              ParosNaxos
      Shipping (Pte.) Ltd.
              Singapore
              NaxosEton
      Marine Ltd.
              Liberia
              PatmosTasman
      Seaways Inc.
              Liberia
              KalymnosICS
      Petroleum Ltd.
              British
      Columbia (Canada)
              PT36West
      Coast Fuel Transport Ltd.
              British
      Columbia (Canada)
              PT25Aegean
      Maistros Maritime Company
              Greece
              MaistrosAegean
      Ostria Maritime Company
              Greece
              OstriaNevado
      Navigation SA
              Liberia
              Aegean
      OrionAegean
      Ship III Maritime Company
              Greece
              Aegean
      IIIAegean
      Ship VIII Maritime Company
              Greece
              Aegean
      VIIIAegean
      Ship XII Maritime Company
              Greece
              Aegean
      XIIAegean
      Ace Maritime Company
              Greece
              Aegean
      AceAndros
      Marine Inc.
              Liberia
              DN-3800-11Dilos
      Marine Inc.
              Liberia
              DN-3800-12Ios
      Marine Inc.
              Liberia
              DN-3800-13Sifnos
      Marine Inc.
              Liberia
              DN-3800-14Tinos
      Marine Inc.
              Liberia
              DN-3800-15Kerkyra
      Marine S.A.
              Liberia
              QHS
      207Ithaki
      Marine S.A.
              Liberia
              QHS
      208Cephallonia
      Marine S.A.
              Liberia
              QHS
      209Paxoi
      Marine S.A.
              Liberia
              QHS
      210Zakynthos
      Marine S.A.
              Liberia
              QHS
      215Lefkas
      Marine S.A.
              Liberia
              QHS
      216Kythira
      Marine S.A.
              Liberia
              QHS
      217Benmore
      Services S.A.
              Liberia
              QHS
      222Ingram
      Enterprises Co.
              Liberia
              QHS
      223Santon
      Limited
              Liberia
              QHS
      224Kassos
      Navigation S.A.
              Liberia
              QHS
      225Tilos
      Navigation S.A.
              Liberia
              QHS
      226Halki
      Navigation S.A.
              Liberia
              QHS
      227Symi
      Navigation S.A.
              Liberia
              QHS
      228




D.           Property,
Plant and Equipment




Real
Property




The
following table presents certain information on our leased and owned properties
as of March 31, 2009.  We consider our properties to be suitable and
adequate for our present needs.




31







Location
                      
                      Principal
      Use
                      
                      Leased
                        or
      Owned
                      
                      Lease
                        Expiration
      DatePiraeus,
      Greece
                      
                      Business
      coordination center and ship-management office
                      
                      Leased
                      
                      May
      2011 and May 2012Portland,
      the United Kingdom
                      
                      Administrative
      and operations office and storage facility
                      
                      Leased
                      
                      April
      2030Fujairah,
      the United Arab Emirates
                      
                      Administrative
      and operations office
                      
                      Leased
                      
                      December
      2009Khor
      Fakkan, the United Arab Emirates
                      
                      Administrative
      and operations office
                      
                      Leased
                      
                      December
      2009Gibraltar
                      
                      Administrative
      and operations office
                      
                      Leased
                      
                      April
      2140Kingston,
      Jamaica
                      
                      Administrative
      and operations office
                      
                      Leased
                      
                      month-to-monthSingapore
                      
                      Administrative
      and operations office
                      
                      Leased
                      
                      September
      2010Antwerp,
      Belgium
                      
                      Administrative
      and operations office
                      
                      Leased
                      
                      October
      2010Edgewater,
      New Jersey
                      
                      Sales
      and marketing office
                      
                      OwnedMiami,
      Florida
                      
                      Sales
      and marketing office
                      
                      Leased
                      
                      October
      2009New
      York City, New York
                      
                      Administrative
      office
                      
                      Leased
                      
                      December
      2009Nicosia,
      Cyprus
                      
                      Administrative
      office
                      
                      Leased
                      
                      May
      2010Vancouver,
      Canada
                      
                      Administrative
      and operations office
                      
                      Leased
                      
                      February
      2016Montreal,
      Canada
                      
                      Sales
      and marketing office
                      
                      Leased
                      
                      January
      2012




Fleet




The
following table lists our fleet of owned vessels as of March 31,
2009:




Name
              Double
      Hull
              Flag
              Build
              DwtBunkering
      Tankers:Kalymnos
              Yes
              Liberia
              2009
              5,500Syros
              Yes
              Liberia
              2008
              4,596Patmos
              Yes
              Liberia
              2008
              6,262Naxos
              Yes
              Singapore
              2008
              4,626Paros
              Yes
              Singapore
              2008
              4,629Mykonos
              Yes
              Liberia
              2008
              4,626Santorini
              Yes
              Liberia
              2008
              4,629Kimolos
              Yes
              Singapore
              2008
              4,664Kithnos
              Yes
              Liberia
              2007
              4,626Amorgos
              Yes
              Liberia
              2007
              4,664Serifos
              Yes
              Singapore
              2007
              4,664Milos
              Yes
              Singapore
              2007
              4,626Aegean
      Tiffany
              Yes
              Singapore
              2004
              2,747Aegean
      Breeze I
              Yes
              Singapore
              2004
              2,747Aegean
      Flower
              Yes
              United
      Arab Emirates
              2001
              6,523Aegean
      Tulip
              Yes
              Liberia
              1993
              4,853Aegean
      Ace
              Yes
              Liberia
              1992
              1,615Aegean
      Princess
              Yes
              Liberia
              1991
              7,030Sara
              Yes
              Malta
              1990
              7,389


32





Name
                        Double
      Hull
                        Flag
                        Build
                        DwtBunkering
      Tankers:Aegean
      III
                        Yes
                        Greece
                        1990
                        2,973Aegean
      VIII
                        Yes
                        Greece
                        1990
                        2,973Aegean
      Rose
                        Yes
                        Gibraltar
                        1988
                        4,935Aegean
      Daisy
                        Yes
                        Gibraltar
                        1988
                        4,935Vera
                        No
                        Liberia
                        1985
                        3,720Aegean
      VII
                        No
                        Liberia
                        1984
                        3,892Aegean
      XI
                        Yes
                        Liberia
                        1984
                        11,050Aegean
      X
                        Yes
                        Panama
                        1982
                        6,400Aegean
      Pride I
                        Yes
                        Liberia
                        1982
                        11,538Aegean
      Force
                        Yes
                        Liberia
                        1980
                        6,679Hope
                        Yes
                        Liberia
                        1980
                        10,597Aegean
      XII
                        No
                        Liberia
                        1979
                        3,680Bunkering
      BargesPT36
                        No
                        Canada
                        1988
                        3,730PT25
                        No
                        Canada
                        1980
                        2,560Floating
      Storage FacilitiesLeader
                        Yes
                        Panama
                        1985
                        83,890Ouranos
                        Yes
                        Liberia
                        1983
                        67,980Fos
                        Yes
                        Liberia
                        1981
                        67,980Aegean
      IX
                        No
                        Panama
                        1976
                        4,999Special
      Purpose VesselOrion
                        No
                        Liberia
                        1991
                        550




We
have positioned our bunkering tankers across our existing service centers and
review vessel positioning on a periodic basis and reposition them among our
existing or new service centers to optimize their deployment. Our vessels
operate within or outside the territorial waters of each geographical location
and, under international law, usually fall under the jurisdiction of the country
of the flag they carry. Generally, our bunkering tankers, unlike our bunkering
barges, are not permanently located within any particular territorial waters and
we are free to use all of our bunkering tankers in any geographical location. We
have positioned four of our tankers in the United Arab Emirates, Ghana,
Gibraltar and Jamaica and use them as floating storage facilities and a 550 dwt
tanker as a special purpose vessel in Portland (U.K.).




We
intend to expand our business and marine fuel delivery capability. In
furtherance of this objective, we have entered into newbuilding contracts with
two shipyards located in China for the construction of new double hull bunkering
tankers; we have 19 remaining vessels for delivery in the next two years.
As we expand our global presence, we expect to enter into agreements with third
party sellers to purchase additional double hull bunkering tankers. Following
the delivery of the 19 newbuildings that we have under contract, we expect to
have 47 double hull vessels in our operating fleet of bunkering tankers by
2010.




33







The
following table presents certain information concerning 19 bunkering tankers
that we have contracted to build as of March 31, 2009.




Hull
      Number
              Hull
      Type
              Expected
      Delivery
              Dwt
              ShipyardBunkering
      Tankers Under Contracts:DN-3800-11
              Double
      Hull
              Q4
      2009
              4,600
              FujianDN-3800-12
              Double
      Hull
              Q1
      2010
              4,600
              FujianDN-3800-13
              Double
      Hull
              Q1
      2010
              4,600
              FujianDN-3800-14
              Double
      Hull
              Q1
      2010
              4,600
              FujianDN-3800-15
              Double
      Hull
              Q2
      2010
              4,600
              FujianQHS
      207
              Double
      Hull
              Q2
      2009
              5,500
              HyundaiQHS
      208
              Double
      Hull
              Q2
      2009
              5,500
              HyundaiQHS
      209
              Double
      Hull
              Q3
      2009
              5,500
              HyundaiQHS
      210
              Double
      Hull
              Q3
      2009
              5,500
              HyundaiQHS
      215
              Double
      Hull
              Q3
      2009
              5,500
              HyundaiQHS
      216
              Double
      Hull
              Q4
      2009
              5,500
              HyundaiQHS
      217
              Double
      Hull
              Q4
      2009
              5,500
              HyundaiQHS
      222
              Double
      Hull
              Q4
      2009
              5,500
              HyundaiQHS
      223
              Double
      Hull
              Q1
      2010
              5,500
              HyundaiQHS
      224
              Double
      Hull
              Q1
      2010
              5,500
              HyundaiQHS
      225
              Double
      Hull
              Q1
      2010
              5,500
              HyundaiQHS
      226
              Double
      Hull
              Q1
      2010
              5,500
              HyundaiQHS
      227
              Double
      Hull
              Q2
      2010
              5,500
              HyundaiQHS
      228
              Double
      Hull
              Q2
      2010
              5,500
              Hyundai




In
addition, we own two specialty tankers. We use our specialty tankers to make
distribution of gasoline and other refined petroleum products to island
economies, including the Greek islands.






The
following table presents certain information concerning our two specialty
tankers.




Name
              Double
      Hull
              Flag
              Build
              DwtSpecialty
      Tankers:Maistros
              Yes
              Greece
              2008
              2,454Ostria
              Yes
              Greece
              2009
              2,454




ITEM
      4A.
            UNRESOLVED
      STAFF COMMENTS




None




ITEM
      5.
            OPERATING
      AND FINANCIAL REVIEW AND PROSPECTS




The
following management's discussion and analysis of the results of our operations
and our financial condition should be read in conjunction with the financial
statements and the notes to those statements included elsewhere in this report.
This discussion includes forward-looking statements that involve risks and
uncertainties. Our actual results may differ materially from those anticipated
in these forward-looking statements as a result of many factors, such as those
set forth in the "Risk Factors" section and elsewhere in this
report.




34




A.           
Operating Results




General




We
are a marine fuel logistics company that physically supplies and markets refined
marine fuel and lubricants to ships in port and at sea. As a physical supplier,
we purchase marine fuel from refineries, major oil producers and other sources
and resell and deliver these fuels using our bunkering tankers to a broad base
of end users.




We
sell marine petroleum products to customers primarily at a margin over PLATTS
prices (benchmark market prices). PLATTS prices are quoted daily by region and
by terms of delivery. We have not had a significant number of long-term written
agreements with customers. Under a typical sales contract, a customer requests
that we quote a fixed price per metric ton for the sale and delivery of a
specified volume and classification of marine fuel on a given date. The customer
requests a quotation several days prior to the delivery date. We, generally, do
not quote prices for periods in excess of one week. Once an agreement has been
made with a customer, we are deemed to be bound to deliver the specified
quantity and classification of marine fuel at the quoted fixed price on the
specified delivery date to an identified vessel at a named location. We remain
responsible for securing the supply of marine fuel from the supplier and for
delivering the marine fuel to the customer's vessel.




We
purchase marine petroleum products from reputable suppliers under either
long-term supply contracts or on the spot markets at a margin over PLATTS
prices. Except for our service centers in Gibraltar, Ghana and the United Arab
Emirates, we generally take deliveries of the products on the day of, or few
days prior to, the delivery of the products to the customer's vessel. In
Gibraltar, Ghana and the United Arab Emirates, utilizing our storage facilities,
we take deliveries of the products generally more than one but less than two
weeks prior to delivery of the products to our customers. The cost of our marine
fuel purchases is generally fixed at the date of loading from the supplier's
premises. Generally, under our long-term supply contracts, the supplier
undertakes to supply us with a minimum quantity of marine fuel per month subject
to a maximum. Price calculations vary from supplier to supplier in terms of the
supplier's margins, the referenced PLATTS prices and the calculation of the
average PLATTS price. Depending on the agreement with each supplier, the
referenced PLATTS price could be the spot price or an average price over a
specified period.




We
deliver marine petroleum products to our customers mainly through our bunkering
tankers. We are responsible for paying our tankers' operating expenses,
including the cost of crewing, insuring, repairing and maintaining the vessel,
spares and consumable stores, tonnage taxes and other vessel-related expenses.
Our bunkering tankers are not used for the transportation of petroleum products
across oceans. Accordingly, a significant portion of our vessel operating
expenses are fixed or semi-variable (e.g., a bunkering tanker's insurance costs,
crew wages and certain other costs are incurred irrespective of the number of
sales deliveries it makes during a period) and, as a group, represent the most
significant operating expense for us other than the cost of marine petroleum
products sold.




We
incur overhead costs to support our operations. In general, the logistics of
purchasing, selling and delivering marine fuel to customers are managed and
coordinated by employees at our marketing and operating office in Greece,
employees at our local service centers and the crew of our bunkering
tankers.




Factors
Affecting Our Results of Operations




We
believe that the important measures for analyzing trends in our results of
operations consist of the following:




●
            Sales
      volume of marine fuel.We define the sales volume of marine
      fuel as the volume of sales of various classifications of marine fuel oil,
      or MFO, marine diesel oil, or MDO, and marine gas oil, or MGO, for the
      relevant period, measured in metric tons. The sales volume of marine fuel
      is an indicator of the size of our operations as it affects both the sales
      and the cost of marine petroleum products recorded during a given period.
      Sales volume of marine fuel does not include the sales volume of
      lubricants due to insignificant volumes for all periods
      presented.


35


●
              Gross
      spread on marine petroleum products and gross spread per metric ton of
      marine fuel sold.  Gross spread on marine petroleum
      products represents the margin that we generate on sales of marine fuel
      and lubricants.  Gross spread on marine fuel represents the
      margin that we generate on sales of various classifications of MFO or MGO.
      Gross spread on lubricants represents the margin that we generate on sales
      of lubricants.  We calculate the gross spreads by subtracting
      from the sales of the respective marine petroleum product the cost of the
      marine petroleum product sold and cargo transportation
      costs.  For arrangements in which we physically supply marine
      petroleum products using our bunkering tankers, costs of
      marine petroleum products sold represents amounts paid by us for marine
      petroleum products sold in the relevant reporting period. For arrangements
      in which marine petroleum products are purchased from our related company,
      Aegean Oil, cost of marine petroleum products sold represents the total
      amount paid by us to the physical supplier for marine petroleum products
      and their delivery to our customers.  For arrangements in which
      we purchase cargos for our floating storage facilities, cargo
      transportation costs are either included in the purchase price of marine
      fuels that we paid to the supplier or paid separately by us to a
      third-party transportation
provider.


Gross
spread per metric ton of marine fuel sold represents the margins we generate per
metric ton of marine fuel sold. We calculate gross spread per metric ton of
marine fuel sold by dividing the gross spread on marine fuel by the sales volume
of marine fuel. Marine fuel sales do not include sales of lubricants. The
following table reflects the calculation of gross spread per metric ton of
marine fuel sold for the periods presented:


For
      the Year Ended
                                                                                                                  December 31,2004
                                                                                                                
                                                                                                                
                                                                                                                2005
                                                                                                                
                                                                                                                
                                                                                                                2006
                                                                                                                
                                                                                                                
                                                                                                                2007
                                                                                                                
                                                                                                                
                                                                                                                2008(in
      thousands of U.S. dollars, unless otherwise stated)Sales
      of marine petroleum products
                                                                                                                
                                                                                                                
                                                                                                                247,436
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                505,605
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                790,657
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                1,345,849
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                2,768,067Less:
      Cost of marine petroleum products sold
                                                                                                                
                                                                                                                
                                                                                                                222,439
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                464,801
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                728,637
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                1,251,712
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                2,594,443Less:
      Cargo transportation costs
                                                                                                                
                                                                                                                
                                                                                                                -
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                -
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                -
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                4,466
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                12,661Gross spread on marine petroleum
      products
                                                                                                                
                                                                                                                
                                                                                                                24,997
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                40,804
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                62,020
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                89,671
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                160,963Less: Gross spread on
      lubricants
                                                                                                                
                                                                                                                
                                                                                                                374
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                264
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                455
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                536
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                1,298Gross spread on marine
      fuel
                                                                                                                
                                                                                                                
                                                                                                                24,623
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                40,540
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                61,565
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                89,135
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                159,665Sales volume of marine fuel
      (metric tons)
                                                                                                                
                                                                                                                
                                                                                                                1,169,430
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                1,746,377
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                2,367,289
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                3,437,269
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                5,200,256Gross spread per metric ton of
      marine fuel sold (U.S. dollars)
                                                                                                                
                                                                                                                
                                                                                                                21.1
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                23.2
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                26.0
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                25.9
                                                                                                                
                                                                                                                
                                                                                                                
                                                                                                                30.7


The
following table reconciles our gross spread on marine petroleum products sold to
the most directly comparable GAAP measure, operating income, for all periods
presented:




For
      the Year Ended
                                                                  December 31,2004
                                                                
                                                                
                                                                2005
                                                                
                                                                
                                                                2006
                                                                
                                                                
                                                                2007
                                                                
                                                                
                                                                2008(in
      thousands of U.S. dollars)Gross spread on marine petroleum
      products
                                                                
                                                                
                                                                24,997
                                                                
                                                                
                                                                
                                                                40,804
                                                                
                                                                
                                                                
                                                                62,020
                                                                
                                                                
                                                                
                                                                89,671
                                                                
                                                                
                                                                
                                                                160,963Add: Voyage
      revenues
                                                                
                                                                
                                                                14,983
                                                                
                                                                
                                                                
                                                                10,450
                                                                
                                                                
                                                                
                                                                11,639
                                                                
                                                                
                                                                
                                                                5,758
                                                                
                                                                
                                                                
                                                                1,379Add: Other
      revenues
                                                                
                                                                
                                                                593
                                                                
                                                                
                                                                
                                                                1,275
                                                                
                                                                
                                                                
                                                                1,516
                                                                
                                                                
                                                                
                                                                1,266
                                                                
                                                                
                                                                
                                                                8,526Add:Gain on sale of
      vessel
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                2,693
                                                                
                                                                
                                                                
                                                                -Add:Cargo transportation
      costs
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                4,466
                                                                
                                                                
                                                                
                                                                12,661Less: Salaries, wages and related
      costs
                                                                
                                                                
                                                                (5,052
                                                                )
                                                                
                                                                
                                                                (8,958
                                                                )
                                                                
                                                                
                                                                (12,871
                                                                )
                                                                
                                                                
                                                                (24,363
                                                                )
                                                                
                                                                
                                                                (41,666
                                                                )Less: Vessel hire
      charges
                                                                
                                                                
                                                                (2,436
                                                                )
                                                                
                                                                
                                                                (518
                                                                )
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                -Less:
      Depreciation
                                                                
                                                                
                                                                (1,546
                                                                )
                                                                
                                                                
                                                                (2,226
                                                                )
                                                                
                                                                
                                                                (4,240
                                                                )
                                                                
                                                                
                                                                (6,373
                                                                )
                                                                
                                                                
                                                                (12,604
                                                                )Less:
      Amortization
                                                                
                                                                
                                                                (386
                                                                )
                                                                
                                                                
                                                                (636
                                                                )
                                                                
                                                                
                                                                (1,684
                                                                )
                                                                
                                                                
                                                                (3,224
                                                                )
                                                                
                                                                
                                                                (3,953
                                                                )Less: Management
      fees
                                                                
                                                                
                                                                (183
                                                                )
                                                                
                                                                
                                                                (182
                                                                )
                                                                
                                                                
                                                                (223
                                                                )
                                                                
                                                                
                                                                (54
                                                                )
                                                                
                                                                
                                                                -Less: Other operating
      expenses
                                                                
                                                                
                                                                (12,348
                                                                )
                                                                
                                                                
                                                                (16,629
                                                                )
                                                                
                                                                
                                                                (25,697
                                                                )
                                                                
                                                                
                                                                (39,042
                                                                )
                                                                
                                                                
                                                                (73,157
                                                                )Operating
      income
                                                                
                                                                
                                                                18,622
                                                                
                                                                
                                                                
                                                                23,380
                                                                
                                                                
                                                                
                                                                30,460
                                                                
                                                                
                                                                
                                                                30,798
                                                                
                                                                
                                                                
                                                                52,149


36





The
amount that we have to pay for marine petroleum products to fulfill a customer
order has been the primary variable in determining the prices quoted to
customers. Therefore, we evaluate gross spread per metric ton of marine fuel
sold and gross spread on marine petroleum products in pricing individual
transactions and in long-term strategic pricing decisions. We actively monitor
our pricing and sourcing strategies in order to optimize our gross spread on
marine petroleum products. We believe that this measure is important to
investors because it is an effective intermediate performance measure of the
strength of our operations.




Gross
spread on marine petroleum products (including gross spread on marine fuel and
gross spread on lubricants) and gross spread per metric ton of marine fuel sold
should not be considered as alternatives to operating income, net income or
other GAAP measures and may not be comparable to similarly titled measures of
other companies. Gross spread on marine petroleum products and gross spread per
metric ton of marine fuel sold do not reflect certain direct and indirect costs
of delivering marine petroleum products to our customers (such as crew salaries,
vessel depreciation, storage costs, other vessel operating expenses and overhead
costs) or other costs of doing business.




For
all periods presented, we purchased marine petroleum products in Greece from our
related company, Aegean Oil, which is a physical supplier in Greece. The cost of
these marine petroleum products was contractually calculated based on Aegean
Oil's actual cost of these products plus a margin.  For further
discussion please refer to the section of this report entitled "Major
Shareholders and Related Party Transactions."




●
            Number of
      markets served.  The number
      of markets served includes our operations at our service centers in the
      United Arab Emirates, Gibraltar, Jamaica, Singapore, Northern Europe, West
      Africa, Vancouver, Portland (U.K.) and Greece, where we conduct operations
      through our related company, Aegean Oil, as well as our trading operations
      in Montreal and Mexico. The number of markets served is an indicator of
      the geographical distribution of our operations and affects both the
      amount of revenues and expenses that we record during a given
      period.  We commenced physical supply operations in Singapore on
      June 2, 2006, in Northern Europe on October 9, 2007, in Ghana on
      January 15, 2008, and in Portland (U.K.) on April 1, 2008.  On
      July 1, 2008, we acquired ICS Petroleum, a Canadian based marketer and
      supplier of marine petroleum products in Vancouver, Montreal and
      Mexico.




●
            Average
      number of operating bunkering vessels.  Average
      number of operating bunkering vessels is the number of operating bunkering
      vessels in our fleet for the relevant period, as measured by the sum of
      the number of days each bunkering vessel was used as a part of our fleet
      during the period divided by the cumulative number of calendar days in the
      period multiplied by the number of operating bunkering vessels at the end
      of the period.  This figure does not take into account
      non-operating days due to either scheduled or unscheduled maintenance. The
      average number of operating bunkering vessels is an indicator of the size
      of our fleet and operations and affects both the amount of revenues and
      expenses that we record during a given
period.




The following table reflects our sales
volume of marine fuel, gross spread on marine petroleum products, gross spread
per metric ton of marine fuel sold, number of service centers and averagenumber of operating
bunkeringvesselsfor the periods
indicated.




37







Year
      Ended December 31,2006
                        
                        
                        2007
                        
                        
                        2008(in
      thousands of U.S. dollars,
                          unless
      otherwise stated)Sales
      volume of marine fuel (metric tons)
                        
                        
                        2,367,289
                        
                        
                        
                        3,437,269
                        
                        
                        
                        5,200,256Gross
      spread on marine petroleum products
                        
                        
                        62,020
                        
                        
                        
                        89,671
                        
                        
                        
                        160,963Gross
      spread per metric ton of marine fuel sold (U.S. dollars)
                        
                        
                        26.0
                        
                        
                        
                        25.9
                        
                        
                        
                        30.7Number
      of markets served, end of period
                        
                        
                        5.0
                        
                        
                        
                        6.0
                        
                        
                        
                        11.0Average
      number of operating bunkering vessels
                        
                        
                        11.1
                        
                        
                        
                        13.5
                        
                        
                        
                        22.7







Sales
of Marine Petroleum Products and Gross Spread on Marine Petroleum
Products




Our
sales of marine petroleum products and gross spread on marine petroleum products
consist of the sales revenue and gross spread that we generate on sales of
marine fuel and lubricants.




Our
sales of marine petroleum products are driven primarily by the number of our
service centers, the number of operating bunkering tankers in our fleet, our
sales prices and our credit terms and credit control process. The cost of marine
petroleum products sold is driven primarily by availability of marine petroleum
products, our purchasing methods, supplier cost prices and credit terms and our
internal quality control processes. These drivers, in turn, are affected by a
number of factors, including:




●
            our
      entrance into new markets;




●
            our
      purchasing methods of marine petroleum
products;




●
            our
      marketing strategy;




●
            our
      vessel acquisitions and disposals;




●
            PLATTS
      prices;




●
            conditions
      in the international shipping and the marine fuel supply
      industries;




●
            regulation
      of the marine fuel supply industry;




●
            regulation
      of the tanker industry;




●
            levels
      of supply of and demand for marine petroleum
  products;




●
            levels
      of competition; and




●
            other
      factors affecting our industry.




38


The following table reflects our growth in sales of marine
petroleum products in each of our service centers for the periods indicated. The
sales of marine petroleum products attributed to each service center are based
on the point-of-delivery geographical location of the customer
vessels.




Year
      Ended December 31,2006
                                                        
                                                        
                                                        2007
                                                        
                                                        
                                                        2008(in
      thousands of U.S. dollars)Greece
      (1)
                                                        
                                                        
                                                        167,061
                                                        
                                                        
                                                        
                                                        165,231
                                                        
                                                        
                                                        
                                                        368,679Gibraltar
      (1)
                                                        
                                                        
                                                        240,412
                                                        
                                                        
                                                        
                                                        433,524
                                                        
                                                        
                                                        
                                                        536,912United
      Arab Emirates (1)
                                                        
                                                        
                                                        180,453
                                                        
                                                        
                                                        
                                                        287,347
                                                        
                                                        
                                                        
                                                        512,281Jamaica
      (1)
                                                        
                                                        
                                                        147,211
                                                        
                                                        
                                                        
                                                        212,093
                                                        
                                                        
                                                        
                                                        280,581Singapore
      (1)(2)
                                                        
                                                        
                                                        39,496
                                                        
                                                        
                                                        
                                                        193,747
                                                        
                                                        
                                                        
                                                        555,735Northern
      Europe (1)(3)
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        37,443
                                                        
                                                        
                                                        
                                                        161,735West
      Africa (1)(4)
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        106,082Portland
      (U.K.) (1)(5)
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        62,018Vancouver
      (1)(6)
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        84,902Other
      sales (7)
                                                        
                                                        
                                                        16,024
                                                        
                                                        
                                                        
                                                        16,464
                                                        
                                                        
                                                        
                                                        99,142Total
                                                        
                                                        
                                                        790,657
                                                        
                                                        
                                                        
                                                        1,345,849
                                                        
                                                        
                                                        
                                                        2,768,067




_______________


(1)Excludes
sales of lubricants which are included in other sales.


(2)We commenced
physical supply operations in Singapore on June 2, 2006.


(3)We commenced
physical operations in Northern Europe on October 9, 2007.


(4)We commenced
physical supply operations in West Africa on January 15, 2008.


(5)We commenced
physical supply operations in Portland (U.K.) on April 1, 2008.


(6)We commenced
physical operation in Vancouver on July 1, 2008.


(7)Includes sales
of marine fuel not attributed to any of our service centers and sales of
lubricants worldwide.




We
sell and deliver marine petroleum products to a broad and diversified customer
base, including international commercial shipping companies, governments, and
marine fuel traders and brokers. For the years ended December 31, 2006,
2007 and 2008, none of our customers accounted for more than 10% of our total
revenues.




The
commercial shipping industry generally purchases marine fuel on a spot basis and
historically we have not had any long-term sales volume contracts with
customers. On March 1, 2006, however, we entered into a two-year contract to
supply minimum quantities of fuel to a commercial customer in Jamaica. As we
expand our global network and increase our geographical coverage, we expect some
of our customers to enter into long-term sales volume contracts.




In
addition to our physical supply operations, from time to time we conduct limited
marine fuel trading activities, generally in locations where we do not have
service centers. This business involves activities whereby we contract with
third-party physical suppliers to sell us marine fuel and to deliver the marine
fuel to a customer in the relevant location. Accordingly, our trading activities
do not involve our physical possession of marine fuel and require less complex
logistical operations, and infrastructure. As such, we typically earn a
significantly lower gross spread from our trading activities than from our
physical supply activities.




We
purchase and take delivery of marine petroleum products from various suppliers
under long-term volume contracts or on the spot market. Long-term supply
contracts from third parties allow us to minimize our exposure to supply
shortages. In general, at each of our service centers except for Gibraltar, the
United Arab Emirates and West Africa, we purchase from local supply
sources.




Our
cost of marine petroleum products includes purchases from related companies. In
Greece, we purchase marine petroleum products under a ten-year supply contract
that commenced on April 1, 2005, from our related company, Aegean Oil, which
charges us its actual cost of the marine petroleum products plus a margin. We
believe the amounts we paid to our related company are comparable to amounts
that we would have negotiated in arm's-length transactions with unaffiliated
third parties. For
further discussion of our marine petroleum products purchases from Aegean Oil,
please refer to the section of this report entitled "Major Shareholders and
Related Party Transactions."




39






The
following table reflects our cost of marine petroleum products sold incurred
from third-party suppliers and from our related company suppliers for the
periods indicated.




Year
      Ended December 31,2006
                                                
                                                
                                                2007
                                                
                                                
                                                2008(in
      thousands of U.S. dollars)Third-party
      suppliers
                                                
                                                
                                                573,615
                                                
                                                
                                                
                                                1,091,769
                                                
                                                
                                                
                                                2,242,911Related
      company suppliers
                                                
                                                
                                                155,022
                                                
                                                
                                                
                                                159,943
                                                
                                                
                                                
                                                351,532Total
                                                
                                                
                                                728,637
                                                
                                                
                                                
                                                1,251,712
                                                
                                                
                                                
                                                2,594,443




We
seek to increase our sales of marine petroleum products and our gross spread on
marine petroleum products on an integrated basis, through expansion into new
markets, acquisitions of double hull bunkering tankers and the diversification
and further optimization of purchasing methods. Our gross spread on marine
petroleum products differs for each of our service centers, reflecting the
different competitive conditions that exist in the markets served by them.
Factors affecting competitive conditions in a market that we service include
customer demand, availability of supplies and the strength and number of
competitors that operate in the market. We believe that for any new service
centers that we may establish, gross spread on marine petroleum products may be
lower than for our existing service centers. We also believe that the
competitive conditions in the markets served by our existing service centers may
generally be more favorable to us than those in other markets that we may
consider for future expansion.




Voyage
Revenues




Our
voyage revenues are primarily derived from employment of our specialty tankers
which are double hull petroleum tankers with roll-on roll-off facilities and
refueling capabilities for fuel trucks.  In 2008, we have employed our
specialty tanker, Maistros, under a contract of affreightment with Aegean Oil
for the distribution of gasoline and other refined petroleum products in the
Greek islands. During the year ended December 31, 2008, we have received $1.4
million in payments from Aegean Oil under this contract of
affreightment.  With the delivery of Ostria in 2009, we expect our
voyage revenues to increase.




In
the past, our voyage revenues were primarily derived from time and voyage
charters of our only non-bunkering tanker, Aegean Hellas, which is a single hull
Aframax tanker with a cargo-carrying capacity of approximately 92,000 dwt. We
purchased this tanker with the initial intention of
strategically positioning it as a floating storage facility at one of the ports
that we serve. As of December 31, 2006, we were deploying this vessel for
hire in the international spot market. Voyage revenues of Aegean Hellas were
driven primarily by the number of operating days and the amount of daily charter
hire rates, which, in turn, were affected by a number of factors, including the
duration of the charter, the age, condition and specification of the vessel and
the levels of supply and demand in the tanker shipping industry. On
April 17, 2007, we sold Aegean Hellas to an unrelated third
party.




Salaries,
Wages and Related Costs




We employ
salaried employees at our offices in Greece, New York City, and at each of our
service centers. Furthermore, we employ crews for our bunkering tankers under
short-term contracts. The majority of our salaries, wages and related costs are
for our salaried employees and vessel crews. Costs relating to our salaried
employees aremainly
incurred at our office in Greece where most of our sales and marketing,
operations, technical, accounting and finance departments are locatedand
our administrative office in New York City from where we oversee our financial
and other reporting functions. We maintain a minimal number of salaried
employees at our service centers where we typically employ a local operations
manager and staff to support the logistical aspects of our
operations.




40






The
following table reflects salaries, wages and costs related to our crews and
salaried employees.




Year
      Ended December 31,2006
                                                                        
                                                                        
                                                                        2007
                                                                        
                                                                        
                                                                        2008(in
      thousands of U.S. dollars)Shipboard
      personnel
                                                                        
                                                                        
                                                                        8,319
                                                                        
                                                                        
                                                                        
                                                                        11,509
                                                                        
                                                                        
                                                                        
                                                                        21,017Shoreside
      personnel
                                                                        
                                                                        
                                                                        4,552
                                                                        
                                                                        
                                                                        
                                                                        12,854
                                                                        
                                                                        
                                                                        
                                                                        20,649Total
                                                                        
                                                                        
                                                                        12,871
                                                                        
                                                                        
                                                                        
                                                                        24,363
                                                                        
                                                                        
                                                                        
                                                                        41,666




Our salaries, wages and related costs have grown over the
past several years mainly due to our expansion and the increase in crew wages as
we have added bunkering vessels to our fleet. We expect that the amount of
salaries, wages and related costs will continue to increase as a result of our
further expansion into new markets and acquisitions of additional double hull
bunkering tankers and floating storage facilities.




Depreciation




The
cost of our vessels is depreciated on a straight-line basis over the expected
useful life of each vessel. We expect that these charges will continue to
increase primarily as a result of our planned acquisitions of additional
bunkering tankers and floating storage facilities.




Other
Operating Expenses




Other
operating expenses primarily include the operating expenses of our vessels,
including the cost of insurance, expenses relating to repairs and maintenance
(which does not include amortization of drydocking costs), the cost of spares
and consumable stores, consumption of marine petroleum products and other
miscellaneous expenses.  Our bunkering vessel operating expenses,
which generally represent fixed costs, have historically increased as a result
of the enlargement of our fleet. We expect these expenses to increase further as
a result of our acquisition of additional bunkering vessels and floating storage
facilities.




Other
operating expenses also include expenses relating to rent, communal charges,
advertising, travel, public relations and auditing and legal fees. We expect
these expenses to increase further as we enter new markets and as a result of
our transformation from a privately-held business to a publicly-traded
company.




Other
operating expenses include a provision for doubtful accounts. We believe that
our provision for doubtful accounts has been relatively low in the past several
years due to our effective credit control process. As we expand our operations
across the globe, we expect our provision for doubtful accounts to increase
concurrently with our revenues.




Finally,
other operating expenses include amounts relating to the storage of marine
petroleum products resulting from acquisitions and use of floating storage
facilities such as our tankers, Ouranos, Fos, Leader and Aegean IX. We believe
that the ownership of floating storage facilities will allow us to mitigate the
risk of supply shortages. Generally, the costs of storage have been included in
the price per metric ton quoted by local suppliers of refined marine fuel.
Accordingly, we expect that the ownership of floating storage facilities will
allow us to convert the variable costs of this storage fee markup per metric ton
quoted by suppliers into fixed costs of operating our storage facilities,
allowing us to spread larger sales volumes over a fixed cost base and to
decrease our refined marine fuel costs.




Management
Fees




We
have historically paid Aegean Shipping Management S.A., or Aegean Shipping, our
former fleet manager and a related company, owned and controlled by members of
Mr. Melisanidis' family, a fixed management fee per month for each vessel in our
operating fleet in exchange for providing our bunkering tankers and Aframax
tankers with strategic, technical and commercial management services in
connection with the deployment of our fleet. On April 17, 2007, we sold the last
vessel managed by Aegean Shipping, Aegean Hellas. We believe the amounts we paid
to our related company manager were comparable to amounts that we would have
negotiated in arm's-length transactions with unaffiliated third
parties.




41




Interest
and Finance Costs




We
have historically incurred interest expense and financing costs in connection
with long-term debt to partially finance the acquisitions of our vessels and in
connection with short-term bank borrowings obtained for working capital
purposes. In connection with our initial public offering, we repaid and
terminated a portion of our outstanding indebtedness. Subsequently, we have
incurred and expect to continue incurring interest expense and financing costs
under our existing credit facilities to finance the construction of our new
bunkering tankers and our senior secured credit facility. We intend to limit the
amount of these expenses and costs by repaying our outstanding indebtedness from
time to time from our cash flows from operations.




We
believe that, in the short-term, a
majorityof the interest and financing costs relating to our credit
facilities to finance vessel construction, will be capitalized as part of the
acquisition costs of our vessels and not be incurred as interest expense in our
statements of income.




Income
Taxes




Our
principal operating subsidiary, AMP, is incorporated in the Republic of Liberia.
Under regulations promulgated by the Liberian Ministry of Finance, because AMP
is considered a non-resident domestic corporation, it is not required to pay any
tax or file any report or return with the Republic of Liberia in respect of
income derived from its operations outside of the Republic of Liberia. The
Liberian Ministry of Justice has issued an opinion that these regulations are
valid. If AMP were subject to Liberian tax, it would be subject to tax at a rate
of 35% on its worldwide income, and dividends it pays to us would be subject to
a withholding tax at rates ranging from 15% to 20%.




AMP
has established an office in Greece which provides services to AMP and AMP's
office in Cyprus. Under the laws of Greece, and in particular under Greek Law
3427/2005, which amended, replaced and supplemented provisions of Law 89/1967,
which expired on December 31, 2005, the income of AMP's Greek office is
calculated on a cost plus basis on expenses incurred by that office. The Greek
Ministry of Economy and Finance has determined that the profit margin applicable
to AMP is 5%. This determination is subject to periodic review. AMP's income, as
calculated by applying the 5% profit margin, is subject to Greek corporate
income tax at the rate of 29% for fiscal year 2006 and 25% for fiscal years 2007
and later. All expenses to which the profit percentage applies are deducted from
gross income for Greek corporate income tax purposes. Accordingly, under Greek
Law 3427/2005, as currently applied to us, we expect that AMP will continue to
have no liability for any material amount of Greek income tax.




Under
the laws of the countries of incorporation of our vessel-owning subsidiaries and
our subsidiaries that operate service centers and the laws of the countries of
our vessels' registration, our vessel-owning companies are generally not subject
to tax on our income that is characterized as shipping income.




Our
corporate income tax exposure is in taxable jurisdictions such as Gibraltar,
Jamaica, Singapore, Belgium, the United Kingdom and Canada.




Our
business is affected by taxes imposed on the purchase and sale of marine
petroleum products in various jurisdictions in which we operate from time to
time. These taxes include sales, excise, goods and services taxes, value-added
taxes, and other taxes.  Other than in Canada, we do not pay a
material amount of tax in any jurisdiction in which we operate.  For
the years ended December 31, 2008, 2007 and 2006, our income tax amounted to
$1.9 million, $8,000 and $2,000, respectively.  The increase in our
income tax amount was mainly attributable to our Canadian
operations.  We are currently in the process of restructuring our
Canadian operations and expect to decrease our future income tax liability in
Canada.




42




Results
of Operations




Year
ended December 31, 2008 compared to the year ended December 31,
2007




Sales of Marine
Petroleum Products.Sales of marine petroleum
products increased by $1,422.3 million, or 105.7%, to $2,768.1 million for the
year ended December 31, 2008, compared to $1,345.8 million for the year
ended December 31, 2007. Of the total increase in sales of marine petroleum
products, $933.0 million was attributable to an increase in sales volume of
marine fuel (using average prices for the year ended December 31, 2008),
$480.5 million was attributable to a 35.9% increase in the average price of
marine fuel (using sales volumes for the year ended December 31, 2007), and
$8.7 million was attributable to an increase in the sales of lubricants. Sales
volume of marine fuel increased by 1,762,987 metric tons, or 51.3%, to 5,200,256
metric tons for the year ended December 31, 2008, compared to 3,437,269
metric tons for the year ended December 31, 2007 due to additional volume
of sales of marine fuel inGreece, theUnited Arab Emirates,Singaporeand Northern Europe and due to sales in
our new markets: West Africa, Portland (U.K.), Vancouver, Montreal andMexico.




Gross Spread on
Marine Petroleum Products.Gross spread on marine
petroleum products increased by $71.3 million, or 79.5%, to $161.0 million for
the year ended December 31, 2008, compared to $89.7 million for the year
ended December 31, 2007. The increase in our gross spread on marine
petroleum products mainly resulted from the increased sales volume of marine
fuel. Our gross spread per metric ton of marine fuel sold during the year ended
December 31, 2008 increased by $4.8, or 18.5%, to $30.7 compared to $25.9
for the year ended December 31, 2007.  Gross spreads per metric
ton do not generally increase or decrease proportionately with the price of
marine fuel. Accordingly, gross spread on marine petroleum products, as a
percentage of total revenues, decreased from 6.6% for the year ended
December 31, 2007 to 5.8% for the year ended December 31,
2008.  Gross spread on marine petroleum products and gross spread per
metric ton of marine fuel sold are non-GAAP measures and should not be
considered as alternatives to operating income, net income or other GAAP
measures and may not be comparable to similarly titled measures of other
companies. Please refer to section entitled"Factors Affecting Our Results of
Operations"for a reconciliation of gross spread on
marine petroleum products to the most directly comparable GAAP
measure.




Voyage
Revenues.Voyage
revenues decreased by $4.4 million, or 75.9%, to $1.4 million for the year ended
December 31, 2008, compared to $5.8 million for the year ended
December 31, 2007. Voyage revenues for the year ended December 31, 2008
were attributable to the employment of our specialty tanker, Maistros, under the
contract of affreightment with Aegean Oil, which commenced on October 1, 2008.
Voyage revenues for the year ended December 31, 2007, were attributable to the
employment of our single hull Aframax tanker, Aegean Hellas, in the
international spot market. We sold Aegean Hellas to an unrelated third party on
April 17, 2007.




Salaries, Wages and
Related Costs.Salaries, wages and related
costs increased by $17.3 million, or 71.0%, to $41.7 million for the
year ended December 31, 2008, compared to $24.4 million for the year ended
December 31, 2007. This increase was mainly due to increased full-time
employees as we hired new employees to manage our expanded fleet and service
center network. Furthermore, crew costs increased as the average number of
operating bunkering vessels increased to 22.7 for the year ended
December 31, 2008, compared to 13.5 for the year ended December 31,
2007.




Depreciation.Depreciation increased by
$6.2 million, or 96.9%, to $12.6 million for the year ended
December 31, 2008, compared to $6.4 million for the year ended
December 31, 2007. This increase exceeded the 68.1% increase in the average
number of operating bunkering vessels due to the higher age and acquisition
costs of recently-acquired bunkering tankers, bunkering barges and floating
storage facilities.






Other Operating
Expenses.Other operating
expenses increased by $34.2 million, or 87.7%, to $73.2 million for
the year ended December 31, 2008, compared to $39.0 million for the year
ended December 31, 2007. This increase in other operating expenses was
primarily attributable to the following factors: higher cargo transportation
expenses, higher cost on marine fuel consumption, increased bunker vessel
expenses due to our expanded fleet, and increased overhead costs, mainly general
and administrative expenses of our new markets: West Africa, Portland (U.K.),
Vancouver, Montreal and Mexico.




Interest and Finance
Costs.Interest
and finance costs increased by $8.9 million to $12.4 million for the year ended
December 31, 2008, compared to $3.5million for the year ended
December 31, 2007. The increase in interest and finance costs was mainly attributable to
the financing of increased volume sales at a higher average price and the higher
debt outstanding relating to the financing of our newbuildings.


43




Year
ended December 31, 2007 compared to the year ended December 31,
2006




Sales of Marine
Petroleum Products.Sales of marine petroleum
products increased by $555.1million, or70.2%, to $1,345.8million forthe year ended December 31,
2007, compared to
$790.7million forthe year ended December 31,
2006. Of the total increase
in sales of marine petroleum products, $416.7million was attributable to an increase
in sales volume of marine fuel (using average prices forthe year ended December 31,
2007), $137.8million was attributable to a17.6% increase in the average price of
marine fuel (using sales volumes forthe year ended December 31,
2006), and $0.6million was attributable to an increase
in the sales of lubricants. Sales volume of marine fuel increased by1,069,980metric tons, or45.2%, to3,437,269metric tons forthe year ended December 31,
2007, compared to2,367,289metric tons forthe year ended December 31,
2006due to additional
volume of sales of marine fuel in Gibraltar, the United Arab Emirates,Jamaicaand Singaporeand due to sales of marine fuel in our
service center inNorthern
Europe, which commenced
physical supply operations onOctober 9, 2007. Our increased volume of sales in our
service centers is mainly attributable to improved market conditions. The
increase in the average price of marine fuel is primarily due to the increase in
worldwide oil and gas prices.




Gross Spread on
Marine Petroleum Products.Gross spread on marine
petroleum products increased by $27.7million, or44.7%, to $89.7million forthe year ended December 31,
2007, compared to
$62.0million forthe year ended December 31,
2006. The increase in our
gross spread on marine petroleum products mainly resulted from the increased
sales volume of marine fuel.Our gross spread per metric ton of
marine fuel sold duringthe
year ended December 31, 2007remained virtually unchanged at $25.9
compared to$26.0for the year ended December 31,
2006.The nominal change in our gross spreadper metric ton of marine
fuel sold wassignificantlylower than the increase of17.6% in the average price of marine fuel;
gross spreads per metric ton do not generally increase or decrease
proportionately with the price of marine fuel. Accordingly, gross spread on
marine petroleum products, as a percentage of total revenues, decreased from
7.7% forthe year ended December 31,
2006to6.6% forthe year ended December 31,
2007.  Gross
spread on marine petroleum products and gross spread per metric ton of marine
fuel sold are non-GAAP measures and should not be considered as alternatives to
operating income, net income or other GAAP measures and may not be comparable to
similarly titled measures of other companies. Please refer tosection entitled "Factors Affecting Our Results of
Operations"for a reconciliation of gross spread on
marine petroleum products to the most directly comparable GAAP
measure.




Voyage
Revenues.Voyagerevenuesdecreased by $5.8million, or50.0%, to $5.8million forthe year ended December 31,
2007, compared to
$11.6million for the year ended December 31, 2006. Thisdecreasewas mainly attributable tothe sale of our Aframax tanker, Aegean
Hellas, on April 17, 2007.




Salaries, Wages and
Related Costs.Salaries, wages and related costs increased by
$11.5million, or89.1%, to $24.4million forthe year ended December 31,
2007, compared to
$12.9million for the year ended
December 31,
2006. This increasewas mainly due to increased
full-time employees primarily at our Greek office as we hired new operational
employees to manage our expanded fleet and service center network and accounting
and finance staff to manage our increased reporting requirements as a public
company. Furthermore, crew costs increased as the averagenumber of operating bunkering tankers increasedto 13.5forthe year ended December 31,
2007, compared to11.1forthe year ended December 31,
2006. Furthermore,
increased crew costs included salaries of our crewon the floating storage
facilities,Ouranos and Leader, which
wereacquired during 2007, andof ourcrew onFos, which was acquired during the
latter half of 2006.




Depreciation.Depreciationincreasedby $2.2 million, or 52.4%, to
$6.4million forthe year ended
December 31, 2007,
compared to $4.2million forthe year ended December 31,
2006. This increase exceeded the 21.6% increase in the averagenumber of operating bunkering tankers due to the higher age and
acquisition costs ofrecently-acquired bunkering tankers and
floating storage facilities.




Other Operating
Expenses.Other operating
expenses increased by $13.3 million, or 51.8%, to $39.0 million for
the year ended December 31, 2007, compared to $25.7 million for the year
ended December 31, 2006. This increase in other operating expenses was
primarily attributable to the following factors: $6.3 million of the total
increase was attributable to the increase in the vessel operating costs of our
bunkering tankers, which include insurance policies, repairs and maintenance,
spares and consumable stores and consumption of marine petroleum products
and  $6.2 million of the total increase was attributable to the
increase in overhead costs, mainly general and administrative expenses of our
Greek office, our New York City office and our service centers, including costs
of complying
with our increased compliance and reporting requirements as a public company.
Furthermore, $4.5 million of the total increase was attributable to cargo
transportation costs which were not applicable during 2006. The above-mentioned
increases were offset by a $3.1 million decrease in the operating costs of our
recently-sold Aframax tanker as well as a decrease in storage costs of $0.6
million.




44






Interest and Finance
Costs.Interest and finance costsdeclined by $1.7 million to
$3.5million forthe year ended
December 31, 2007, compared to $5.2million forthe year ended December 31,
2006. Thedecreasein interest and finance costs was
mainly attributable tothe
repayment of a material portion of our debt outstanding following our initial
public offering on December 8, 2006.




Inflation




Inflation
has had only a moderate effect on our expenses given recent economic conditions.
In the event that significant global inflationary pressures appear, these
pressures would increase our operating costs.




B.           Liquidity
and capital resources




Our
treasury activities are controlled centrally by our treasury department, which
is located at our offices in Greece. Our treasury department administers our
working capital resources including our current accounts, time deposits,
overdrafts and bank loans. Our liquidity objective is to maintain an optimum
daily net cash position which takes into consideration immediate working capital
and operational requirements, as well as short- to medium-term capital
expenditure requirements, but which would not result in an unnecessary net cash
surplus. In this way we seek to maximize available cash to reinvest in our
business. Our policy is to minimize the use of time deposits, financial
instruments or other forms of investments which we believe generate lower levels
of return than the return on our invested capital.




Our
cash is primarily denominated in U.S. dollars because our sales of marine
petroleum products are fully denominated in U.S. dollars. Our service centers
pay their operating expenses in various currencies—primarily the Euro, the UAE
dirham, the Gibraltar pound, the British pound, the Canadian dollar, the
Jamaican dollar, and the Singapore dollar. Our treasury department transfers
cash to our service centers monthly on an as-needed basis and accordingly, we
maintain low levels of foreign currency at our service centers.




Under
the laws of jurisdictions where our subsidiaries are located, there are
currently no restrictions on the export or import of capital, including foreign
exchange controls or restrictions that materially affect the remittance of
dividends, loans, interest or other payments. Most of our vessel-owning
subsidiaries have long-term bank loans outstanding that were obtained to
partially finance the acquisition cost of their vessels. Most of these
vessel-owning companies are not permitted to pay any dividends without the
lender's prior consent. However, these vessel-owning companies generally do not
generate third-party revenues and do not possess material amounts of excess
cash. Therefore, these restrictions on our vessel-owning companies' ability to
pay dividends to us should not materially impact our ability to meet our cash
obligations. Accordingly, there are no significant restrictions on our ability
to access and mobilize our capital resources located around the
world.




We
have funded our business primarily through: (i) cash generated from
operations, (ii) equity capital and short-term borrowings from our
shareholders, (iii) short-term borrowings, and (iv) long-term bank
debt. We have a revolving credit facility that provides for borrowings up to
certain amounts for working capital purposes as well as a sublimit for the
issuance of standby letters of credit. Furthermore, we have long-term debt
facilities with several banks in order to partially finance the acquisition
costs of several of our vessels. The credit agreements for the long-term debt
facilities are secured with first priority mortgages over certain of our
vessels. As of December 31, 2008, we believe that we were in compliance in all
material respects with all covenants of our credit facilities. We also believe
that our working capital resources are sufficient for our present
requirements.




45






Credit
Facilities




As of
December 31, 2007 and 2008, we had the following outstanding
loans:




Loan
                                                  Date
                                                  
                                                  2007
                                                  
                                                  
                                                  2008(in
      millions of U.S. dollars)2008
      senior secured credit facility
                                                  September
      30, 2008
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  90.02007
      senior secured credit facility
                                                  December
      20, 2007
                                                  
                                                  
                                                  133.0
                                                  
                                                  
                                                  
                                                  -Secured
      term loan with respect to three vessels
                                                  July
      8, 2008
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  14.5Secured
      term loan with respect to four new buildings
                                                  April
      24, 2008
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  15.1Revolving overdraft credit facility
                                                  March
      11, 2008
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  -Secured
      syndicated term loan facility with respect to five
      newbuildings
                                                  July
      5, 2007
                                                  
                                                  
                                                  3.1
                                                  
                                                  
                                                  
                                                  6.6Secured
      syndicated term loan facility with respect to seven
      newbuildings
                                                  October 30,
      2006
                                                  
                                                  
                                                  11.5
                                                  
                                                  
                                                  
                                                  28.0Secured
      term loan facility with respect to two newbuildings
                                                  October 27,
      2006
                                                  
                                                  
                                                  4.5
                                                  
                                                  
                                                  
                                                  7.9Secured
      term loan facility with respect to three newbuildings
                                                  October 25,
      2006
                                                  
                                                  
                                                  3.8
                                                  
                                                  
                                                  
                                                  14.2Secured
      term loan facility under the 2006 senior secured
                                                    credit
      facility with respect to five newbuildings
                                                  December
      19, 2006
                                                  
                                                  
                                                  19.3
                                                  
                                                  
                                                  
                                                  31.0Secured
      syndicated term loan facility with respect to two
    newbuildings
                                                  October 26,
      2005
                                                  
                                                  
                                                  15.1
                                                  
                                                  
                                                  
                                                  16.0Secured
      syndicated term loan facility with respect to five
      newbuildings
                                                  August 30,
      2005
                                                  
                                                  
                                                  17.7
                                                  
                                                  
                                                  
                                                  30.3208.0
                                                  
                                                  
                                                  
                                                  253.6







The
following is a summary of terms, including operating and financial restrictions,
of our credit facilities.




Senior secured credit
facilities.





Senior secured credit
facility.  On March 16, 2009, with effect as of February
1, 2009, AMP renewed for a period of two years ended January 31, 2011 and
amended certain terms of the 2008 senior secured credit facility discussed
below.  We refer to the renewed and amended facility as our senior
secured credit facility.  Our senior secured credit facility is in an
uncommitted amount of up to $1.0 billion and may be used for working capital and
general corporate purposes.  Our senior secured credit facility had a
committed amount of up to $300.0 million, which decreased to $250.0 million on
March 31, 2009, consisting of a guarantee and/or letter of credit line in an
amount of up to $197.5 million and a cash advance limit in an amount of up to
$250.0 million, which decreased to $147.5 million and $208 million on March 31,
2009 respectively.  Our senior secured credit facility bears interest
at a rate of LIBOR plus a margin of 2.50%, while documentary and standby letters
of credit are subject to commissions of 0.75% and 1.50%,
respectively.





2008 senior secured credit
facility.  On September 30, 2008 AMP entered into a senior
secured syndicated revolver, guarantee and letter of credit facility with
international commercial lenders for an amount of up to $1.0 billion, for
working capital and general corporate purposes, or our 2008 senior secured
credit facility.  Our 2008 senior secured credit facility replaced our
2007 senior secured credit facility discussed below.  Our 2008 senior
secured credit facility had a committed amount of up to $420.0 million,
consisting of a guarantee and/or letter of credit line in an amount of up to
$310.0 million and a cash advance limit in an amount of up to
$320.0 million. The borrowings under our 2008 senior secured credit
facility bore interest at a rate of LIBOR plus a margin of
1.50%.  Documentary and standby letters of credit were subject to
commissions of 0.35%
and 0.75%, respectively. We replaced our 2008 senior secured credit facility
with our senior secured credit facility discussed above. 
 Our
senior secured credit facility is, and our 2008 senior secured credit facility
was, secured by, among other things:
  ●
              a
      first priority mortgage on our eleven of our double hull bunkering tankers
      and three floating storage facilities, or our mortgaged
      vessels;


46




●
            an
      assignment of all earnings, requisition compensation and insurance
      policies of our mortgaged vessels;




●
            charge
      over AMP's operating account;




●
            our
      corporate guarantee and guarantees of our vessel-owning subsidiaries
      acting as guarantors;




●
            the
      general assignment of trade receivables by us and our
      subsidiaries;




●
            floating
      charge on our inventories; and




●
            corporate
      guarantee of our vessel-owning subsidiaries acting as supplemental
      guarantors and undertakings to provide first priority mortgages if the
      lenders so request.




Both
of our senior secured credit facility and our 2008 senior secured credit
facility contain certain covenants requiring us to, among other
things:




●
            maintain
      our listing at the New York Stock
Exchange;




●
            ensure
      that our vessels are managed by Aegean Bunkering Services Inc. and
      that there is no change in their management without the lenders'
      consent;




●
            obtain
      and maintain an interest insurance policy and additional perils pollution
      insurance policies for 100% of the market value of our
      vessels;




●
            indemnify
      the lenders against the consequences of a pollution
    incident;




●
            ensure
      that there is no change of AMP's or our and our subsidiaries'
      business;




●
            have
      direct control of and own directly or indirectly 100% of the capital stock
      of vessel-owning subsidiaries acting as guarantors and additional
      guarantors;




●
            maintain
      minimum security of 120% of the outstanding facility
    amount;




●
            ensure
      that Mr. Melisanidis controls at least 26% of our
    shares;




●
            inform
      the lenders about any actual or proposed purchases;
  and




●
            provide
      the lenders with financial statements on a semi-annual and annual basis
      and such other information that the lenders may reasonably
      request.




Both
of our senior secured credit facility and our 2008 senior secured credit
facility also contain customary financial covenants requiring us and our
subsidiaries to, among other things, ensure that:




●
            our
      book net worth shall not be less than
  $175.0 million;




●
            our
      ratio of total liabilities to total assets shall not exceed 0.65-to-one;
      and




●
            we
      maintain additional free liquidity of $25.0 million held with the
      lender at the end of each month with average minimum daily free liquidity
      of $10.0 million.




Furthermore,
our senior secured credit facility requires us to ensure that our interest
coverage ratio is always higher than 1.3 times.






47


2007 senior secured credit
facility.  On December 20, 2007, AMP entered into a
syndicated overdraft, guarantee and letter of credit facility with international
commercial lenders, our 2007 senior secured credit facility, for working capital
and general corporate purposes. Our 2007 senior secured credit facility replaced
the guarantee and letter credit line portion of our 2006 senior secured credit
facility discussed below. Our 2007 senior secured credit facility in an amount
of up to $300.0 million, consisting of a guarantee and/or letter of credit
line in an amount of up to $150.0 million
and an overdraft facility in an amount of up to $150.0 million.
The borrowings under the overdraft facility bore interest at a rate of
LIBOR plus a margin of 1.25%.  Documentary and standby letters of
credit were subject to commissions of 0.25% and 0.625%, respectively. We
replaced our 2007 senior secured credit facility with our 2008 senior secured
credit facility discussed above.




2006 secured credit
facility.  On December 19, 2006, we entered into our
senior secured credit facility with an international commercial lender, or our
2006 senior secured credit facility. Our 2006 senior secured credit facility, as
amended, is in an amount of up to $248.4 million, consisting of a guarantee
and/or letter of credit line in an amount of up to $100.0 million,
revolving overdraft facility in an amount of up to $115.0 million and a
newbuilding facility to partially finance the acquisition of five of our new
bunkering tankers in an amount of up to $33.4 million (which was used to
refinance the secured term loan facility with respect to five newbuildings,
dated February 10, 2006, discussed below). The borrowings under the
guarantee and/or letter of credit line portion of the 2006 senior secured credit
facility bear interest at a rate of LIBOR plus a margin of 1.25% and documentary
and standby letters of credit are subject to commissions of 0.25% and 0.625%,
respectively.  The newbuilding facility bears interest at LIBOR plus a
margin of 1.15% plus additional compliance costs.  On December 21,
2007, we replaced the guarantee and/or letter of credit line and the overdraft
facility with the 2007 senior secured credit facility discussed
above.  We retained the newbuilding facility portion of the 2006
senior secured credit facility which will have a term of 12 years from
approximately the delivery date of each vessel.




As
of December 31, 2007, we had $133.0 million outstanding under our 2007
senior secured credit facility and $19.3 million outstanding under our 2006
senior secured credit facility.  As of December 31, 2008, we had $90.0
million outstanding under our 2008 senior secured credit facility and $31.0
million outstanding under our 2006 senior secured credit facility.




Secured term loan with respect to
three vessels. On July 8, 2008, we entered into a secured term loan
facility with a local bank for an amount of $15.0 million. The facility is
collateralized by a first priority mortgage over the vessels, Aegean III, Aegean
VIII and Aegean XII and bears interest at LIBOR plus 1.25%. The loan is
repayable in 20 equal consecutive quarterly installments plus a balloon payment
of $5.0 million payable with the last installment.




The
loan is collateralized by:




●
            a
      first priority mortgage over each of the
  vessels;




●
            a
      first priority pledge over the operating account of each of the three
      vessel-owning subsidiaries;




●
            assignments
      of earnings, insurances and requisition compensation of each of the
      mortgaged vessels; and




●
            our
      corporate guarantee.




The
loan agreement contains financial covenants requiring us to, among other things,
ensure that:




●
            market
      value adjusted net worth is not less than $175.0
  million;




●
            the
      minimum liquidity is not less than $25.0 million;
  and




●
            the
      ratio of total liabilities to total assets shall not exceed
      0.65-to-one.




Secured term loan with respect to
four newbuildings.  On April 24, 2008, we entered into a
syndicated secured term loan with an international bank for an amount of $38.8
million to partially finance the construction costs of the vessels QHS-225,
QHS-226, QHS-227 and QHS-228. Each of four tranches of $9.7 million is available
in two advances. Each tranche is repayable in 40 equal consecutive quarterly
installments plus a balloon payment of $4.3 million payable with the last
installment. The first installment of each tranche is repayable three months
after the date of drawdown of the respective delivery advance. The loan bears
interest at LIBOR plus 1.15% and is secured by the first priority mortgage on
the five vessels.




The
loan is collateralized by:




●
            a
      first priority mortgage over each of the
  vessels;




●
            assignments
      of earnings, insurances and requisition compensation of each of the
      mortgaged vessels; and




●
            our
      corporate guarantee.




48




The
loan agreement contains financial covenants requiring us to, among other things,
ensure that:




●
            book
      net worth shall not be less than $175.0
million;




●
            the
      ratio of total liabilities to total assets shall not exceed
      0.65-to-one;




●
            the
      current ratio shall not be less than 1.25-to-one;
  and




●
            cash
      and cash equivalents exceed 50% of all debts and interest becoming due in
      the next 12 month period, excluding working capital facilities and
      balloons.




As
of December 31, 2008, the outstanding balance of the loan was $15.1
million.




Revolving overdraft credit
facility.  On March 11, 2008, we entered into a one year,
annually-renewable revolving overdraft facility with a local bank in an amount
of $20.0 million. The facility bears interest at LIBOR plus
2.50%.  The facility is secured, among other things, by a first
priority mortgage over the vessels, Vera, Sara and Hope.  Furthermore,
the credit facility contains financial covenants requiring us, among other
things, to ensure that:





●
            our
      market adjusted consolidated book net worth shall not be less than
      $175.0 million;




●
            our
      ratio of total liabilities to total assets shall not exceed 0.65-to-one,
      and




●
            we
      maintain free liquidity of no less than
  $25.0 million.




As
of December 31, 2008, we had no amounts outstanding under this
facility.




Secured syndicated term loan
facility with respect to five newbuildings.    On
July 5, 2007, five of our vessel-owning subsidiaries, Andros
Marine Inc., Dilos Marine Inc., Ios Marine Inc., Sifnos
Marine Inc. and Tinos Marine Inc., as co-borrowers, jointly and
severally, entered into a secured credit facility for an aggregate amount of
$37.6 million with an international commercial bank to finance the
construction of five bunkering tankers, DN-3800-11, DN-3800-12, DN-3800-13,
DN-3800-14 and DN-3800-15, respectively. On September 12, 2008, we amended this
loan facility and increased the loan amount to $43.2 million.  The
amended loan bears interest at the rate of LIBOR plus 1.0%.  Under the
terms of the agreement, the borrowers may enter into
interest rate swap agreements to hedge their exposure to interest rate
risk.




The
loan is collateralized by:




●
            a
      first priority mortgage over each of the
  vessels;




●
            assignments
      of earnings, insurances and requisition compensation of each of the
      mortgaged vessels; and




●
            our
      corporate guarantee.




Our
corporate guarantee contains customary financial covenants requiring us to
ensure that:




●
            our
      book net worth shall not be less than
  $150.0 million;




●
            our
      ratio of total liabilities to total assets shall not exceed 0.65-to-one;
      and




●
            we
      maintain additional free liquidity of $25.0 million held with the
      lender at the end of each month with average minimum daily free liquidity
      of $10.0 million.




Furthermore,
we are required to maintain the listing of our shares on the New York Stock
Exchange and ensure that Mr. Melisanidis beneficially controls at least 35%
of our shares.




The
credit facility contains customary financial restrictions on the borrowers,
including restrictions on:




●
            the
      minimum value of the collateral;




●
            incurrence
      of debt; and




●
            payment
      of dividends.




49


The
facility, as amended, is available in five tranches of $8.6 million each.
Each tranche is repayable in 40 consecutive quarterly installments in the amount
of $216,000 each. The first installment of each tranche is repayable three
months after the date of drawdown of the final advance.  As of
December 31, 2007 and December 31, 2008, the outstanding balance under this loan
was $3.1 million and $6.6 million, respectively.




Secured syndicated term loan
facility with respect to seven newbuildings.    On
October 30, 2006, seven of our vessel-owning subsidiaries, Kerkyra Marine
S.A., Ithaki Marine S.A., Cephallonia Marine S.A., Paxoi Marine S.A., Zakynthos
Marine S.A., Lefkas Marine S.A. and Kythira Marine S.A., as co-borrowers,
jointly and severally entered into a syndicated secured credit facility for an
aggregate amount of $64.75 million with an international commercial bank to
finance the construction of seven double hull oil tankers, QHS 207, QHS 208, QHS
209, QHS 210, QHS 215, QHS 216, and QHS 217, respectively. The loan bears
interest at LIBOR plus 1.15% before delivery of each vessel and at LIBOR plus
1.05% after such vessel's delivery. Under the terms of the agreement, the
borrowers may enter into interest rate swap agreements to hedge their exposure
to interest rate risk.




The
loan is collateralized by:




●
            a
      first priority mortgage over each of the vessels, in favor of the
      lenders;




●
            a
      corporate guarantee by us and ASI as the holding company of the
      vessel-owning subsidiaries; and




●
            a
      manager's undertaking from ABS, as the management company of the
      vessels.




The
secured loan imposes certain operating and financial restrictions on the
borrowers, including restrictions on:




●
            the
      payment of dividends and the distribution of
  assets;




●
            the
      incurrence of debt;




●
            mergers
      and consolidations;




●
            changes
      in the business activities that are carried on;
  and




●
            changes
      in legal and/or ultimate beneficial ownership, provided that after the
      listing of our shares on the New York Stock Exchange, at least 35% of our
      shares at all times shall be beneficially owned by our then beneficial
      owners and our then beneficial owners may not beneficially own in the
      aggregate fewer of our shares than any other
  person.




The
facility is available in seven tranches of $9.25 million each. Each tranche
is repayable in 40 quarterly installments in the amount of $125,000 each, plus a
balloon payment of $4.25 million payable together
with the last installment. The first installment of each tranche is repayable
three months after the date of drawdown of the respective delivery
advance.  As of December 31, 2007 and December 31, 2008, the
balance on the loan was $11.5 million and $28.0 million,
respectively.




Secured term loan facility with
respect to two newbuildings.    On October 27,
2006, two of our vessel-owning subsidiaries, Tasman Seaways Inc. and Santon
Limited, as co-borrowers, jointly and severally, entered into a loan agreement
with an international commercial bank for a term loan facility in an aggregate
amount of $17.6 million to partially finance the construction costs of two
double hull tankers, QHS 221 and QHS 224, respectively. The facility bears
interest at LIBOR plus 1.15% on 70% of the principal amount and at LIBOR plus
1.25% on 30% of the principal amount.




The
loan is collateralized by:




●
            a
      first priority or first preferred ship mortgage over each of the vessels,
      in favor of the lenders;




●
            our
      corporate guarantee; and




●
            a
      manager's undertaking from ABS, as the management company of the
      vessels.




The
secured loan imposes certain operating and financial restrictions on the
borrowers, including restrictions on:




●
            the
      payment of dividends and the distribution of
  assets;




●
            the
      incurrence of debt;




50







●
            mergers
      and consolidations;




●
            changes
      in the business activities that are carried on;
  and




●
            changes
      in legal and/or ultimate beneficial ownership, provided that after the
      listing of our shares on the New York Stock Exchange, at least 35% of our
      shares at all times shall be beneficially owned by our then beneficial
      owners.




The
facility is available in two tranches of $8.8 million each. Each tranche is
repayable in 40 consecutive quarterly installments in the amount of $154,000
each, plus a balloon payment of $2.64 million payable together with the
last installment. The first installment of each tranche is repayable three
months after the date of delivery of the respective vessel. As of
December 31, 2007 and December 31, 2008, the balance on the loan was
$4.5 million and 7.9 million, respectively.




Secured term loan facility with
respect to three newbuildings.    On October 25,
2006, three of our vessel-owning subsidiaries, Eton Marine Ltd., Benmore
Services S.A. and Ingram Enterprises Co., as co-borrowers, jointly and severally
entered into a syndicated secured credit facility for an aggregate amount of
$26.25 million to partially finance the construction costs of three double
hull tankers, QHS 220, QHS 222 and QHS 223, respectively. This facility bears
interest at LIBOR plus 1.30% before delivery of each vessel and at LIBOR plus
1.1875% after such vessel's delivery.




The
loan is collateralized by:




●
            a
      first priority or first preferred ship mortgage over each of the vessels,
      in favor of the lenders;




●
            a
      corporate guarantee by us and Aegean Shipholdings Inc., or ASI, as the
      holding company of the vessel-owning
  subsidiaries;




●
            a
      manager's undertaking from ABS, as the management company of the vessels;
      and




●
            personal
      guarantee by a personal guarantor to be agreed upon by the
      lenders.




The
credit facility imposes certain operating and financial restrictions on the
borrowers, including restrictions on:




●
            the
      payment of dividends and the distribution of
  assets;




●
            the
      incurrence of debt;




●
            mergers
      and consolidations;




●
            changes
      in the business activities that are carried on;
  and




●
            changes
      in legal and/or ultimate beneficial ownership, provided that after the
      listing of our shares on the New York Stock Exchange, at least 35% of our
      shares at all times shall be beneficially owned by our then beneficial
      owners and our then beneficial owners may not beneficially own in the
      aggregate fewer of our shares than any other
  person.




The
facility is available in three tranches of $8.75 million each. Each tranche
is repayable in 40 quarterly installments in the amount of $125,000 each, plus a
balloon payment of $3.75 million payable together with the last
installment. The first installment of each tranche is repayable three months
after the date of drawdown of the respective delivery advance.  As of
December 31, 2007 and December 31, 2008, the balance on the loan was
$3.8 million and $14.2 million, respectively.




Secured term loan facility with
respect to five newbuildings.    On February 10,
2006, five of our vessel-owning subsidiaries, Milos Maritime Inc., Amorgos
Maritime Inc., Kimolos Maritime Inc., Mykonos Maritime Inc. and
Syros Maritime Inc., entered into a secured loan facility with an
international commercial bank for an aggregate amount of $33.4 million to
partially finance the construction costs of five double hull tankers, DN-3500-1,
DN-3500-4, DN-3500-5, DN-3500-6 and DN-3500-7, respectively. The loan bears
interest at LIBOR plus 1.15% plus additional compliance costs. The loan is
collateralized by a first priority mortgage over each of the
vessels.




Upon
the lender's demand, this facility may be collateralized by:




●
            a
      second priority mortgage over one of our vessels, Aegean
      Flower;




51




●
            a
      second priority undertaking and assignment to be executed by ABS in favor
      of the lender; and




●
            a
      corporate guarantee by one of our vessel-owning subsidiaries, Pontos
      Navigation Inc.




The
secured loan imposes certain operating and financial restrictions on the
borrowers, including restrictions on:




●
            payment
      of dividends and the distribution of
assets;




●
            incurrence
      of debt;




●
            the
      change in legal and/or ultimate beneficial ownership of shares of the five
      vessel-owning subsidiaries borrowing under this facility, Pontos
      Navigation Inc. and ABS;




●
            merger
      and consolidation;




●
            the
      acquisition of additional vessels;
and




●
            changes
      in the business activities that are carried
on.




The
facility is available in five tranches of $6.68 million
each.  Each tranche is repayable in 48 quarterly installments, first
47 in the amount of $140,000 and the last in the amount of
$100,000.  The first installment of each tranche is repayable three
months after the date of drawdown of the respective delivery
advance.  As of December 31, 2006, the balance on this facility
was $4.2 million. As of December 31, 2007 and December 31, 2008, no amounts
were outstanding under this credit facility, as it was replaced with the
newbuilding facility of our 2006 senior secured credit facility.




Secured syndicated term loan
facility with respect to two newbuildings.    On
October 26, 2005, as amended, two of our vessel-owning subsidiaries, Ocean
Dynamic Corp. and Sea Global S.A., as co-borrowers, jointly and severally,
entered into a syndicated secured credit facility for an aggregate amount of
Euro 13.3 million with an international commercial bank to finance the
construction of two specialty tankers. The loan bears interest at LIBOR plus
1.40% during each vessel's pre-delivery period and at LIBOR plus 1.30% during
each vessel's post-delivery period. Under the terms of the agreement, the
borrowers may enter into interest rate swap agreements to hedge their exposure
to interest rate risk.




The
loan is collateralized by:




●
            a
      first priority mortgage over each of the
  vessels;




●
            assignments
      of earnings, insurances and requisition compensation of each of the
      mortgaged vessels; and




●
            corporate
      guarantees of AMP, ABS and ASI and our corporate
  guarantee.




Our
corporate guarantee contains customary financial covenants requiring us to
ensure that:




●
            our
      book net worth shall not be less than $100.0 million;




●
            our
      ratio of total liabilities to total assets shall not exceed
      0.65-to-one;




●
            our
      ratio of current assets to current liabilities shall not be less than
      1.25-to-one; and




●
            our
      cash and cash equivalents exceed 50% of the debt service being due in the
      succeeding annual period.




Furthermore,
the loan agreement requires that we maintain the listing of our shares on the
New York Stock Exchange and under our corporate guarantee we are required to
ensure that Messrs. Melisanidis and Georgiopoulos and their families
control at least 35% of our shares and no other party holds a larger
share.




The
credit facility contains customary financial restrictions on the borrowers,
including restrictions on:




●
            the
      minimum value of the collateral;




●
            incurrence
      of debt; and




●
            payment
      of dividends.




52


The
facility is available in two tranches of Euro 6.65 million
each.  Each tranche is repayable in 40 quarterly installments, first
12 in the amount of Euro 150,000 and the remaining 28 in the amount of Euro
110,000, plus a balloon payment at the end of the term in the amount of Euro
1.77 million. As of December 31, 2007 and December 31, 2008, the
balance on the loan was $15.1 million (Euro 10.3 million) and
$16.0 million (Euro 11.5 million), respectively.




Secured letter of credit facility
with respect to two newbuildings.    Also on
October 26, 2005, two of our vessel-owning subsidiaries, Ocean Dynamic
Corp. and Sea Global S.A., as co-borrowers, jointly and severally, entered into
a secured letter of credit facility for an aggregate amount of Euro
12.3 million with an international commercial bank for the issuance of
standby letters of credit to the shipyard as a payment guarantee.




This
facility is collateralized by:




●
            a
      first priority charge on an interest bearing cash collateral account of
      the borrowers; and




●
            a
      corporate guarantee of AMP.




As
of December 31, 2007 and December 31, 2008, the balance on this letter of
credit facility was $10.2 million and $3.8 million,
respectively.




Secured syndicated term loan
facility with respect to five newbuildings.    On
August 30, 2005, as amended, five of our vessel-owning subsidiaries,
Kithnos Maritime Inc., Naxos Maritime Inc., Paros Maritime Inc.,
Santorini Maritime Inc. and Serifos Maritime Inc., as co-borrowers,
jointly and severally, entered into a syndicated secured credit facility for an
aggregate amount of $35.5 million with an international commercial bank to
finance the construction of five bunkering tankers DN-3500-3, DN-3500-10,
DN-3500-9, DN-3500-8 and DN-3500-2, respectively. The loan bears interest at
LIBOR plus 1.40% during each vessel's pre-delivery period and at LIBOR plus
1.30% during each vessel's post-delivery period. Under the terms of the
agreement, the borrowers may enter into interest rate swap agreements to hedge
their exposure to interest rate risk.




The
loan is collateralized by:




●
            a
      first priority mortgage over each of the
  vessels;




●
            assignments
      of earnings, insurances and requisition compensation of each of the
      mortgaged vessels; and




●
            corporate
      guarantees of ASI and ABS and our corporate
  guarantee.




Our corporate guarantee contains customary financial
covenants requiring us to ensure that:




●
            our
      book net worth shall not be less than
  $100.0 million;




●
            our
      ratio of total liabilities to total assets shall not exceed
      0.65-to-one;




●
            our
      ratio of current assets to current liabilities shall not be less than
      1.25-to-one; and




●
            our
      cash and cash equivalents exceed 50% of the debt service being due in the
      succeeding annual period.




Furthermore,
as corporate guarantor we are required to maintain the listing of our shares on
the New York Stock Exchange and ensure that Messrs. Melisanidis and
Georgiopoulos and their families control at least 35% of our shares and no other
party holds a larger share.




The
credit facility contains customary financial restrictions on the borrowers,
including restrictions on:




●
            the
      minimum value of the collateral;




●
            incurrence
      of debt; and




●
            payment
      of dividends.




The
facility is available in five tranches of $7.1 million
each.  Each tranche is repayable in 40 quarterly installments, first
30 in the amount of $120,000 and the remaining 10 in the amount of $110,000,
plus a balloon payment at the end
of the term in the amount of $2.4 million. As of December 31, 2007 and
December 31, 2008, the balance on the loan was $17.7 million and
$30.3 million, respectively.




53




Liquidity
and Uses of Cash




Cash
and cash equivalents, as of December 31, 2007 and 2008 amounted to $2.0
million and $46.9 million, respectively. The table below illustrates our
working capital and working capital excluding cash and debt as of
December 31, 2007 and 2008. Working capital is defined as current assets
less current liabilities.




The
marine fuel supply industry is capital intensive. The timing and levels of
operational cash flows are important aspects of our business. Our periodic cash
flows from operations are mainly dependent on our periodic working capital
excluding cash and debt. Accordingly, we use working capital excluding cash and
debt to monitor changes in our operational working capital accounts such as
trade receivables, inventories and trade payables, and to assess the current
strength and to predict the future state of our cash flows from operations. Our
periodic working capital excluding cash and debt is partly driven by our sales
volume growth rates for the relevant periods. As a result, the higher the sales
volume growth rates are, the larger the working capital investment needed to
purchase and sell the increased quantities of fuel. A larger working capital
investment decreases our operational cash flows for the relevant periods.
Furthermore, significant period-on-period movement in the average outstanding
days of our trade receivables, inventories and trade payables considerably
impacts our periodic working capital excluding cash and debt positions and our
operational cash flows. Finally, significant fluctuations in marine fuel prices
materially affect our periodic working capital excluding cash and debt. A
period-on-period increase in marine fuel prices increases the level of working
capital investment needed to purchase the same quantity of marine fuel.
Accordingly, we would have to increase our working capital investment at a
multiple of the increase in marine fuel prices in order to increase our sales
volumes.




As
      of December 31,2007
                    
                    
                    2008(in
      thousands of U.S. dollars)Working
      capital
                    
                    
                    63,529
                    
                    
                    
                    49,365Working
      capital excluding cash and debt
                    
                    
                    190,212
                    
                    
                    
                    100,158




During
the year ended December 31, 2008, our working capital, excluding cash,
restricted cash and debt, decreased to $100.2 million as compared to $190.2
million as of December 31, 2007.  At the same time, our working
capital, defined as current assets minus current liabilities, position as of
December 31, 2008 declined to $49.4 million from $63.5 million a year
ago.  These decreases were primarily attributable to higher earnings
and a decrease in the price of marine petroleum products during the last quarter
of 2008.




We
primarily use our cash to fund marine petroleum product purchases for resale to
our customers. Except for transactions with our related company, Aegean Oil, in
which we usually have been extended unsecured trade credit, we obtain secured
trade credit from our suppliers against a standby letter of credit. In certain
cases, we purchase quality marine petroleum products from certain suppliers at
discounted prices with cash on or near delivery. Our ability to fund marine
petroleum product purchases, obtain trade credit from our suppliers, and provide
standby letters of credit is critical to the success of our business. Increases
in oil prices negatively impact our liquidity by increasing the amount of cash
needed to fund marine petroleum product purchases as well as reducing the volume
of marine petroleum products which can be purchased on a secured credit basis
from our suppliers.




We
also use our cash to fund the acquisition or construction costs of vessels as
well as to fund the maintenance cost of these vessels. The following table
illustrates the cash paid for the acquisition and construction of vessels and
the cash paid for drydocking of our vessels, for the years ended
December 31, 2006, 2007 and 2008.




54




Year
      Ended December 31,2006
                                                          
                                                          
                                                          2007
                                                          
                                                          
                                                          2008(in
      thousands of U.S. dollars)Payments
      for net vessel acquisitions
                                                          
                                                          
                                                          21,995
                                                          
                                                          
                                                          
                                                          66,217
                                                          
                                                          
                                                          
                                                          21,665Payments
      for vessel construction
                                                          
                                                          
                                                          35,396
                                                          
                                                          
                                                          
                                                          55,529
                                                          
                                                          
                                                          
                                                          116,990Payments
      for drydocking
                                                          
                                                          
                                                          10,637
                                                          
                                                          
                                                          
                                                          3,186
                                                          
                                                          
                                                          
                                                          6,890




Payments for vessel acquisitions will
continue in the coming years due to our existing commitments on our newbuilding
contracts. As of December 31, 2008, one of the 21 bunkering tankers on order has
a total construction cost of $8.4 million, seven have a total construction cost
of $11.6 million each, four have a total construction cost of $11.0 million
each, five have a construction cost of $9.6 million each, and the remaining four
have a construction cost of $10.6 million each.  Except for the latter
nine contracts (whose supervision contracts have not been signed yet), these
costs include newbuilding contracts with the shipyards as well as supervision
contracts. Our specialty tanker had an estimated total construction cost of Euro
11.0 million, which included the newbuilding and the supervision contracts. The
construction costs of both the bunkering tankers and the specialty tanker are
payable in milestones over the duration of the construction of these vessels.
The payment schedules for these newbuilding contracts for the bunkering tankers
for 2009 and 2010 are$107,653 and $25,330, respectively.




Currently, we intend to purchase only
secondhand double hull bunkering tankers, which are generally more costly than
secondhand single hull bunkering tankers. Payments for drydocking are also
expected to increase, mainly due to the increased number of vessels in our
fleet.




It
is our intention to fund the remaining capital commitments on our newbuilding
contracts using cash on hand and existing long-term bank debt and using cash
flow from operations. We intend to fund our growth strategy, which may include
further acquisitions of additional vessels or investments in other
energy-related projects using either cash on hand and cash flow from operations
or new long-term bank debt.




We
anticipate that assuming market conditions are consistent with our historical
experience, cash on hand, internally generated cash flow and borrowings under
our credit facilities will be sufficient to fund our business, including our
working capital requirements. While we do not currently intend to do so, in the
future we may consider raising funds through additional equity or debt
offerings, depending on our future business plans.




Our
beliefs, intentions, plans and expectations concerning liquidity and our ability
to obtain financing are based on currently available information. To the extent
this information proves to be inaccurate, or if circumstances change, future
availability of trade credit or other sources of financing may be reduced and
our liquidity would be adversely affected. Factors that may affect the
availability of trade credit, or other financing, include our performance, the
state of worldwide credit markets, and our levels of outstanding debt. In
addition, we may decide to raise additional funds to respond to competitive
pressures or changes in market conditions, to fund future growth, or to acquire
vessels. We cannot guarantee that financing will be available when needed or
desired, or on terms favorable to us.




Cash
Flow




Net
Cash Provided By Operating Activities




Net cash provided by operating
activitieswas$136.7million for the year ended
December 31, 2008
ascompared tonet cash used in operating activities of$128.1million for 2007.This increase was primarily attributable
to higher earnings and a reduction in working capitalas a result of the decrease in the
price of marine petroleum products during the last quarter of 2008.  Working capital excluding
cash and debt decreased by $90.0 million, to a surplus of $100.2 million as of
December 31, 2008 compared toa surplus of $190.2million as of December 31,
2007.




Net
cash used in operating activities was $128.1 million for the year ended
December 31, 2007 as compared to net cash provided by operating activities of
$17.1 million for the year ended December 31, 2006. This decrease in
period-over-period cash flow was primarily attributable to changes in working
capital during the year ended December
31, 2007. The increase in working capital excluding cash and debt during the
year ended December 31, 2007 was due to a significant increase in sales of
marine petroleum products during the period.




55




Net
Cash Used In Investing Activities




Net
cash used in investing activities was $135.7 million for the year ended December
31, 2008. During the period, we paid $117.0 million as milestone payments under
our newbuilding and engineering contracts and we paid $21.7 million mainly to
acquire the secondhand vessels, Aegean III, Aegean VIII, Aegean XII and Aegean
Ace. Furthermore, we paid net cash consideration of $9.1 million for our
acquisitions of ICS Petroleum Ltd. During 2008, our restricted cash balances
decreased by $12.6 million which increased our cash flows by the same
amount.




Net
cash used in investing activities was $124.7 million for the year ended
December 31, 2007. During the period, we paid $55.5 million as milestone
payments under our newbuilding and engineering contracts and we paid
$66.2 million to acquire the secondhand tankers, Ouranos, Aegean Princess,
Hope, Leader, Vera and Sara. Furthermore, we paid net cash consideration of $5.7
million for our acquisitions of Bunkers at Sea and Portland Bunkers
International Limited. During 2007, we received $8.3 million in net
proceeds upon the sale of Aegean Hellas to an unrelated third
party.  Finally, during 2007, our restricted cash balance increased by
$5.1 million which reduced our cash flows by the same amount.




Net
Cash Provided by Financing Activities




Net
cash provided by financing activities was $43.9 million for the year ended
December 31, 2008 mainly due to additional drawdowns of $93.6 million under our
term loan facilities to finance a portion of the construction costs of our new
vessels.  Part of this increase in funding was offset by repayments of
long-term debt of $4.1 million and $43.0 million in payments to reduce
short-term borrowings.  Furthermore, during the year ended December
31, 2008, we declared and paid dividends of $1.7 million to our
shareholders.




Net
cash provided by financing activities was $172.4 million for the year ended
December 31, 2007 mainly due to additional drawdowns of $41.8 million under
our term loan facilities to finance a portion of the construction costs of our
new vessels, and we drew down $133.0 million under our senior secured credit
facility primarily to finance working capital requirements. Furthermore, during
the year ended December 31, 2007, we declared and paid dividends of
$1.7 million to our shareholders.




C.           Research
and development, patents and licenses, etc.




Not
applicable.




D.           Trend
information.




During
the year ended December 31, 2008, our sales volume of marine fuel increased by
51.3% as compared to the prior year, which was mainly due to sales in our new
markets: West Africa, Portland (U.K.), Vancouver, Montreal and
Mexico.  We have also expanded our bunkering fleet by taking
delivery of six double-hull bunkering tanker newbuildings and acquiring three
secondhand double-hull bunkering tankers and two single-hull bunkering barges in
2008.  We expect our growth to continue in 2009 as we expand
our business and marine fuel delivery capabilities in existing markets and enter
new markets.  We expect to commence operations in Tangiers, Morocco
and Trinidad and Tobago in the second quarter of 2009 and expand our fleet by at
least 19 new double hull bunkering tankers, for which we have firm orders,
during the next two years, and may purchase additional secondhand vessels in the
future.




In
addition to our bunkering operations, we market and distribute marine lubricants
under the Alfa Marine Lubricants brand. In February 2009, we entered into an
agreement to join the Sealub Alliance Network, a group recently formed by Gulf
Oil Marine Ltd. to collaborate in the marketing and distribution of marine
lubricants.  We expect the sales volumes of lubricants to increase in
2009.




In
2008, we have employed our specialty tanker, Maistros, under a contract of
affreightment with Aegean Oil for the distribution of gasoline and other refined
petroleum products in the Greek islands.  With the delivery of our
second specialty tanker, Ostria, we expect our voyage revenues to increase in
2009.




Our
success in attracting business has been due, in part, to our willingness to
extend trade credit on an unsecured basis to our customers after suitable credit
analysis of them.  The recent adverse changes in world credit markets
may adversely affect our ability to do business with customers whose
creditworthiness may no longer meet our criteria.  Volatily in the price of
marine fuel and lubricants may also affect our working capital
requirements.




56




E.           Off-balance
sheet arrangements.




We
do not have any off-balance sheet arrangements.




F.           Tabular
disclosure of contractual obligations.




Contractual
Obligations and Commercial Commitments






The
following table sets forth our contractual obligations and commercial
commitments as of December 31, 2008:




Within
                                                                  One
      Year
                                                                
                                                                
                                                                One
      to
                                                                  Three
      Years
                                                                
                                                                
                                                                Three
      to
                                                                    Five
      Years
                                                                
                                                                
                                                                More
      than Five Years
                                                                
                                                                
                                                                Total(in
      millions of U.S. dollars)Long-term
      bank debt (excluding interest)
                                                                
                                                                
                                                                9.4
                                                                
                                                                
                                                                
                                                                24.9
                                                                
                                                                
                                                                
                                                                29.3
                                                                
                                                                
                                                                
                                                                100.0
                                                                
                                                                
                                                                
                                                                163.6Interest
      on long-term bank debt (1)
                                                                
                                                                
                                                                7.0
                                                                
                                                                
                                                                
                                                                13.0
                                                                
                                                                
                                                                
                                                                11.1
                                                                
                                                                
                                                                
                                                                19.7
                                                                
                                                                
                                                                
                                                                50.8Minimum
      purchase commitments (2)
                                                                
                                                                
                                                                23.2
                                                                
                                                                
                                                                
                                                                46.4
                                                                
                                                                
                                                                
                                                                46.4
                                                                
                                                                
                                                                
                                                                29.0
                                                                
                                                                
                                                                
                                                                145.0Newbuilding
      contracts—bunkering tankers
                                                                
                                                                
                                                                99.0
                                                                
                                                                
                                                                
                                                                25.3
                                                                
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                124.3Secondhand–bunkering
      tankers
                                                                
                                                                
                                                                2.3
                                                                
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                2.3Newbuilding
      contracts—specialty tankers
                                                                
                                                                
                                                                6.4
                                                                
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                6.4Total
                                                                
                                                                
                                                                147.3
                                                                
                                                                
                                                                
                                                                109.6
                                                                
                                                                
                                                                
                                                                86.8
                                                                
                                                                
                                                                
                                                                148.7
                                                                
                                                                
                                                                
                                                                492.4





(1)
            Our long-term bank debt
      outstanding as of December 31, 2008 bears variable interest at margin over
      LIBOR. The calculation of variable rate interest payments is based on an
      actual weighted average rate of 4.35% for the year ended December 31,
      2008, adjusted upward by 10 basis points for each year
      thereafter.




(2)
            In the normal course of business,
      we have entered into long-term contracts with reputable suppliers such as
      government refineries or major oil producers. The contractual commitments
      set forth in the above table include the minimum purchase requirements in
      our contract with Aegean Oil. The minimum purchase requirements provided
      for in our contract with Aegean Oil have been calculated by multiplying
      the minimum monthly volumes of marine fuel specified in the contract by an
      indicative market price based on quoted PLATTS prices as of December 31,
      2008.




Critical
      Accounting Policies




The
discussion and analysis of our financial condition and results of operations is
based upon our consolidated financial statements, which have been prepared in
accordance with U.S. GAAP. The preparation of such financial statements requires
us to make estimates and judgments that affect the reported amounts of assets
and liabilities, revenues and expenses and related disclosure of contingent
assets and liabilities at the date of our financial statements. Actual results
may differ from these estimates under different assumptions and
conditions.




Critical
accounting policies are those that reflect significant judgments of
uncertainties and potentially result in materially different results under
different assumptions and conditions. We have described below what we believe to
be our most critical accounting policies, because they generally involve a
comparatively higher degree of judgment in their application. For a description
of all our significant accounting policies, see Note 2 to our consolidated
financial statements included herein.




Trade
Receivables and Allowance for Doubtful Accounts




We
extend credit on an unsecured basis to many of our customers. There is
uncertainty over the level of uncollectibility of customer accounts. Our
management is responsible for approving credit limits above certain amounts,
setting and maintaining credit standards, and managing the overall quality of
our credit portfolio. We perform ongoing credit evaluations of our customers and
adjust credit limits based upon payment history and the customer's current
credit worthiness. Accounts receivable are deemed past due based on contractual
terms agreed with our customers.




We
continuously monitor collections and payments from our customers and maintain a
provision for estimated credit losses based upon our historical experience with
our customers, current market and industry conditions of our customers,
and any specific customer collection issues that we have identified. Accounts
and notes receivable are reduced by an allowance for amounts that may become
uncollectible in the future. At the end of each reporting period, we calculate
an allowance for doubtful accounts based on an aging schedule where we apply set
percentages to categories of overdue trade receivables. These set percentages
are based on historical experience and currently available management
information on customer accounts. Furthermore, we provide appropriate allowances
for any specific customer collection issue we identify which allowance is
calculated on a case-by-case basis. Trade receivables are written off when it
becomes apparent based upon age or customer circumstances that such amounts will
not be collected.




57




We
believe the level of our allowance for doubtful accounts is reasonable based on
our experience and our analysis of the net realizable value of our trade
receivables during each reporting period. The estimates driving the calculation
of our allowance for doubtful accounts have not changed in the past periods and
we do not expect these estimates to change in the foreseeable future because
they have resulted and we believe that they will continue to result in accurate
calculations of our allowance for doubtful accounts. We cannot guarantee that we
will continue to experience the same credit loss rates that we have experienced
in the past, since adverse changes in the marine industry or changes in the
liquidity or financial position of our customers could have a material adverse
effect on the collectability of our trade receivables and our future operating
results. If credit losses exceed established allowances, our results of
operations and financial condition may be adversely affected.




Depreciation




We
record the value of our vessels at their cost (which includes acquisition costs
directly attributable to the vessel and expenditures made to prepare the vessel
for its initial voyage) less accumulated depreciation. We depreciate our vessels
on a straight-line basis over their estimated useful lives. Depreciation is
based on cost less the estimated residual scrap value.




We
estimate the useful lives for our bunkering tankers to be 30 years from
date of initial delivery from the shipyard.  Furthermore, we estimate
the useful life of our floating storage facilities to be 30 years from the date
of acquisition. We estimate the residual scrap values of our vessels to be $175
per light-weight ton. We form these estimates based on our experience and the
prevailing practices of other companies in the bunkering and shipping
industries.




An increase in the estimated useful life
of a tanker or in its estimated residual value would have the effect of
decreasing the annual depreciation charge and extending it into later periods. A
decrease in the estimated useful life of a tanker or in its estimated residual
value would have the effect of increasing the annual depreciation charge. A 20%
decrease in the remaining estimated useful lives of our vessels would increase
our depreciation charge for the year ended December 31, 2008by $3.1million.




Estimates
may need to be changed if new regulations place limitations over the ability of
a vessel to trade on a worldwide basis. This would cause us to adjust the
vessel's useful life to end at the date such regulations become
effective.




Our
estimates of the useful lives of our vessels and of the residual scrap values of
our vessels have not changed in the past periods. We do not expect these
estimates to change in the foreseeable future because we believe they will
continue to accurately represent the useful lives of tanker vessels and the
long-term scrap values of steel.




Impairment
of Long-lived Assets




We
evaluate the carrying amounts of our long-lived assets to determine if events
have occurred which would require modification to their carrying values. In
evaluating useful lives and carrying values of long-lived assets, we review
certain indicators of potential impairment, such as vessel sale and purchase
prices in the marketplace, business plans and overall market conditions. If an
indicator of impairment exists, we determine undiscounted projected net
operating cash flow for each vessel or group of vessels and compare it to the
relevant carrying value. In the event that undiscounted projected net operating
cash flows were less than carrying value, we would estimate the fair value of
the related asset and record a charge to operations calculated by comparing the
asset's carrying value to the estimated fair value. When performing impairment
assessments, management would generally consider vessel valuation reports
obtained from third-party valuation specialists.




58




Deferred Drydock Cost




Our
vessels are generally required to be drydocked approximately every 30 to
60 months for major repairs and maintenance that cannot be performed while
the vessels are operating. We capitalize the costs associated with drydockings
as they occur and amortize these costs on a straight-line basis over the period
between drydockings. Costs capitalized as part of the drydocking include actual
costs incurred at the drydock yard and parts used in making such repairs that
are reasonably made in anticipation of reducing the duration or cost of the
drydocking; cost of travel, lodging and subsistence of our personnel sent to the
drydocking site to supervise; and the cost of hiring a third party to oversee a
drydocking. We believe that these types of capitalized costs are consistent with
practice among other companies in our industry that apply this method of
accounting and that our policy of capitalization reflects the economics and
market values of the vessels.




Although
many companies in our industry apply this method of accounting for deferred
drydock costs, some companies apply other methods of accounting, such as
expensing drydock costs as incurred. If we were to adopt that method of
accounting as our accounting policy, our drydock costs would have been as
disclosed under the heading "As Incurred" in the table below, for the periods
presented therein.




AverageNumber
      ofVessels
                    Drydock
      CostsYear
      Ended December 31,
                    Bunkering
                    Non-bunkering
                    As
      Reported
                    As
      Incurred(in
      thousands of U.S. dollars)2006
                    11.1
                    1.3
                    1,684
                    10,6372007
                    13.5
                    1.7
                    3,172
                    3,1862008
                    22.7
                    4.8
                    3,640
                    6,890


The
table above discloses the average number of vessels that we have owned in each
of the periods presented and the drydock costs that we have reported. In the
future, depending on the date a newly-purchased secondhand vessel is drydocked
prior to its delivery to us, we may pay drydocking costs and incur subsequent
amortization expense of these costs sooner after delivery than if the vessel had
been owned by us throughout its life. This would increase our average drydocking
expenses in periods immediately following the acquisition.




Following
acquisition of vessels under newbuilding contracts, we would expect to first pay
drydocking costs and incur subsequent amortization expense of these costs
approximately 30 months after the delivery of the vessel from the shipyard.
This would decrease our average drydocking expenses in periods immediately
following the acquisition since we would have no such costs to amortize in
respect of these vessels until they were first drydocked.




G.           Safe
harbor




Forward-looking
information discussed in this Item 5 includes assumptions, expectations,
projections, intentions and beliefs about future events. These statements are
intended as "forward-looking statements." We caution that assumptions,
expectations, projections, intentions and beliefs about future events may and
often do vary from actual results and the differences can be material. Please
see "Cautionary Statement Regarding Forward-Looking Statements" in this
report.






ITEM
6.                   DIRECTORS,
SENIOR MANAGEMENTAND EMPLOYEES




A.           Directors
and Senior management




Set
forth below are the names, ages and positions of our current directors and
executive officers. Our board of directors is elected annually on a staggered
basis, and each director holds office until his successor has been duly elected,
except in the event of his death, resignation, removal or the earlier
termination of his office.




Name
            Age
            PositionPeter
      C. Georgiopoulos
            48
            Chairman
      of the Board, Class B DirectorYiannis
      N. Papanicolaou
            57
            Class
      A Director





Konstantinos
      D. Koutsomitopoulos
              41
              Class
      A DirectorJohn
      P. Tavlarios
              47
              Class
      B DirectorSpyridon
      Fokas
              54
              General
      Counsel and Corporate Secretary, Class B DirectorAbel
      L. Rasterhoff
              69
              Class
      C Director
   59
  Name
              Age
              PositionGeorge
      Konomos
              70
              Class
      C DirectorE. Nikolas
      Tavlarios
              46
              PresidentDimitris
      Melisanidis
              58
              Head
      of Corporate DevelopmentSpyros
      Gianniotis
              48
              Chief
      Financial OfficerGregory
      Robolakis
              50
              General
      Manager, Aegean Marine Petroleum S.A.Nikolas
      Hondos
              55
              General
      Manager, Aegean Bunkering Services
Inc.


_______________


The
business address of each of our executive officers and directors is 42
Hatzikyriakou Avenue, Piraeus 185 38 Athens, Greece.




Our
board of directors is divided into three classes, as nearly equal in number as
possible, with each director serving a three-year term and one class being
elected at each year's annual meeting of shareholders. Class A Directors'
term expires in 2010.  Class B Directors' term expires in 2011.
Class C Directors' term expires in 2009.




Certain
biographical information about each of these individuals is set forth
below.




Peter C. Georgiopoulos has
been the Chairman of our board of directors since December 2006. Since 1997,
Mr. Georgiopoulos has served as Chairman, President, Chief Executive
Officer of General Maritime, a publicly-traded tanker company with shares listed
on the New York Stock Exchange. Mr. Georgiopoulos is also Chairman of the Board
of Genco Shipping & Trading Limited, a public drybulk shipping company whose
shares are listed on the New York Stock Exchange, and a member of the Board of
Directors of Atlantis Deepwater Technology Holding AS, a Norwegian offshore
drilling technology company. From 1991 to 1997, Mr. Georgiopoulos was the
principal of Maritime Equity Management, a vessel-owning and investment company
which he founded in 1991. Mr. Georgiopoulos is a member of the American
Bureau of Shipping. Mr.  Georgiopoulos holds a master's degree in business
administration from the Tuck School of Business at Dartmouth College, and is a
member of the Board of Overseers of the Tuck School.




Yiannis N. Papanicolaou has
served as a member of our board of directors and the chairman of the
compensation committee and a member of the audit committee since December 2006.
Since 2004, Mr. Papanicolaou has been an independent consultant to various
companies. From 1998 to 2004, Mr. Papanicolaou has served as Director
General of the International Center for Black Sea Studies and from 1997 to 2005
as Alternate Governor of Greece at the Black Sea Trade and Development Bank.
Between 1989 and 1996, Mr. Papanicolaou was employed as an independent
consultant to various companies. Prior to that, Mr. Papanicolaou had a
career in government where he served, among other positions, as Chief Economic
Advisor to the Prime Minister of Greece, Chairman of the Council of Economic
Advisors to the Ministry of National Economy and Special Advisor to the Minister
of Foreign Affairs of the Hellenic Republic. Mr. Papanicolaou has studied
economics at the National University of Athens, the London School of Economics
and the London Graduate School for Business Studies.




Konstantinos D.
Koutsomitopoulos has served as a member of our board of directors since
May 2008 and as a member of the compensation and nominating and corporate
governance committees. Mr. Koutsomitopoulos currently serves as an independent
consultant to various companies. From October 2004 to May 2007, Mr.
Koutsomitopoulos was employed at Diana Shipping Inc., a publicly traded company
with shares listed on the New York Stock Exchange. While at Diana, he served as
President and Head of Corporate Development from March 2006 to May 2007, and as
Chief Financial Officer and Treasurer from February 2005 to March 2006. Mr.
Koutsomitopoulos joined Pegasus Shipping Inc. in 1992. From 1997 to 2003, he was
responsible for chartering, sales and purchasing and assisting in financing
activities of the company, holding the positions of Chief Executive Officer and,
subsequently, Director. Mr. Koutsomitopoulos holds a bachelor's degree in
economics from the University of Athens and a master's degree in shipping, trade
and finance from City University Business School in London.





John P. Tavlarios has served
as a member of our board of directors since December 2006. Mr. Tavlarios
served as Executive Vice President of General Maritime from its inception in
1997 until January 2000, and President and Chief Operating Officer of
General Maritime from May 2001 until December 31, 2002. Following an
internal reorganization of General Maritime, which took effect at the close of
business on December 31, 2002, he became Chief Executive Officer of its
tanker operating subsidiary, General Maritime Management LLC. From 1995 to 1997,
he was affiliated with Maritime Equity Management, a vessel-owning and
investment company, where Mr. Tavlarios served as Director of Marine
Operations. From 1992 to 1995,
Mr. Tavlarios was President and founder of Halcyon Trading Company, a
consulting firm specializing in international business development with a
particular emphasis on the international oil industry. From 1984 to 1992, he was
employed by Mobil Oil Corporation, spending most of his tenure in the Marine
Operations and the Marketing and Refining divisions. Prior to 1984,
Mr. Tavlarios was involved in his family's shipping business, assisting in
marine operations. Mr. Tavlarios is a member of the American Bureau of
Shipping, the Det Norske Veritas North American Committee, the Skuld board of
directors, the Directors Committee and the North American Panel of INTERTANKO,
the organization of independent tank owners and on the Board of Trustees of the
Seaman's Church Institute. Mr. Tavlarios is also a director of General
Maritime. Mr. Tavlarios holds a master's degree in business administration
from St. John's University. Mr. Tavlarios is the brother of
Mr. E. Nikolas Tavlarios.






60






Spyridon Fokas has been a
member of our board of directors since June 2005. Mr. Fokas has also
served as our General Counsel and as our Corporate Secretary since
June 2005. Mr. Fokas currently is an attorney at S. Fokas – B.
Koumbiadou Law Offices. Mr. Fokas has been practicing maritime law since 1982
and has represented our Company since 1998. Mr. Fokas is a member of the
Greek Maritime Law Association and the Hellenic Society of Maritime Lawyers.
Mr. Fokas holds a law degree from the University of Athens School of Law
and has undertaken post-graduate studies in shipping law at the University
College London.




Abel L.
Rasterhoff  has served as a member of our board of directors
and as the chairman of our nominating and corporate governance committee and a
member of our audit committee since December 2006. Mr. Rasterhoff has also
served as a member of the compensation committee since February
2007.  Mr. Rasterhoff is also a director of Capital Product Partners,
L.P., a company quoted on the Nasdaq Global Market, and President of the
national Netherlands-England Society. From 2004 to 2005, Mr. Rasterhoff served
on the supervisory board of Stichting Garantiefonds Reisgelden in the
Netherlands and as an advisor to the TUI Nederland Pension Fund. Mr. Rasterhoff
was a Member of the Executive Board and Chief Financial Officer of TUI
Nederland, the largest Dutch tour operator, from 2001 to 2004 and from 1998 to
2000. He also served on the Executive Board of Connexxion, the government owned
public transport company, on an interim basis for six months in 2001. From 1991
to 1997, Mr. Rasterhoff was a Director and Vice President, Finance and Planning,
for Shell International Trading and Shipping Company Limited. During this period
he also served as a Board Member of the Securities and Futures Authority (SFA)
in London. In 1997, Mr. Rasterhoff retired after a 30-year career at various
Royal Dutch Shell companies, where he was extensively involved in the shipping
industry. From 1981 to 1984, Mr. Rasterhoff was Managing Director of Shell
Tankers B.V., Vice Chairman and Chairman-elect of the Dutch Council of Shipping
and a Member of the Dutch Government Advisory Committee on the North Sea. Mr.
Rasterhoff holds a graduate degree in business economics from the University of
Groningen in the Netherlands.




George Konomos has served as
a member of our board of directors and as the chairman of our audit committee
since November 2008. Currently, Mr. Konomos is a Senior Advisor with Latigo
Partners L.P., an alternative asset manager and serves on the Board of Directors
of General Maritime Corporation. From 2000 to 2005, Mr. Konomos was the
Co-Portfolio Manager at Mellon-HBV Rediscovered Opportunities Fund. Mr. Konomos'
experience prior to joining Mellon-HBV includes 11 years as an Investment
Manager at Baker Nye Investments, service as a senior advisor to the World Bank
on privatizations and financial restructurings of state-owned companies and a
14-year career in investment banking at Lehman Brothers and Samuel Montague
& Co. Mr. Konomos holds a bachelor's degree in economics from the University
of Arizona, a master's degree in economics from American University and a juris
doctor degree from George Washington University Law School.




E. Nikolas Tavlarios has
served as our President since December 2006. From 2003 to 2006,
Mr. Tavlarios served as Vice President of General Maritime Management LLC,
a tanker operating subsidiary of General Maritime where he oversaw business
development and maintained relationships with commercial representatives of
major oil companies. From 2000 to 2003, Mr. Tavlarios was Vice President of
Sales and Administration at Universal Services Group. From 1998 to 2000,
Mr. Tavlarios served as Executive Director of Rockefeller Center for
Tishman Speyer Properties.
Prior to 1998, Mr. Tavlarios was a Surveyor for the American Bureau of
Shipping. Mr. Tavlarios is a member of the American Bureau of Shipping and of
the Det Norske Veritas (DNV) North American committee. Mr. Tavlarios holds
a bachelor's degree in marine transportation from State University of New York
Maritime College and a master's degree in business administration from
St. John's University. Mr. Tavlarios is the brother of John P.
Tavlarios.




Dimitris Melisanidis is our
founder and has served as our Head of Corporate Development since December 2006.
Prior to that Mr. Melisanidis was our President and Chief Executive Officer
since June 2005, and served as a director and Chairman of our board of
directors until July 2006. In 1995, Mr. Melisanidis founded and has
since managed the group of companies that form our Company. Mr. Melisanidis
has also been involved historically with
our related companies and had a leadership role with respect to the promotion of
their products and services. Mr. Melisanidis is a member of the Greek
Committee of the classification society Bureau Veritas, the Committee on
Petroleum Policy of the Hellenic Petroleum Marketing Companies Association and
is involved in a number of other institutions, including the Hellenic-American
Chamber of Commerce, the Propeller Club of The United States, the Union of
European Shipowners with Cyprus Flag and The Yacht Club of Greece.
Mr. Melisanidis is a founding member and President of the Athens Club of
Black Sea and a Vice President of the World Fraternity for Hellenism and
Orthodoxy as well as the Association for Greek-American Friendship. From 1992 to
1995, Mr. Melisanidis was the co-owner and served as President and Managing
Director of soccer club AEK Athens.






61






Spyros Gianniotis has served
as our Chief Financial Officer since September 2008. Prior to joining our
Company, Mr. Gianniotis served as the Head of Shipping at Piraeus Bank SA,
holding the title of Assistant General Manager. From 2001 to 2005 Mr. Gianniotis
served on the board of Capes Investment Corporation, a privately-owned drybulk
company. Between 1989 and 2001, Mr. Gianniotis was at Citigroup, both in New
York and Athens, holding a number of positions within corporate and shipping
finance. He holds a bachelor's degree in economics and sociology from Queens
College (CUNY), a master's degrees in transportation management from Maritime
College (SUNY) and in business administration from Wagner College, New York, and
an executive certificate from Pace University.




Gregory Robolakis has been
the General Manager of our subsidiary Aegean Marine Petroleum S.A. from
June 2005 and served as a member of our board of directors from
July 2006 to December 2006.  In 1998, Mr. Robolakis joined
our subsidiary, AMP, and served as lubricants and claim manager and from 2001 to
2005 as Chief Operating Officer and Sales and Marketing Director. From 1994 to
1998, Mr. Robolakis worked at Agip Petroli SpA as Director of Marine Sales.
He began his career at Shell Company (Hellas) Ltd. where he was employed in
the sales and marketing department from 1988 to 1994. Mr. Robolakis holds a
bachelor's degree and a master's degree in chemical engineering from the City
University of New York.





Nikolas Hondos has been the
General Manager of our subsidiary Aegean Bunkering Services Inc. from January
2007 and is responsible for the operations of our bunkering tanker fleet. Prior
to joining our Company, Mr. Hondos served as Chief Executive Officer of tanker
operators Athenian Sea Carriers Ltd, a position he held since 1999. From 1994 to
1999 Mr. Hondos was Director of Business Development at American Bureau of
Shipping Marine Services, in charge of Europe and Middle East. Prior to this
engagement, Mr. Hondos was a Production Manager at NEORION Shipyards (Syros
Island) in Greece. Mr. Hondos holds a diploma in naval architecture and marine
engineering from the National Technical University in Athens.




Framework
Agreement




On
July 19, 2006, Leveret and AMPNInvest, entered into a Framework Agreement
which, as amended, affects our management and governance. Pursuant to the
Framework Agreement, Leveret and AMPNInvest agreed to identify, mutually agree
and elect seven members to serve on our board of directors effective upon the
closing of the initial public offering. Under the Framework Agreement, the
majority of the members of our board of directors are required to meet the
independence standards established by the New York Stock Exchange. Leveret and
AMPNInvest agreed that Mr. Georgiopoulos would serve as the Chairman of our
board and Mr. Melisanidis would refrain from serving on our board of
directors during the term of the Framework Agreement. Leveret and AMPNInvest
also agreed that AMPNInvest would name the chairs of our audit committee and our
nominating and corporate governance committee and propose and agree with Leveret
on the identities of our executive officers and that Leveret and AMPNInvest
would cause our board of directors to appoint such officers. The Framework
Agreement also provides that Leveret and AMPNInvest will vote in favor of our
board, including the independent directors, and the nominees of our board for
the duration of the Framework Agreement. The Framework Agreement further
provides that during its term, Leveret and AMPNInvest will vote on all matters
in accordance with our board's recommendations and will cause our board of
directors to appoint independent members to our board committees.
Leveret and AMPNInvest have also agreed to approve an equity incentive plan
covering our directors, officers, employees and consultants and to cause our
Company to enter into an employment or a consulting agreement with
Mr. Melisanidis.




The
Framework Agreement provides that it shall remain in effect so long as
Mr. Georgiopoulos or his successor designated by AMPNInvest serves on our
board of directors and AMPNInvest or Mr. Georgiopoulos owns at least 1% of
then issued and outstanding shares of our common stock. The Framework Agreement
expires in December 2011, on the fifth anniversary of the completion of the
initial public offering, unless terminated earlier pursuant to its provisions.
In August 2007, AMPNInvest was dissolved and the shares of our common stock held
by AMPNInvest were distributed to Messrs. Georgiopoulos and John Tavlarios,
respectively. Messrs. Georgiopoulos and John Tavlarios are the
successors-in-interest to AMPNInvest under the Framework Agreement.






62




B.           Compensation




The
aggregate annual compensation paid to our executive officers was $2.3 million
for the year ended December 31, 2008. We also paid$0.3 millionto our non-executive directors during
the year endedDecember 31,
2008. Furthermore, our executive officers and directors received an
aggregate of 68,238 restricted shares pursuant to our equity incentive plan
during the year ended December 31, 2008. In addition, each director is
reimbursed for out-of-pocket expenses incurred attending any meeting of the
board of directors or any committee of the board of directors. We do not
maintain a medical, dental or retirement plan for our directors. Officers who
also serve as directors do not receive additional compensation for their
services as directors.




C.           Board
Practices.




Committees
of the Board of Directors




The
standing committees of our board of directors consist of an audit committee, a
compensation committee and a nominating and corporate governance committee. Each
of our standing committees is comprised of independent members of our board of
directors. In addition, special committees may be established under the
direction of the board of directors when necessary to address specific
issues.




Audit
Committee




Our
audit committee is comprised of three independent members of our board of
directors. The committee is responsible for, among other things, making
recommendations concerning the engagement of our independent public accountants,
reviewing with the independent public accountants the plans and results of the
audit engagement, approving professional services provided by the independent
public accountants, reviewing the independence of the independent public
accountants, considering the range of audit and non-audit fees and reviewing the
adequacy of our internal accounting controls.  Our audit committee is
comprised of Messrs. Konomos, Rasterhoff and Papanicolaou. Mr. Konomos
serves as the chairman of the audit committee.




Compensation
Committee




Our
compensation committee is comprised of three independent members of our board of
directors. The committee is responsible for determining compensation for our
executive officers and other employees and administering our compensation
programs. Our compensation committee is comprised of Messrs. Papanicolaou,
Koutsomitopoulos and Rasterhoff. Mr. Papanicolaou serves as the chairman of
the compensation committee.




Nominating
and Corporate Governance Committee




Our
nominating and corporate governance committee is comprised of two independent
members of our board of directors. The committee is responsible for identifying
and recommending qualified candidates for board membership to the board of
directors. Our nominating and corporate governance committee is comprised of
Messrs. Rasterhoff and Koutsomitopoulos. Mr. Rasterhoff serves as the
chairman of the nominating and corporate governance committee.




D.           Employees




As
of December 31, 2008, we had approximately 715 employees, including
approximately 203 shoreside personnel, and approximately 512 shipboard personnel
employed on our vessels. Our Greek shoreside employees are subject to Greek
national collective bargaining agreements, which set minimum standards of their
employment. Our Greek shipboard personnel is also subject to these standards.
Our Filipino crew members are also subject to a collective bargaining
agreement with the Philippine Government that sets their minimum standards of
employment. We consider our employee relations to be satisfactory.




Our
full-time Greek shoreside employees are covered by state-sponsored pension funds
for which we are required to contribute a portion of the monthly salary of these
employees. Upon retirement of these employees, the state-sponsored pension funds
are responsible for paying the employee's retirement benefits and we have no
obligation to pay these benefits. Our crew members are employed under short-term
contracts and we are not liable for any of their pension or post-retirement
benefits.




E.           Share
ownership
  The
common shares beneficially owned by our directors and senior managers are
disclosed in "Item 7. Major Shareholders and Related Party Transactions"
below.


63




Equity
Incentive Plan




We
have adopted an equity incentive plan, which we refer to as the Plan, under
which our officers, key employees and directors may be eligible to receive
options to acquire shares of common stock. We have reserved a total of 4,053,500
shares of common stock for issuance under the Plan. The compensation committee
of our board of directors administers the Plan. Under the terms of the Plan, the
compensation committee of may grant new options exercisable at a price per
common share to be determined by our board of directors but in no event less
than fair market value as of the date of grant. The Plan also permits our
compensation committee to award restricted stock, restricted stock units,
non-qualified stock options, stock appreciation rights, dividend equivalent
rights, unrestricted stock, and performance shares. The Plan expires in December
2016, or ten years from the completion of our initial public
offering.  As of December 31, 2008, we granted an aggregate of 379,875restricted shares
pursuant to the Plan to certain of our employees, executive officers and
directors.






ITEM 7.
            MAJOR SHAREHOLDERS AND RELATED
      PARTY TRANSACTIONS.




A.           Major
shareholders.




The
following table presents certain information regarding (1) the beneficial
owner of more than 5% of the shares of common stock and (2) the total
amount of common stock beneficially owned by all of our directors and executive
officers, other than Messrs. Melisanidis, Georgiopoulos and John Tavlarios,
as a group in each case as of March 31, 2009.




Name
                                Number
                                
                                PercentageDimitris
      Melisanidis (1)
                                15,148,031
                                
                                35.2%Peter
      C. Georgiopoulos
                                4,265,250
                                
                                9.9%FMR
      LLC (2)
                                3,506,743
                                
                                8.2%Rainier
      Investment Management (2)
                                2,748,075
                                
                                6.4%Steinberg
      Asset Management (2)
                                2,740,990
                                
                                6.4%John
      P. Tavlarios (3)
                                1,119,444
                                
                                2.6%Other
      directors and executive officers as a group
                                242,550
                                
                                *


_________________


*
            Less
      than 1%




(1)
            Mr.
      Melisanidis beneficially owns 60,000 shares in his individual capacity and
      15,088,031 shares through Leveret International Inc., a Liberian
      corporation controlled by
Mr. Melisanidis.




(2)
            The beneficial ownership is based
      on latest available filing on Schedule 13G made or other relevant filings
      made with the U.S. Securities and Exchange
    Commission.




(3)
            Includes
      shares owned by a trust for the benefit of members of Mr. Tavlarios's
      family.




Our
principal shareholders will have the same voting rights as other holders of our
shares of common stock.




As
of March 31, 2009, there were 13 record holders in the United States holding
approximately 64.1% of the issued and outstanding shares of our common
stock.




B.           Related
party transactions.




Aegean
Oil S.A.




Marine Fuel Supply Service
Agreement.    On April 1, 2005, we entered into
a new marine fuel supply service agreement with Aegean Oil, a related company
owned and controlled by members of Mr. Melisanidis' family.
Mr. Melisanidis may also be deemed a control person of Aegean Oil for
United States securities law purposes, but Mr. Melisanidis disclaims such
control. Aegean Oil is engaged in the downstream gasoline market in Greece and
is licensed as a trader and physical supplier of marine petroleum products in
Greece. Aegean Oil is managed by a full-time executive team and has no common
management with us. Under the terms of this agreement, Aegean Oil sells and
delivers marine petroleum products to our customers within Greek territorial
waters. We must purchase and Aegean Oil must sell to us a minimum quantity of
marine petroleum products but neither party is required
to transact for more than a maximum quantity. Aegean Oil sells the marine
petroleum products at an amount equal to its purchase costs from selected Greek
refineries plus a margin that is reviewed and negotiated with us annually.
Payments are made within 30 calendar days from the date of receipt of the
invoices, with a penalty of 10% imposed on late payments. Under this agreement,
we are required to provide security by way of a standby letter of credit or
other mutually acceptable guarantee in relation to any outstanding balance. This
agreement terminates on March 31, 2015 unless any of the following
situations occur prior to the termination date: (i) Aegean Oil's petroleum
trading license terminates or is revoked by the Greek authorities, in which case
Aegean Oil may elect to terminate the agreement (ii) upon the breach by any
party in the performance of any of its obligations, as defined in the agreement,
in which case the non-breaching party may elect to terminate the agreement, or
(iii) upon the liquidation or bankruptcy of any party, in which case
the agreement terminates automatically. We have a unilateral right to terminate
the agreement by serving 12 months written notice upon our decision to
cease supply activities in the territory.






64






Prior
to entering into the new marine fuel supply service agreement, we were a party
to a bunkering supply and representation agreement with Aegean Oil, which we
entered into on December 30, 1999, as amended on September 25, 2000.
Pursuant to the bunkering supply and representation agreement, Aegean Oil sold
and delivered marine petroleum products to our customers within Greek
territorial waters. Under the terms of the agreement, we paid Aegean Oil an
amount equal to its purchase costs of marine petroleum products from selected
Greek refineries plus a margin which was reviewed and negotiated monthly. During
the years ended December 31, 2006, 2007 and 2008 we purchased marine
petroleum products from Aegean Oil in the amount of $155.0 million, $159.9
million and $351.5 million,  respectively.




License
Agreement.    On December 8, 2006, we have entered
into a trademark license agreement with Aegean Oil pursuant to which Aegean Oil
granted us a non-transferable, non-exclusive, perpetual (subject to termination
for material breach), world-wide, royalty-free right and license to use certain
trademarks related to the Aegean logo and "Aegean Marine Petroleum" in
connection with marine fuel supply services.




Bunkering
Agreement.  On July 31, 2008, we have entered into a bunkering
agreement with Aegean Oil.  Pursuant to the bunkering agreement,
Aegean Oil provides bunkering services on our behalf in the port of Piraeus and
other Greek ports.  Under the agreement, we pay a barging fee of
$40,000 per month, per vessel used.  During the year ended December
31, 2008, we had paid $0.7 million under the bunkering agreement.




Bareboat
Charters.  On July 31, 2008, we have entered into a bareboat
charters with Aegean Oil for the charter of Aegean III, Aegean VIII, Aegean XII,
and Aegean Rose.  Under the bareboat agreements, Aegean Oil pays us a
bareboat fee of $1,000 per vessel, per day. During the year ended December 31,
2008, we have received $0.4 million in bareboat payments from Aegean
Oil.




Contract of
Affreightment.  On October 1, 2008, we had entered into a
contract of affreightment with Aegean Oil for the employment of our specialty
tanker, Maistros.  Pursuant to this agreement, Aegean Oil has agreed
to annually ship 55,000 cubic meters of petroleum products at Euro 70 ($91) per
cubic meter.  During the year ended December 31, 2008, under the
contract of affreightment, we have received $1.4 million in payments from Aegean
Oil.




Aegean
Shipping Management S.A. and certain vessel-owning companies




We
conduct transactions with Aegean Shipping Management and certain vessel-owning
companies, or collectively Aegean Shipping, which are related companies owned
and controlled by members of Mr. Melisanidis' family. Mr. Melisanidis
may also be deemed a control person of Aegean Shipping for United States
securities law purposes, but Mr. Melisanidis disclaims such control. Aegean
Shipping is the owner and operator of an international shipping fleet including
Aframax and Panamax product tankers which are chartered out in the international
spot markets. Aegean Shipping is managed by a full-time executive team and has
no common management with us. Our material transactions with Aegean Shipping are
as follows:




Management of
Vessels.    Prior to January 1, 2004, Aegean
Shipping provided us with a wide range of shipping services such as technical
support and maintenance, insurance arrangement and handling, financial and
accounting services, in exchange for a management fee. Effective January 1,
2004, our subsidiary, Aegean Bunkering Services Inc. assumed the role of
fleet manager for all of our bunkering tankers. However, Aegean Shipping had
managed our Aframax tanker prior to its sale. We incurred management fees which
for the years ended December 31, 2006, 2007 and 2008 amounted to
$0.2 million, $0.1 million and $0, respectively.






65






Sale of Marine Petroleum
Products.    Aegean Shipping purchases marine fuel
and lubricants from us. Our sales of marine petroleum products to Aegean
Shipping for the years ended December 31, 2006, 2007 and 2008 amounted to
$13.1 million, $13.5 million and $9.6 million, respectively.




Vessel Sales and Purchases.
On July 31, 2008, we purchased three double hull bunkering tankers, Aegean III,
Aegean VIII and Aegean XII from Aegean Shipping for the aggregate purchase price
of $18.7 million.




On
January 17, 2006, the date of delivery of a newly-purchased secondhand
double hull bunkering tanker with a cargo-carrying capacity of 11,538 dwt, Omega
Af Donso, we sold this vessel to Aegean Shipping for its purchase price of
$6.2 million. On May 5, 2006, the date of delivery of a
newly-purchased secondhand double hull bunkering tanker with a cargo-carrying
capacity of 14,329 dwt, Trapper, we sold this vessel to Aegean Shipping for its
purchase price of $6.7 million. We did not recognize any gain or loss on
the sale of these two bunkering tankers to Aegean Shipping.




Leveret
International Inc. and AMPNInvest LLC




Short Term Financing
Agreements.    We have entered into four short-term
financing agreements with Leveret dated July 25, 2006, March 23, 2006,
March 13, 2006 and February 10, 2006 for $5.0 million,
$4.7 million, $0.43 million and $0.67 million, respectively. We
entered into these agreements mainly to (i) partially finance the
construction costs of our new bunkering tankers and specialty tankers,
(ii) to finance the acquisition costs associated with certain secondhand
bunkering tankers, and (iii) to finance working capital requirements. These
loans were unsecured, bear no interest and were payable upon
demand.  On December 18, 2006, the then-outstanding cumulative balance
under these facilities was fully repaid and the agreements were
terminated.




Registration Rights
Agreement.    On December 13, 2006, we entered into a
registration rights agreement with Leveret and AMPNInvest, our then-existing
shareholders, pursuant to which we granted Leveret and AMPNInvest, and certain
of its transferees, the right, under certain circumstances and subject to
certain restrictions, including restrictions included in the lock-up agreements,
to require us an aggregate of three times to register under the Securities Act
shares of our common stock held by Leveret and Messrs. Georgiopoulos and
Tavlarios, AMPNInvest's successor-in-interest. Under the registration rights
agreement, Leveret and Messrs. Georgiopoulos and Tavlarios have the right to
request us an aggregate of three times to register the sale of shares held by
each of them on their behalf and may require us to make available shelf
registration statements permitting sales of shares into the market from time to
time over an extended period. In addition, Leveret and Messrs. Georgiopoulos and
Tavlarios have the ability to exercise certain piggyback registration rights.
All expenses relating to registration will be borne by the Company. Currently,
Leveret owns 15,088,031 shares andMessrs. Georgiopoulos and
John Tavlarios own respectively 4,205,250 and 1,119,444 shares entitled to
these registration rights.




Other
Related Parties




Sale of Marine Petroleum Products to
General Maritime Corporation.    General Maritime
Corporation, or General Maritime, a tanker company, purchases marine fuel and
lubricants from us. Mr. Georgiopoulos, our Chairman of the Board and
shareholder, serves as Chairman of the Board of General Maritime, and
Mr. Tavlarios, our director and shareholder, is the President, Chief
Executive Officer and a member of the board of directors of General Maritime and
Mr. Konomos, our director, is a member of the board of directors of General
Maritime. Our sales of marine petroleum products to General Maritime for the
years ended December 31, 2006, 2007 and 2008 amounted to $1.7 million,
$1.2 million and $1.3 million, respectively.




Office
Lease.    We lease an office at
299 Park Avenue, New York, New York 10171, from General Maritime.  Our
lease currently expires on December 31, 2009.  We pay an average
monthly rental, which includes services that General Maritime provides for us,
of approximately $2,000.




Legal
Services.    We have retained Mr. Spyridon Fokas, our
director, general counsel and corporate secretary to provide legal services from
time to time.  The legal services rendered by Mr. Fokas's firm
included advice on general corporate formation matters as well as ship and
corporate financings.




Restricted Share
Grant.   In connection with the retirement of Apostolos
Tsitsirakis from our board of directors in November 2007, Mr. Tsitsirakis was
awarded 2,600 shares of our common stock and 7,400 restricted shares previously
granted under the Plan were immediately vested.






66




C.           Interests
of experts and counsel.




Not
applicable.




ITEM
8.                   FINANCIAL
INFORMATION




A.
Consolidated Statements and Other Financial Information




See
Item 18.




Dividend
Distribution Policy




Our
policy is to pay regular cash dividends on a quarterly basis on shares of our
common stock so long as we have sufficient capital or earnings to do so. While
we cannot assure you that we will do so, and subject to, among other things,
legal requirements, our ability to obtain financing on terms acceptable to us
and our ability to satisfy financial covenants contained in our financing
arrangements, we paid dividends of $0.01 per share in March, June, September and
December 2008 for the fourth quarter of 2007 and the first, second and third
quarters of 2008, respectively. We anticipate retaining most of our future
earnings, if any, for use in our operations and the expansion of our business.
Any further determination as to dividend policy will be made by our board of
directors and will depend on a number of factors, including the requirements of
Marshall Islands law, our future earnings, capital requirements, financial
condition and future prospects and such other factors as our board of directors
may deem relevant.




Marshall
Islands law generally prohibits the payment of dividends other than from
surplus, when a company is insolvent or if the payment of the dividend would
render the company insolvent.




In
addition, we may incur expenses or liabilities, including extraordinary
expenses, which could include costs of claims and related litigation expenses,
or be subject to other circumstances in the future that reduce or eliminate the
amount of cash that we have available for distribution as dividends or for which
our board of directors may determine requires the establishment of reserves. Our
board of directors may determine to finance our growth with cash from
operations, which would reduce or even eliminate the amount of cash available
for the payment of dividends.




Our
ability to pay dividends is also subject to our ability to satisfy financial
covenants contained in our financing arrangements. Under our senior secured
credit facility we are prohibited from paying dividends if, among other things,
(i) an event of default has occurred or will occur as a result of the
payment of the dividend; (ii) our book net worth is less than
$175.0 million; (iii) our ratio of total liabilities to total assets
exceeds 0.65-to-one; or (iv) we fail to maintain free liquidity of
$25.0 million in an account at our lender's bank at the end of each month
with average minimum daily free liquidity of $10.0 million.




B.           Significant
Changes.




There have been no significant changes
since the date of the annual consolidated financial statements included in this
report.






ITEM
9.                   THE
OFFER AND THE LISTING




A.           Offer
and Listing Details.




Shares
of our common stock commenced trading on the New York Stock Exchange on December
8, 2006 under the symbol "ANW".




The
high and low market prices of shares of our common stock on the New York Stock
Exchange since December 8, 2006 are as follows:


67




For the
    Period
              Low
              HighDecember 8 to December 31,
      2006
              $14.53
              $17.44Year ended December 31,
      2007
              $13.70
              $48.63Year ended December 31,
      2008
              $7.93
              $40.69First Quarter
      2007
              $13.70
              $17.70Second Quarter
      2007
              $14.97
              $19.89Third Quarter
      2007
              $17.96
              $37.00Fourth Quarter
      2007
              $32.87
              $48.63First Quarter
      2008
              $25.54
              $38.12Second Quarter
      2008
              $35.26
              $40.69Third Quarter
      2008
              $20.80
              $40.00Fourth Quarter
      2008
              $7.93
              $21.32First Quarter
      2009
              $14.01
              $19.92Second Quarter
      2009*
              $15.39
              $18.51October
2008
              $9.19
              $21.32November
    2008
              $7.93
              $13.19December
    2008
              $9.55
              $16.96January
2009
              $14.36
              $18.25February
    2009
              $14.01
              $19.87March 2009
              $14.01
              $19.92April 2009*
                _____________
                * Through April 20, 2009.
              $15.39
              $18.51




B.           Plan
of Distribution




Not
applicable




C.           Markets.




Shares
of our common stock are trading on the New York Stock Exchange under the symbol
"ANW".




D.           Selling
Shareholders




Not
applicable.




E.           Dilution




Not
applicable.




F.           Expenses
of the Issue




Not
applicable.




ITEM
10.                 ADDITIONAL
INFORMATION




A.           Share
capital.




Not
applicable.




B.           Memorandum
and Articles of Association.




Our
amended and restated articles of incorporation and bylaws have been filed as
exhibits 3.1 and 3.2, respectively, to the Registration Statement on Form F-1
(Registration No. 333-129768).  Information regarding the rights,
preferences and restrictions attaching to each class of our common shares is
described in section "Description of Capital Stock" in our Registration
Statement and is incorporated by reference herein.






68




C.           Material
contracts.




As
of December 31, 2008, we had debt obligations under our credit
facilities.  We refer you to the discussion in the section of this
report entitled "Operating and Financial Review and Prospects—Liquidity and
capital resources—Credit Facilities" for a description of our credit
facilities.  Other than our credit facilities, there were no material
contracts, other than contracts entered into in the ordinary course of business,
to which the Company was a party during the two year period immediately
preceding the date of this report.




D.           Exchange
controls.




Under
Marshall Islands, Greek law and the law of jurisdictions where our service
centers and marketing offices are located, there are currently no restrictions
on the export or import of capital, including foreign exchange controls or
restrictions that materially affect the remittance of dividends, interest or
other payments to non-resident holders of our common stock.




E.           Taxation.




The
following is a discussion of the material Greek, Marshall Islands, Liberian and
United States federal income tax consequences of beneficially owning our common
shares to a U.S. Holder or a Non-U.S. Holder, as each term is defined below.
This discussion does not purport to deal with the tax consequences of owning
common shares to all categories of investors, some of which, such as dealers in
securities, investors whose functional currency is not the United States dollar
and investors that own, actually or under applicable constructive ownership
rules, 10% or more of our common shares, may be subject to special rules. This
discussion deals only with holders who hold the common shares as a capital
asset. Moreover, this discussion is based upon laws, regulations and other
authorities in effect as of the date of this filing, all of which are subject to
change, possibly with retroactive effect. You are encouraged to consult your own
tax advisors concerning the overall tax consequences arising in your own
particular situation under United States federal, state, local or foreign law of
the ownership of common shares.




Greek
Tax Considerations




AMP
has established an office in Greece which provides services to AMP and AMP's
office in Cyprus. Under the laws of Greece, and in particular under Greek Law
3427/2005 which amended, replaced and supplemented provisions of Law 89/1967,
which expired on December 31, 2005, the income of AMP's Greek office is
calculated on a cost plus basis on expenses incurred by that office. The Greek
Ministry of Economy and Finance has determined that the profit margin applicable
to AMP is 5%. This determination is subject to periodic review. AMP's income, as
calculated by applying the 5% profit margin, is subject to Greek corporate
income tax at the rate of 29% for fiscal year 2006 and 25% for fiscal years
after 2007. All expenses to which the profit percentage applies are deducted
from gross income for Greek corporate income tax purposes. Accordingly, under
Greek Law 3427/2005, as currently applied to us, we expect that AMP will
continue to have no liability for any material amount of Greek income
tax.




Marshall
Islands Tax Considerations




In
the opinion of Reeder & Simpson P.C., our Marshall Islands counsel, the
following are the material Marshall Islands tax consequences of our activities
to us and to our shareholders of ownership of our common shares. We are
incorporated in the Marshall Islands. Under current Marshall Islands law, we are
not subject to tax on income or capital gains, and no Marshall Islands
withholding tax or income tax will be imposed upon payments of dividends by us
to our shareholders or proceeds from the disposition of common shares, provided
such shareholders are not residents in the Marshall Islands. There is no tax
treaty between the United States and the Republic of the Marshall
Islands.




Liberian
Tax Considerations




The
Republic of Liberia enacted a revised income tax act effective as of
January 1, 2001, or the New Act. In contrast to the income tax law
previously in effect since 1977, or the Prior Law, which the New Act repealed in
its entirety, the New Act does not distinguish between the taxation of a
non-resident Liberian corporation, such as our Liberian subsidiary, AMP, which
conducts no business in Liberia and was wholly exempted from tax under the Prior
Law, and the taxation of ordinary resident Liberian corporations.






69




In
2004, the Liberian Ministry of Finance issued regulations pursuant to which a
non-resident domestic corporation, such as our Liberian subsidiary, AMP, will
not be subject to tax under the New Act retroactive to January 1, 2001, or
the New Regulations. In addition, the Liberian Ministry of Justice issued an
opinion that the New Regulations were a valid exercise of the regulatory
authority of the Ministry of Finance. Therefore, assuming that the New
Regulations are valid, our Liberian subsidiary, AMP, will be wholly exempt from
Liberian income tax as under the Prior Law.




United
States Federal Income Tax Considerations




In
the opinion of Seward & Kissel LLP, our United States counsel, the
following are the material United States federal income tax consequences to us
of our activities and to U.S. Holders and Non-U.S. Holders, as defined below, of
investing in our common shares. The following discussion of United States
federal income tax matters is based on the United States Internal Revenue Code
of 1986, or the Code, judicial decisions, administrative pronouncements, and
existing and proposed regulations issued by the United States Department of the
Treasury, all of which are subject to change, possibly with retroactive effect.
References in the following discussion to "we" and "us" are to Aegean Marine
Petroleum Network Inc. and its subsidiaries on a consolidated
basis.




United
States Federal Income Taxation of Our Company




A
foreign corporation is subject to United States federal income tax on a net
basis only if it is engaged in a trade or business in the United States. A
foreign corporation which is engaged in a trade or business in the United States
will be subject to corporate income tax and branch profits tax at a combined
rate of up to 54.5% on its income which is effectively connected with its United
States trade or business, or Effectively Connected Income.




Income
from the sale of inventory property outside the United States by a foreign
corporation will be treated as Effectively Connected Income if the corporation
has a fixed place of business in the United States to which such income is
attributable, unless (1) the property is sold for use, consumption or
disposition outside the United States, and (2) the taxpayer has a fixed
place of business in a foreign country which materially participates in the
sale.




While
we have a place of business in the United States, we believe that none of our
income would be treated as Effectively Connected Income under the rules
discussed above. Specifically, we anticipate that (1) all of our sales of
petroleum products will occur outside the United States; (2) such products
will be sold for use, consumption or disposition outside the United States, and
(3) one of our foreign offices will materially participate in such sales.
Therefore, we anticipate that none of our income will be subject to United
States federal income tax on a net basis.




If
any portion of our income is treated as Effectively Connected Income, then such
income will be subject to corporate income tax and branch profits tax at a
combined rate of 54.5%.




United
States Federal Income Taxation of U.S. Holders




As
used herein, the term "U.S. Holder" means a beneficial owner of common shares
that is a United States citizen or resident, United States partnership or other
United States entity treated as a partnership, United States corporation or
other United States entity taxable as a corporation, an estate the income of
which is subject to United States federal income taxation regardless of its
source, or a trust if a court within the United States is able to exercise
primary jurisdiction over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of the
trust.




If
a partnership holds our common shares, the tax treatment of a partner will
generally depend upon the status of the partner and upon the activities of the
partnership. If you are a partner in a partnership holding our common shares,
you are encouraged to consult your tax advisor.




Distributions




Subject
to the discussion under the heading "Passive Foreign Investment Company," any
distributions made by us with respect to our common shares to a U.S. Holder will
generally constitute dividends, which may be taxable as ordinary income or
"qualified dividend income" as described in more detail below, to the extent of
our current or accumulated earnings and profits, as determined under United
States federal income tax principles. Distributions in excess of our earnings
and profits will be treated first as a nontaxable return of capital to the
extent of the U.S. Holder's tax basis in our common shares on a dollar- for-
dollar basis and thereafter as capital gain. Because we are not a United States
corporation, U.S. Holders that are corporations will not be entitled to claim a
dividends received deduction with respect to any distributions they receive from
us. Dividends paid with respect to our common shares will generally be treated
as "passive category income" (or, in the case of certain types of U.S. Holders,
"general category income") for purposes of computing allowable foreign tax
credits for United States foreign tax credit purposes.






70




Dividends
paid on our common shares to a U.S. Holder who is an individual, trust or
estate, or a U.S. Individual Holder, will generally be treated as "qualified
dividend income" that is taxable to such U.S. Individual Holders at preferential
tax rates (through 2010) provided that (1) the common shares are readily
tradable on an established securities market in the United States (such as the
New York Stock Exchange on which our common shares are traded); (2) we are
not a passive foreign investment company for the taxable year during which the
dividend is paid or the immediately preceding taxable year (which we do not
believe we are, have been or will be); (3) the U.S. Individual Holder has
owned the common shares for more than 60 days in the 121-day period
beginning 60 days before the date on which the common shares become
ex-dividend; and (4) the U.S. Individual Holder is not under an obligation
to make related payments with respect to positions in substantially similar or
related property. There is no assurance that any dividends paid on our common
shares will be eligible for these preferential rates in the hands of a U.S.
Individual Holder. Any dividends paid by us that are not eligible for these
preferential rates (including dividends paid to U.S. Holders other than U.S.
Individual Holders) will be taxed as ordinary income.  Legislation has
previously been introduced in the U.S. Congress which, if enacted in its present
form, would preclude dividends received on our common shares after the date of
enactment from qualifying for such preferential rates.




Special
rules may apply to any "extraordinary dividend," generally a dividend in an
amount which is equal to or in excess of ten percent of a shareholder's adjusted
basis (or fair market value in certain circumstances) in a common share. If we
pay an "extraordinary dividend" on our common shares that is treated as
"qualified dividend income," then any loss derived by a U.S. Individual Holder
from the sale or exchange of such common shares will be treated as long-term
capital loss to the extent of such dividend.




Sale,
Exchange or Other Disposition of Common Shares




A
U.S. Holder generally will recognize realize taxable gain or loss upon a sale,
exchange or other disposition of our common shares in an amount equal to the
difference between the amount realized by the U.S. Holder from such sale,
exchange or other disposition and the U.S. Holder's tax basis in such stock.
Subject to the discussion under the heading "Passive Foreign Investment Company"
below, such gain or loss will be treated as long-term capital gain or loss if
the U.S. Holder's holding period is greater than one year at the time of the
sale, exchange or other disposition. Such capital gain or loss will generally be
treated as U.S.-source income or loss, as applicable, for U.S. foreign tax
credit purposes. A U.S. Holder's ability to deduct capital losses is subject to
certain limitations.




Passive Foreign Investment Company




A
foreign corporation will be treated as a "passive foreign investment company,"
or a PFIC, for U.S. federal income tax purposes, if 75% or more of its gross
income consists of certain types of passive income or 50% or more of its assets
produce or are held for the production of passive income. If a corporation owns
at least 25% by value of the shares of another corporation, it is treated for
purposes of these tests as owning a proportionate share of the assets of the
other corporation and as receiving directly a proportionate share of the other
corporation's income. Passive income for this purpose generally includes
dividends, interest, royalties, rents and gains from commodities and securities
transactions. We presently believe that we are not a PFIC and do not anticipate
becoming a PFIC. This is, however, a factual determination made on an annual
basis based on our income, assets and market capitalization, among other
factors, and is subject to change. If we are classified as a PFIC, a U.S. Holder
of our common shares could be subject to increased tax liability upon the sale
or other disposition of our common shares or upon the receipt of amounts treated
as "excess distributions."




The
effect of the PFIC rules on a U.S. Holder may be mitigated if the U.S. Holder
makes a valid and timely results may be avoided if a "mark-to-market" election
or "qualified electing fund" election.  We will notify U.S. Holders in
the event we conclude that we will be treated as a PFIC for any taxable year.
U.S. Holders are encouraged to consult their tax advisors regarding the
application of the PFIC rules, including eligibility for and the manner and
advisability of making certain elections with respect to our PFIC
status.




United
States Federal Income Taxation of "Non-U.S. Holders"




A
beneficial owner of common shares that is not a U.S. Holder is referred to
herein as a "Non-U.S. Holder."




Dividends
on Common shares




Non-U.S.
Holders generally will not be subject to United States federal income tax or
withholding tax on dividends received from us with respect to our common shares,
unless such dividend is effectively connected with the Non-U.S. Holder's conduct
of a trade or business in the United States. If the
Non-U.S. Holder is entitled to the benefits of a United States income tax treaty
with respect to those dividends, that income is taxable only if it is
attributable to a permanent establishment maintained
by the Non-U.S. Holder in the United States or, in the case of an individual,
such income is attributable to a fixed place of business in the United
States.






71






Sale,
Exchange or Other Disposition of Common Shares




Non-U.S.
Holders generally will not be subject to United States federal income tax or
withholding tax on any gain realized upon the sale, exchange or other
disposition of our common shares, unless:




●
            the
      Non-U.S. Holder is an individual who is present in the United States for
      183 days or more during the taxable year of disposition and other
      conditions are met; or




●
            the
      gain is effectively connected with the Non-U.S. Holder's conduct of a
      trade or business in the United States. If the Non-U.S. Holder is entitled
      to the benefits of an income tax treaty with respect to that gain, that
      gain is taxable only if it is attributable to a permanent establishment
      maintained by the Non-U.S. Holder in the United
  States.




If
the Non-U.S. Holder is engaged in a United States trade or business for United
States federal income tax purposes, the income from the common shares, including
dividends and the gain from the sale, exchange or other disposition of the
common shares that is effectively connected with the conduct of that trade or
business will generally be subject to regular United States federal income tax
in the same manner as discussed in the previous section relating to the taxation
of U.S. Holders. In addition, earnings and profits of a corporate Non-U.S.
Holder that are attributable to the effectively connected income, which are
subject to certain adjustments, may be subject to an additional branch profits
tax at a rate of 30%, or at a lower rate as may be specified by an applicable
income tax treaty.




Other
Taxes




In
addition to the tax consequences discussed above, we may be subject to tax in
one or more other jurisdictions where we conduct activities.  Although
we currently do not pay a material amount of tax in any jurisdiction in which we
operate, there can be no assurance that this will not change.




F.           Dividends
and paying agents.




Not
applicable.




G.           Statement
by experts.




Not
applicable.




H.           Documents
on display.




We
are subject to the informational requirements of the Securities Exchange Act of
1934, as amended. In accordance with these requirements we file reports and
other information with the SEC. These materials, including this annual report
and the accompanying exhibits, may be inspected and copied at the public
reference facilities maintained by the Commission at 100 F Street, N.E., Room
1580, Washington, D.C. 20549. You may obtain information on the operation of the
public reference room by calling 1 (800) SEC-0330, and you may obtain copies at
prescribed rates from the Public Reference Section of the Commission at its
principal office in Washington, D.C. 20549. The SEC maintains a website
(http://www.sec.gov) that contains reports, proxy and information statements and
other information that we and other registrants have filed electronically with
the SEC. Our filings are also available on our website at www.ampni.com.




Shareholders
may also request a copy of our filings at no cost, by writing or telephoning us
at the following address:




Aegean
Marine Petroleum Network Inc.


42
Hatzikyriakou Avenue


Piraeus
185 38 Athens


Greece


Telephone:
011 30 210 458-6200




72





I.    
        Subsidiary
Information




Not
applicable.




ITEM
      11.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK




Price
Risk




Our price risk has been minimal because
we have generally purchased inventory for which we have already had a binding
sales contract in place. We generally do not fix future prices for delivery of
fuel in excess of one week and our suppliers generally use average PLATTS
pricing in their calculation of cost prices to us. Accordingly, our exposure to
price risk has covered a period of only a few days. In Gibraltar, West Africa,
theUnited
Kingdomand the UAE, we
operate storage facilities and we currently import and store cargos of marine
fuel prior to resale to customers. Accordingly, in Gibraltar, West Africa, theUnited Kingdomand the UAE, we purchased fuel before
entering into a binding sales contract with a customer. We believe that our
exposure to price risk in these locations covers a period of one to two weeks.
In view of our minimal price risk, we have not entered into derivative
contracts, swaps or futures to mitigate the risk of market price fluctuations in
marine fuel. Our policy is to not use fuel related derivative financial
instruments for speculative purposes.




In
the future, we may enter into long-term fixed price sales commitments, which fix
the prices of future fuel sales. Furthermore, we may use cargo storage in our
other service centers or we might import larger cargos of fuel for storage,
which would increase our oil price risk. Furthermore, in the future, we might
execute cargo trading transactions to arbitrage the price of marine fuel, which
method would increase our oil price risk. Finally, we may enter into derivative
contracts in the forms of swaps or futures in order to mitigate the risk of
market price fluctuations in marine fuel.




Interest
Rate Risk




Historically,
we have been subject to market risks relating to changes in interest rates
because we have had significant amounts of floating rate long-term debt and
short-term borrowings outstanding. During the year ended December 31, 2008, we paid interest on
this debt based on LIBOR plus an average spreadof 1.23% on our bank loans. A one
percent increase in LIBOR would have increased our interest expense for the year
ended December 31, 2008 from $12.9 million to $14.6 million. We have
considerable exposure to interest rate changes because we expect to have
long-term bank debt outstanding in order to partially finance the construction
of our bunkering and specialty tankers as well as short-term borrowings
outstanding in the form of a line of credit under our new senior secured credit
facility for working capital purposes which will be used to cover any periodic
working capital requirements. We expect to repay these borrowings on a periodic
basis using cash flows from operations.




At
any time and from time to time, we may enter into derivative contracts,
including interest rate swaps, to hedge a portion of our exposure to variability
in our floating rate long-term debt.




Exchange
Rate Risk




We
have conducted the vast majority of our business transactions in U.S. dollars.
We have purchased marine petroleum products in the international oil and gas
markets and our vessels have operated in international shipping markets; both
these international markets transact business primarily in U.S. dollars.
Accordingly, our total revenues have been fully denominated in U.S. dollars and
our cost of marine petroleum products, which, for the year ended December 31,
2008, comprised approximately 98.0% of our total operating
expenses have been denominated in U.S. dollars. Our balance sheet is mainly
comprised of dollar-denominated assets including trade receivables, inventories
and the cost of vessels, and liabilities including trade payables, short-term
borrowings and long-term loans. Our foreign exchange losses in recent periods
have mainly arisen from the translation of assets and liabilities of our service
centers that are denominated in local currency. Accordingly, the impact of
foreign exchange fluctuations on our consolidated statements of income has been
minimal.




Should
we enter certain markets where payments and receipts are denominated in local
currency or should either the international oil and gas markets or the
international shipping markets change their base currency from the U.S. dollar
to another international currency such as the Euro, the impact on our
dollar-denominated consolidated statements of income may be
significant.






73




Due
to the minimal historic impact of foreign exchange fluctuations on us, it is our
policy to not enter into hedging arrangements in respect of our foreign currency
exposures.






ITEM
      12.
            DESCRIPTION
      OF SECURITIES OTHER THAN EQUITY
SECURITIES




Not
applicable.




PARTII




ITEM
      13.
            DEFAULTS,
      DIVIDEND ARREARAGES AND
DELINQUENCIES




None.




ITEM
      14.
            MATERIAL
      MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
      PROCEEDS




None.




ITEM
      15.
            CONTROLS
      AND PROCEDURES




(a)           Disclosure
of controls and procedures.




We
evaluated the effectiveness of the Company's disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange
Act of 1934) as of December 31, 2008.  Based on that evaluation, our
President and the Chief Financial Officer concluded that our disclosure controls
and procedures were effective to provide reasonable assurance that the
information required to be disclosed by the Company in reports filed under the
Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
and reported within the time periods specified in the SEC's rules and forms. The
Company believes that a system of controls, no matter how well designed and
operated, cannot provide assurance that the objectives of the controls are met,
and no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within a company have been
detected.




(b)           Management's
annual report on internal control over financial reporting.




Managementis responsible for establishing and
maintaining adequate internal control over financial reporting as defined in
Rules 13a-15(f) promulgated under the Securities Exchange Act of
1934.




Internal control over financial
reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the
Securities Exchange Act of 1934 as a process designed by, or under the
supervision of, the Company's principal executive and principal
financial officersand
effected by the Company's board of directors, management and other
personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and
includes those policies and procedures that:




●
              Pertain
      to the maintenance of records that, in reasonable detail, accurately and
      fairly reflect the transactions and dispositions of the assets of the
      Company;
  ●
                Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that our receipts and expenditures are being
      made only in accordance with authorizations of Company's management and
      directors; and
  ●
                  Provide reasonable assurance
      regarding prevention or timely detection of unauthorized acquisition, use
      or disposition of our assets that could have a material effect on the
      financial
statements.




Because of its inherent limitations,
internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.






74




Management conducted the evaluation of
the effectiveness of the internal controls over financial reporting using the
control criteria framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO) published in its report entitled Internal
Control-Integrated Framework.




Managementwith the participation of ourPresidentandChiefFinancial Officer assessed the
effectiveness of the design and operation of the Company's internal controls over financial
reporting pursuant to Rule 13a-15 of the Securities Exchange Act of 1934, as of
December 31,2008. Based upon that evaluation,ourPresidentandChiefFinancial Officer concluded that the
Company's internal controls over financial
reporting are effective as of December 31,2008.




The effectiveness of the
Company's internal control over financial
reporting as of December 31,2008has been audited byDeloitte Hadjipavlou Sofianos &
Cambanis S.A, an
independent registered public accounting firm.




(c)           Attestation
report of the registered public accounting firm.




The
registered public accounting firm that audited the consolidated financial
statements, Deloitte Hadjipavlou Sofianos & Cambanis S.A, has issued an
attestation report on the Company's internal control over financial reporting,
appearing on page F-3 of the
financial statements filed as a part of this report, and is incorporated
herein by reference.




(d)           Changes
in internal control over financial reporting.




There
were no changes in our internal controls over financial reporting that occurred
during the period covered by this annual report that have materially effected,
or are reasonably likely to materially affect, the Company's internal control
over financial reporting.




ITEM
      16A.
            AUDIT
      COMMITTEE FINANCIAL EXPERT




In
accordance with the rules of the New York Stock Exchange, the exchange on which
our common stock is listed, the Company has appointed an audit committee whose
members as of December 31, 2008 are Messrs.  Konomos, Rasterhoff and
Papanicolaou.  Mr. Konomos  has been determined to be a
financial expert by our board of directors and independent, as that term is
defined in the listing standards.




ITEM
      16B.
            CODE
      OF ETHICS




The
Company has adopted a code of ethics that applies to its principal executive
officer, principal financial officer, principal accounting officer and persons
performing similar functions. A copy of our code of ethics has been filed as an
exhibit to the Company's annual report on Form 20-F for the fiscal year ended
December 31, 2006 and is also available on our website at www.ampni.com.  We will
also provide a hard copy of our code of ethics free of charge upon written
request of a shareholder.




Shareholders
may also request a copy of our code of ethics at no cost, by writing or
telephoning us at the following address:




Aegean
Marine Petroleum Network Inc.


42
Hatzikyriakou Avenue


Piraeus
185 38 Athens


Greece


Telephone:
011 30 210 458-6200




ITEM
      16C.
            PRINCIPAL
      ACCOUNTING FEES AND SERVICES




Our
principal accountants for the years ended December 31, 2006, 2007 and 2008 were
Deloitte Hadjipavlou Sofianos & Cambanis S.A.  The aggregate
audit fees billed to us for the years ended December 31, 2006, 2007 and 2008
were $0.3 million, $0.6 million, and $0.5 million,
respectively.  There were $0.1 million and $50,000 tax fees and
audit-related fees, respectively, incurred by us during 2008.  There were
no audit-related, tax or other fees billed to us during 2006 and
2007.




ITEM
      16D.
            EXEMPTIONS
      FROM LISTING STANDARDS FOR AUDIT
COMMITTEES




None.






75




ITEM
      16E.
            PURCHASES
      OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
  PURCHASES




None.




ITEM
      16F.
            CHANGE
      IN REGISTRANT'S CERTIFYING
ACCOUNTANT




None.




ITEM
      16G.
            CORPORATE
      GOVERNANCE




Pursuant
to an exception for foreign private issuers, we, as a Marshall Islands company,
are not required to comply with the corporate governance practices followed by
U.S. companies under the NYSE listing standards.  We believe that our
established practices in the area of corporate governance are in line with the
spirit of the NYSE standards and provide adequate protection to our
shareholders.  In this respect, we have voluntarily adopted NYSE required
practices, such as (a) having a majority of independent directors, (b)
establishing audit, compensation and nominating committees and (c) adopting a
Code of Ethics.




There
are two significant differences between our corporate governance practices and
the practices required by the NYSE.  The NYSE requires that non-management
directors meet regularly in executive sessions without management.  The
NYSE also requires that all independent directors meet in an executive session
at least once a year.  As permitted under Marshall Islands law and our
bylaws, our non-management directors do not regularly hold executive sessions
without management and we do not expect them to do so in the future. The NYSE requires companies to adopt and
disclose corporate governance guidelines.  The guidelines must address,
among other things: director qualification standards, director responsibilities,
director access to management and independent advisers, director compensation,
director orientation and continuing education, management succession and an
annual performance evaluation.  We are not required to adopt such
guidelines under Marshall Islands law and we have not adopted such
guidelines.




Information
about our corporate governance practices may also be found on our website, http://www.ampni.com,
under "Investor Relations/Corporate Governance."




PART
III




ITEM
      17.
            FINANCIAL
      STATEMENTS




See
Item 18.




ITEM
      18.
            FINANCIAL
      STATEMENTS




The financial statements, together with
the report ofDeloitte Hadjipavlou Sofianos & Cambanis S.A.thereon, are set forth on pages F-1
through F-35 and are filed as a part of this report.





ITEM
      19.
            EXHIBITS





Exhibit
      Number
            Description1.1
            Amended
      and Restated Articles of Incorporation of Aegean Marine Petroleum Network
      Inc.*1.2
            Amended
      and Restated Bylaws of Aegean Marine Petroleum Network
    Inc.*2.1
            Form
      of common share certificate of Aegean Marine Petroleum Network
      Inc.*4.1
            Form
      of Registration Rights Agreement*   76
  ExhibitNumber
                Description4.2
                Amended
      and Restated 2006 Stock Incentive Plan**4.3
                Form
      of shipbuilding contract for construction of one 3,500 dwt product oil
      tanker with Fujian Southeast Shipyard, as amended*4.4
                Form
      of contract for design, building supervision, representation, procurement
      of machines and supplies, and turn-key delivery of a 3,500 dwt product
      tanker with IOTA Corporation*4.5
                Form
      of shipbuilding contract for the design, construction, sale and purchase
      of a 2,400 dwt double hull product oil tanker with ro-ro facility with
      Severnav S.A.*4.6
                Marine
      Fuel Supply Service Agreement, dated April 1, 2005, by and between Aegean
      Marine Petroleum S.A. and Aegean Oil S.A.*4.7
                Form
      of License Agreement by and between Aegean Oil S.A. and Aegean Marine
      Petroleum Network Inc.*4.8
                Loan
      Agreement, dated August 30, 2005, by and among Aegean Baltic Bank S.A. and
      HSH Nordbank AG, as Lenders, and Kithnos Maritime, Inc., Naxos Maritime
      Inc., Paros Maritime Inc. and Serifos Maritime Inc., as
      Borrowers*4.9
                Form
      of contract for design, building supervision, representation, procurement
      of machines and supplies, and turn-key delivery of a 5,500 dwt product
      tanker with IOTA Corporation*4.10
                Option
      Agreement, dated January 13, 2006, by and between Aegean Bunkering
      Services Inc. and Qingdao Hyundai Shipbuilding Co. Ltd., as
      amended*4.11
                Financial
      Agreement, dated October 26, 2005, by and among Aegean Baltic Bank S.A.
      and HSH Nordbank AG, as Lenders, and Dynamic Corp. and Sea Global S.A., as
      Borrowers*4.12
                Loan
      Agreement, dated February 10, 2006, by and among The Royal Bank of
      Scotland plc, as Lender, and Amorgos Maritime Inc., Kimolos Maritime Inc.,
      Milos Maritime Inc., Mykonos Maritime Inc. and Syros Maritime Inc., as
      Borrowers*


77





Exhibit
      Number
                        Description4.13
                        Framework
      Agreement, dated July 19, 2006, by and between Leveret International Inc.
      and AMPNInvest LLC, as amended*4.14
                        Form
      of shipbuilding contract for construction of one 5,500 dwt product oil
      tanker with Qingdao Hyundai Shipbuilding Co. Ltd.*4.15
                        Loan
      Agreement, dated October 25, 2006, by and among Aegean Baltic Bank S.A.
      and HSH Nordbank AG, as Lenders, and Eton Marine Ltd., Benmore Services
      S.A. and Ingram Enterprises Co., as Borrowers*4.16
                        Loan
      Agreement, dated October 27, 2006, by and among National Bank of Greece
      S.A., as Lender, and Tasman Seaways Inc. and Santon Limited, as
      Borrowers*4.17
                        Loan
      Agreement, dated October 30, 2006, by and among Aegean Baltic Bank S.A.
      and HSH Nordbank AG, as Lenders, and Kerkyra Marine S.A., Ithaki Marine
      S.A., Cephallonia Marine S.A., Paxoi Marine S.A., Zakynthos Marine S.A.,
      Lefkas Marine S.A. and Kythira Marine S.A., as
  Borrowers*4.18
                        Loan
      Agreement, dated December 19, 2006, by and among The Royal Bank of
      Scotland plc, as Lender, and Aegean Marine Petroleum Network Inc. and
      Aegean Marine Petroleum S.A., as Borrowers, as
  amended***4.19
                        Supplemental
      Agreement, dated June 8, 2007 relating to loan agreement dated August 30,
      2005, by and among Aegean Baltic Bank S.A. and HSH Nordbank AG, as
      Lenders, and Kithnos Maritime, Inc., Naxos Maritime Inc., Paros Maritime
      Inc. and Serifos Maritime Inc., as Borrowers***4.20
                        Supplemental
      Agreement, dated June 13, 2007 relating to a loan agreement, dated October
      30, 2006, by and among Aegean Baltic Bank S.A. and HSH Nordbank AG, as
      Lenders, and Kerkyra Marine S.A., Ithaki Marine S.A., Cephallonia Marine
      S.A., Paxoi Marine S.A., Zakynthos Marine S.A., Lefkas Marine S.A. and
      Kythira Marine S.A., as Borrowers***4.21
                        Loan
      Agreement, dated July 5, 2007, by and among The Royal Bank of Scotland
      Plc, as Lender, and Andros Marine Inc., Dilos Marine Inc., Ios Marine
      Inc., Sifnos Marine Inc. and Tinos Marine Inc., as Borrowers, as amended
      and supplemented4.22
                        Form
      of shipbuilding contract for construction of one 3,800 dwt product
      oil tanker with Fujian Southeast Shipyard, as
amended***4.23
                        Loan
      Agreement, dated December 20, 2007, by and among The Royal Bank of
      Scotland Plc, as Lender, and Aegean Marine Petroleum S.A., as
      Borrower****4.24
                        Revolving
      Overdraft Credit Facility, dated March 11, 2008, by and among Piraeus Bank
      A.E., as Lender, and Milos I Maritime Inc., Baldwin Management Co. and
      Vera Navigation S.A., as Borrowers4.25
                        Loan
      Agreement, dated April 24, 2008, by and among Aegean Baltic Bank S.A. and
      HSH Nordbank AG, as Lenders, and Kassos Navigation S.A., Tilos Navigation
      S.A., Symi Navigation S.A. and Halki Navigation S.A., as
      Borrowers4.26
                        Loan
      Agreement, dated July 8, 2008, by and among Piraeus Bank A.E., as Lender,
      and Aegean Bunkering Services Inc., as
Borrower






78





4.27
                Loan
      Agreement, dated September 30, 2008, by and among The Royal Bank of
      Scotland Plc and HSH Nordbank AG, as
      Lenders, and Aegean Marine Petroleum S.A., as Borrower, as amended and
      supplemented8.1
                List
      of Subsidiaries11.1
                Code
      of Ethics*****12.1
                Rule
      13a-14(a)/15d-14(a) Certification of Principal Executive
      Officer12.2
                Rule
      13a-14(a)/15d-14(a) Certification of Principal Financial
      Officer13.1
                Certification
      of Principal Executive Officer pursuant to 18 U.S.C. Section
      135013.2
                Certification
      of Principal Financial Officer pursuant to 18 U.S.C. Section
      1350


_____________


*
            Filed as an exhibit to the
      Company's Registration Statement on Form
      F-1,RegistrationNo. 333-129768and incorporated by reference
      herein.




**
            Incorporated
      by reference to Exhibit 1 to the Company's Current Report on
      Form 6-K furnished on September 14,
  2007.




***
              Filed as an exhibit to the
      Company's Registration Statement on Form
      F-1,RegistrationNo. 333-146918and incorporated by reference
      herein.
  ****
              Incorporated
      by reference to Exhibit 4.40 to the Company's Annual Report on Form 20-F
      filed on April 17, 2008.
  *****
              Incorporated
      by reference to Exhibit 11.1 to the Company's Annual Report on
      Form 20-F filed on May 25,
2007.


79




AEGEAN
MARINE PETROLEUM NETWORK INC.




INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS







PageReport
      of Independent Registered Public Accounting Firm
            
            F-2Report
      of Independent Registered Public Accounting Firm
            
            F-3Consolidated
      Balance Sheets as of December 31, 2007 and 2008
            
            F-4Consolidated
      Statements of Income
              for
      the years ended December 31, 2006, 2007 and 2008
            
            F-5Consolidated
      Statements of Stockholders' Equity
              for
      the years ended December 31, 2006, 2007 and 2008
            
            F-6Consolidated
      Statements of Cash Flows
              for
      the years ended December 31, 2006, 2007 and 2008
            
            F-7Notes
      to Consolidated Financial Statements
            
            F-8








F-1


REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM







To
the Board of Directors and Stockholders of Aegean Marine Petroleum Network
Inc.




Majuro,
Republic of the Marshall Islands




We
have audited the accompanying consolidated balance sheets of Aegean Marine
Petroleum Network Inc. and subsidiaries (the "Company") as of December 31, 2008
and 2007, and the related consolidated statements of income, stockholders'
equity, and cash flows for each of the three years in the period ended December
31, 2008.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on
these financial statements based on our audits.




We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.




In
our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Aegean Marine Petroleum Network
Inc. and subsidiaries as of December 31, 2008 and 2007, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2008, in conformity with accounting principles generally accepted
in the United States of America.




We
have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the Company's internal control over
financial reporting as of December 31, 2008, based on the criteria established
in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated April 9, 2009
expressed an unqualified opinion on the Company's internal control over
financial reporting.






/s/
Deloitte.


Hadjipavlou,
Sofianos & Cambanis S.A.




Athens,
Greece




April
9,
2009







F-2


REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To
the Board of Directors and Stockholders of Aegean Marine Petroleum Network
Inc.




Majuro,
Republic of the Marshall Islands




We
have audited the internal control over financial reporting of Aegean Marine
Petroleum Network Inc. and subsidiaries (the "Company") as of December 31, 2008,
based on criteria established in Internal Control — Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway
Commission.  The Company's management is responsible for maintaining
effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting, included in the
accompanying Management's Annual Report on Internal Control over Financial
Reporting.  Our responsibility is to express an opinion on the
Company's internal control over financial reporting based on our
audit.




We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all
material respects.  Our audit included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness
of internal control based on the assessed risk, and performing such other
procedures as we considered necessary in the circumstances.  We
believe that our audit provides a reasonable basis for our opinion.




A
company's internal control over financial reporting is a process designed by, or
under the supervision of, the company's principal executive and principal
financial officers, or persons performing similar functions, and effected by the
company's board of directors, management, and other personnel to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles.  A company's internal
control over financial reporting includes those policies and procedures that (1)
pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial
statements.




Because
of the inherent limitations of internal control over financial reporting,
including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may not be prevented or
detected on a timely basis.  Also, projections of any evaluation of
the effectiveness of the internal control over financial reporting to future
periods are subject to the risk that the controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.




In
our opinion, the Company maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2008, based on the
criteria established in Internal Control — Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission.




We
have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated financial
statements as of and for the year ended December 31, 2008 of the Company and our
report dated April 9, 2009 expressed an unqualified opinion on those financial
statements.




/s/
Deloitte.


Hadjipavlou,
Sofianos & Cambanis S.A.




Athens,
Greece




April
9, 2009




F-3


AEGEAN
MARINE PETROLEUM NETWORK INC.


CONSOLIDATED
BALANCE SHEETS




AS
OF DECEMBER 31, 2007 AND 2008




(Expressed in thousands of U.S. dollars
– except for share and per share data)




December
      31,2007
                                              
                                              
                                              2008ASSETSCURRENT
    ASSETS:Cash and cash
      equivalents
                                              
                                              $
                                              1,967
                                              
                                              
                                              $
                                              46,927Trade receivables, net of
      allowance for doubtful accounts
                                                of $1,603 and $1,323, as of December 31, 2007 and
      2008, respectively
                                              
                                              
                                              191,654
                                              
                                              
                                              
                                              131,266Due from related companies (Note
      4)
                                              
                                              
                                              3,686
                                              
                                              
                                              
                                              2,501Inventories (Note
      5)
                                              
                                              
                                              97,140
                                              
                                              
                                              
                                              55,330Prepayments and other current
      assets (Note 10)
                                              
                                              
                                              12,417
                                              
                                              
                                              
                                              13,731Restricted cash (Note
      2)
                                              
                                              
                                              8,000
                                              
                                              
                                              
                                              1,632Total current
      assets
                                              
                                              
                                              314,864
                                              
                                              
                                              
                                              251,387FIXED
    ASSETS:Advances for vessels under
      construction and acquisitions (Note 6)
                                              
                                              
                                              84,378
                                              
                                              
                                              
                                              113,564Vessels, cost (Notes 7, 12 and
      20)
                                              
                                              
                                              149,866
                                              
                                              
                                              
                                              260,741Vessels, accumulated depreciation
      (Notes 7, 12 and 20)
                                              
                                              
                                              (14,312
                                              )
                                              
                                              
                                              (26,606
                                              )Vessels' net book
      value
                                              
                                              
                                              135,554
                                              
                                              
                                              
                                              234,135Other fixed assets, net (Notes 8
      and 20)
                                              
                                              
                                              1,431
                                              
                                              
                                              
                                              1,681Total fixed
      assets
                                              
                                              
                                              221,363
                                              
                                              
                                              
                                              349,380OTHER NON-CURRENT
      ASSETS:Restricted cash (Notes 2 and
      12)
                                              
                                              
                                              10,171
                                              
                                              
                                              
                                              3,838Deferred charges, net (Note
      9)
                                              
                                              
                                              8,869
                                              
                                              
                                              
                                              12,440Concession agreement (Note
      3)
                                              
                                              
                                              7,720
                                              
                                              
                                              
                                              7,407Goodwill (Note
      3)
                                              
                                              
                                              3,943
                                              
                                              
                                              
                                              17,431Other non-current
      assets
                                              
                                              
                                              27
                                              
                                              
                                              
                                              24Total
assets
                                              
                                              $
                                              566,957
                                              
                                              
                                              $
                                              641,907LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIES:Short-term borrowings (Note
      11)
                                              
                                              $
                                              133,000
                                              
                                              
                                              $
                                              90,000Current portion of long-term debt
      (Note 12)
                                              
                                              
                                              3,650
                                              
                                              
                                              
                                              9,352Trade payables to third
      parties
                                              
                                              
                                              77,862
                                              
                                              
                                              
                                              67,817Trade payables to related
      companies (Note 4)
                                              
                                              
                                              27,193
                                              
                                              
                                              
                                              22,462Other payables to related
      companies
                                              
                                              
                                              160
                                              
                                              
                                              
                                              187Accrued and other current
      liabilities
                                              
                                              
                                              9,470
                                              
                                              
                                              
                                              12,204Total current
      liabilities
                                              
                                              
                                              251,335
                                              
                                              
                                              
                                              202,022LONG-TERM DEBT, net of current
      portion (Note 12)
                                              
                                              
                                              71,381
                                              
                                              
                                              
                                              154,269OTHER NON-CURRENT
      LIABILITIES
                                              
                                              
                                              516
                                              
                                              
                                              
                                              613COMMITMENTS AND CONTINGENCIES
      (Note 13)
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -STOCKHOLDERS'
      EQUITY:Preferred stock, $0.01 par value;
      25,000,000 shares authorized, none issued
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Common stock, $0.01 par value;
      100,000,000 shares authorized at December 31, 2007 and 2008; 42,461,428
      and 42,543,608 shares, issued and outstanding at December 31, 2007 and
      2008, respectively (Note 17)
                                              
                                              
                                              425
                                              
                                              
                                              
                                              425Additional paid-in capital (Note
      17)
                                              
                                              
                                              187,795
                                              
                                              
                                              
                                              190,658Accumulated other comprehensive
      income (Note 20)
                                              
                                              
                                              -
                                              
                                              
                                              
                                              211Retained
      earnings
                                              
                                              
                                              55,505
                                              
                                              
                                              
                                              93,709Total stockholders'
      equity
                                              
                                              
                                              243,725
                                              
                                              
                                              
                                              285,003Total liabilities and
      stockholders' equity
                                              
                                              $
                                              566,957
                                              
                                              
                                              $
                                              641,907The accompanying notes are an
      integral part of these consolidated financial
      statements


F-4


AEGEAN
MARINE PETROLEUM NETWORK INC.


CONSOLIDATED
STATEMENTS OF INCOME


FOR
THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008




(Expressed in thousands of U.S. dollars
– except for share and per share data)




For
      the Year Ended December 31,2006
                                              
                                              
                                              2007
                                              
                                              
                                              2008REVENUES:Sales of marine petroleum products
      – third parties (Note 21)
                                              
                                              $
                                              775,816
                                              
                                              
                                              $
                                              1,331,144
                                              
                                              
                                              $
                                              2,757,181Sales of marine petroleum products
      – related companies (Notes 4 and 21)
                                              
                                              
                                              14,841
                                              
                                              
                                              
                                              14,705
                                              
                                              
                                              
                                              10,886Voyage
    revenues
                                              
                                              
                                              11,639
                                              
                                              
                                              
                                              5,758
                                              
                                              
                                              
                                              1,379Other
    revenues
                                              
                                              
                                              1,516
                                              
                                              
                                              
                                              1,266
                                              
                                              
                                              
                                              8,526Total
    revenues
                                              
                                              
                                              803,812
                                              
                                              
                                              
                                              1,352,873
                                              
                                              
                                              
                                              2,777,972OPERATING
      EXPENSES:Cost of marine petroleum products
      sold – third parties
                                              
                                              
                                              573,615
                                              
                                              
                                              
                                              1,091,769
                                              
                                              
                                              
                                              2,242,911Cost of marine petroleum products
      sold – related companies (Note 4)
                                              
                                              
                                              155,022
                                              
                                              
                                              
                                              159,943
                                              
                                              
                                              
                                              351,532Salaries, wages and related
      costs
                                              
                                              
                                              12,871
                                              
                                              
                                              
                                              24,363
                                              
                                              
                                              
                                              41,666Depreciation (Notes 7 and
      8)
                                              
                                              
                                              4,240
                                              
                                              
                                              
                                              6,373
                                              
                                              
                                              
                                              12,604Amortization of drydocking costs
      (Note 9)
                                              
                                              
                                              1,684
                                              
                                              
                                              
                                              3,172
                                              
                                              
                                              
                                              3,640Amortization of concession
      agreement (Note 3)
                                              
                                              
                                              -
                                              
                                              
                                              
                                              52
                                              
                                              
                                              
                                              313Management fees (Note
      4)
                                              
                                              
                                              223
                                              
                                              
                                              
                                              54
                                              
                                              
                                              
                                              -Gain on sale of vessel (Note
      7)
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (2,693
                                              )
                                              
                                              
                                              -Other operating expenses (Note
      14)
                                              
                                              
                                              25,697
                                              
                                              
                                              
                                              39,042
                                              
                                              
                                              
                                              73,157Total operating
      expenses
                                              
                                              
                                              773,352
                                              
                                              
                                              
                                              1,322,075
                                              
                                              
                                              
                                              2,725,823Operating
      income
                                              
                                              
                                              30,460
                                              
                                              
                                              
                                              30,798
                                              
                                              
                                              
                                              52,149OTHER
      INCOME/(EXPENSE):Write-off of deferred IPO
      costs
                                              
                                              
                                              (1,588
                                              )
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Interest and finance costs (Notes
      11, 12 and 15)
                                              
                                              
                                              (5,207
                                              )
                                              
                                              
                                              (3,473
                                              )
                                              
                                              
                                              (12,377
                                              )Interest
    income
                                              
                                              
                                              976
                                              
                                              
                                              
                                              1,990
                                              
                                              
                                              
                                              501Foreign exchange gains (losses),
      net
                                              
                                              
                                              (414
                                              )
                                              
                                              
                                              (1,569
                                              )
                                              
                                              
                                              1,521(6,233
                                              )
                                              
                                              
                                              (3,052
                                              )
                                              
                                              
                                              (10,355
                                              )Income before income
      taxes
                                              
                                              
                                              24,227
                                              
                                              
                                              
                                              27,746
                                              
                                              
                                              
                                              41,794Income taxes (Note
      19)
                                              
                                              
                                              (2
                                              )
                                              
                                              
                                              (8
                                              )
                                              
                                              
                                              (1,879
                                              )Net income
                                              
                                              $
                                              24,225
                                              
                                              
                                              $
                                              27,738
                                              
                                              
                                              $
                                              39,915Basic earnings per common
      share
                                              
                                              $
                                              0.84
                                              
                                              
                                              $
                                              0.65
                                              
                                              
                                              $
                                              0.94Diluted earnings per common
      share
                                              
                                              $
                                              0.84
                                              
                                              
                                              $
                                              0.65
                                              
                                              
                                              $
                                              0.94Weighted average number of shares,
      basic
                                              
                                              
                                              28,954,521
                                              
                                              
                                              
                                              42,417,111
                                              
                                              
                                              
                                              42,497,450Weighted average number of shares,
      diluted
                                              
                                              
                                              28,954,622
                                              
                                              
                                              
                                              42,505,704
                                              
                                              
                                              
                                              42,625,801The accompanying notes are an
      integral part of these consolidated financial
      statements





F-5


AEGEAN
MARINE PETROLEUM NETWORK INC.


CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY


FOR
THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008




(Expressed in thousands of U.S. dollars
– except for share and per share data)




Common
      Stock
                                                            
                                                            
                                                            Additional
                                                              Paid-in
                                                              Capital
                                                            
                                                            
                                                            Retained
                                                              Earnings
                                                            
                                                            
                                                            Accumulated
                                                              Other
      Comprehensive Income
                                                            
                                                            
                                                            Total#
      of Shares
                                                            
                                                            
                                                            Par
      ValueBALANCE, December 31,
      2005
                                                            
                                                            
                                                            28,035,000
                                                            
                                                            
                                                            $
                                                            280
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            $
                                                            9,247
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            $
                                                            9,527- Net
income
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            24,225
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            24,225- Dividends declared and paid
      ($0.14 per share)
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            (4,000
                                                            )
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            (4,000
                                                            )- Issuance of common stock (par
      value $0.01, at $14.00)
                                                            
                                                            
                                                            14,375,000
                                                            
                                                            
                                                            
                                                            144
                                                            
                                                            
                                                            
                                                            185,065
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            185,209-Share-based compensation (Note
      16)
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            38
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            38BALANCE, December 31,
      2006
                                                            
                                                            
                                                            42,410,000
                                                            
                                                            
                                                            $
                                                            424
                                                            
                                                            
                                                            $
                                                            185,103
                                                            
                                                            
                                                            $
                                                            29,472
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            $
                                                            214,999- Net
income
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            27,738
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            27,738- Dividends declared and paid
      ($0.04 per
    share)
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            (1,705
                                                            )
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            (1,705
                                                            )- Issuance of common stockin connection with an
      acquisition
                                                            
                                                            
                                                            20,000
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            773
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            773-Share-based compensation (Note
      16)
                                                            
                                                            
                                                            31,428
                                                            
                                                            
                                                            
                                                            1
                                                            
                                                            
                                                            
                                                            1,919
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            1,920BALANCE, December 31,
      2007
                                                            
                                                            
                                                            42,461,428
                                                            
                                                            
                                                            $
                                                            425
                                                            
                                                            
                                                            $
                                                            187,795
                                                            
                                                            
                                                            $
                                                            55,505
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            $
                                                            243,725- Net
income
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            39,915
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            39,915- Dividends declared and paid
      ($0.04 per
    share)
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            (1,711
                                                            )
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            (1,711
                                                            )-Share-based compensation (Note
      16)
                                                            
                                                            
                                                            82,180
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            2,863
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            2,863-Foreign currency translation
      adjustment(Note 20)
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            211
                                                            
                                                            
                                                            
                                                            211BALANCE, December 31,
      2008
                                                            
                                                            
                                                            42,543,608
                                                            
                                                            
                                                            $
                                                            425
                                                            
                                                            
                                                            $
                                                            190,658
                                                            
                                                            
                                                            $
                                                            93,709
                                                            
                                                            
                                                            $
                                                            211
                                                            
                                                            
                                                            $
                                                            285,003











The accompanying notes are an integral
part of these consolidated financial statements


F-6


AEGEAN
MARINE PETROLEUM NETWORK INC.


CONSOLIDATED
STATEMENTS OF CASH FLOWS


FOR
THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008





(Expressed in thousands of U.S.
dollars)




For
      the Year Ended December 31,2006
                                                    
                                                    
                                                    2007
                                                    
                                                    
                                                    2008Cash flows from operating
      activities:Net income
                                                    
                                                    $
                                                    24,225
                                                    
                                                    
                                                    $
                                                    27,738
                                                    
                                                    
                                                    $
                                                    39,915Adjustments to reconcile net
      income to net cash provided by operating
activities:Depreciation
                                                    
                                                    
                                                    4,240
                                                    
                                                    
                                                    
                                                    6,373
                                                    
                                                    
                                                    
                                                    12,604Provision for (release of)
      doubtfulaccounts
                                                    
                                                    
                                                    412
                                                    
                                                    
                                                    
                                                    497
                                                    
                                                    
                                                    
                                                    (280
                                                    )Share-based
      compensation
                                                    
                                                    
                                                    38
                                                    
                                                    
                                                    
                                                    1,920
                                                    
                                                    
                                                    
                                                    2,863Amortization
                                                    
                                                    
                                                    1,855
                                                    
                                                    
                                                    
                                                    3,457
                                                    
                                                    
                                                    
                                                    4,783Provision for income
      taxes
                                                    
                                                    
                                                    2
                                                    
                                                    
                                                    
                                                    8
                                                    
                                                    
                                                    
                                                    1,879Gain on sale of
      vessel
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (2,693
                                                    )
                                                    
                                                    
                                                    -Other non-cash
      charges
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (136
                                                    )(Increase) decrease
      in:Trade
      receivables
                                                    
                                                    
                                                    (985
                                                    )
                                                    
                                                    
                                                    (115,707
                                                    )
                                                    
                                                    
                                                    87,228Due from related
      companies
                                                    
                                                    
                                                    6,346
                                                    
                                                    
                                                    
                                                    (3,217
                                                    )
                                                    
                                                    
                                                    1,185Inventories
                                                    
                                                    
                                                    (24,250
                                                    )
                                                    
                                                    
                                                    (65,205
                                                    )
                                                    
                                                    
                                                    44,550Prepayments and other current
      assets
                                                    
                                                    
                                                    (1,836
                                                    )
                                                    
                                                    
                                                    (9,414
                                                    )
                                                    
                                                    
                                                    (1,187
                                                    )Increase (decrease)
      in:Trade
    payables
                                                    
                                                    
                                                    12,897
                                                    
                                                    
                                                    
                                                    27,213
                                                    
                                                    
                                                    
                                                    (35,680
                                                    )Other payables to related
      companies
                                                    
                                                    
                                                    18
                                                    
                                                    
                                                    
                                                    35
                                                    
                                                    
                                                    
                                                    27Accrued and other current
      liabilities
                                                    
                                                    
                                                    3,781
                                                    
                                                    
                                                    
                                                    3,743
                                                    
                                                    
                                                    
                                                    (14,314
                                                    )Decrease (increase) in other
      non-current assets
                                                    
                                                    
                                                    870
                                                    
                                                    
                                                    
                                                    (10
                                                    )
                                                    
                                                    
                                                    93Increase in other non-current
      liabilities
                                                    
                                                    
                                                    88
                                                    
                                                    
                                                    
                                                    320
                                                    
                                                    
                                                    
                                                    97Payments for
      drydocking
                                                    
                                                    
                                                    (10,637
                                                    )
                                                    
                                                    
                                                    (3,186
                                                    )
                                                    
                                                    
                                                    (6,890
                                                    )Net cash provided by (used in)
      operating activities
                                                    
                                                    
                                                    17,064
                                                    
                                                    
                                                    
                                                    (128,128
                                                    )
                                                    
                                                    
                                                    136,737Cash flows from investing
      activities:Advances for vessels under
      construction
                                                    
                                                    
                                                    (35,396
                                                    )
                                                    
                                                    
                                                    (55,529
                                                    )
                                                    
                                                    
                                                    (116,990
                                                    )Advances for vessel
      acquisitions
                                                    
                                                    
                                                    (34,895
                                                    )
                                                    
                                                    
                                                    (66,217
                                                    )
                                                    
                                                    
                                                    (21,665
                                                    )Corporate acquisitions, net of
      cash acquired
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (5,728
                                                    )
                                                    
                                                    
                                                    (9,065
                                                    )Net proceeds from sale of
      vessels
                                                    
                                                    
                                                    12,900
                                                    
                                                    
                                                    
                                                    8,276
                                                    
                                                    
                                                    
                                                    -Purchase of other fixed
      assets
                                                    
                                                    
                                                    (83
                                                    )
                                                    
                                                    
                                                    (409
                                                    )
                                                    
                                                    
                                                    (549
                                                    )Decrease in restricted
      cash
                                                    
                                                    
                                                    2,284
                                                    
                                                    
                                                    
                                                    2,915
                                                    
                                                    
                                                    
                                                    14,234Increase in restricted
      cash
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (8,000
                                                    )
                                                    
                                                    
                                                    (1,632
                                                    )Net cash used in investing
      activities
                                                    
                                                    
                                                    (55,190
                                                    )
                                                    
                                                    
                                                    (124,692
                                                    )
                                                    
                                                    
                                                    (135,667
                                                    )Cash flows from financing
      activities:Proceeds from long-term
      debt
                                                    
                                                    
                                                    41,714
                                                    
                                                    
                                                    
                                                    41,815
                                                    
                                                    
                                                    
                                                    93,636Repayment of long-term
      debt
                                                    
                                                    
                                                    (42,866
                                                    )
                                                    
                                                    
                                                    (280
                                                    )
                                                    
                                                    
                                                    (4,120
                                                    )Net change in short-term
      borrowings
                                                    
                                                    
                                                    (42,993
                                                    )
                                                    
                                                    
                                                    133,000
                                                    
                                                    
                                                    
                                                    (43,000
                                                    )Net change in short-term related
      company borrowings
                                                    
                                                    
                                                    (23,595
                                                    )
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -Financing costs
      paid
                                                    
                                                    
                                                    (520
                                                    )
                                                    
                                                    
                                                    (468
                                                    )
                                                    
                                                    
                                                    (915
                                                    )IPO proceeds, net of issuance
      costs
                                                    
                                                    
                                                    185,209
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -Dividends
    paid
                                                    
                                                    
                                                    (4,000
                                                    )
                                                    
                                                    
                                                    (1,705
                                                    )
                                                    
                                                    
                                                    (1,711
                                                    )Net cash provided by financing
      activities
                                                    
                                                    
                                                    112,949
                                                    
                                                    
                                                    
                                                    172,362
                                                    
                                                    
                                                    
                                                    43,890Net increase (decrease) in cash
      and cash equivalents
                                                    
                                                    
                                                    74,823
                                                    
                                                    
                                                    
                                                    (80,458
                                                    )
                                                    
                                                    
                                                    44,960Cash and cash equivalents at
      beginning of year
                                                    
                                                    
                                                    7,602
                                                    
                                                    
                                                    
                                                    82,425
                                                    
                                                    
                                                    
                                                    1,967Cash and cash equivalents at end
      of year
                                                    
                                                    $
                                                    82,425
                                                    
                                                    
                                                    $
                                                    1,967
                                                    
                                                    
                                                    $
                                                    46,927SUPPLEMENTAL
      CASH FLOW INFORMATIONCash paid during the year for
      interest:
                                                    
                                                    $
                                                    5,777
                                                    
                                                    
                                                    $
                                                    3,935
                                                    
                                                    
                                                    $
                                                    12,638Cash paid during the year for
      income taxes:
                                                    
                                                    $
                                                    18
                                                    
                                                    
                                                    $
                                                    8
                                                    
                                                    
                                                    
                                                    -Shares issued to acquire a
      business:
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    $
                                                    773
                                                    
                                                    
                                                    
                                                    -The accompanying notes are an
      integral part of these consolidated financial
      statements


F-7
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


1.      Basis
of Presentation:





The accompanying consolidated financial
statements include the accounts of Aegean Marine Petroleum Network Inc.
(hereinafter referred to as"Aegean") and its subsidiaries (Aegeanand its subsidiaries are hereinafter
collectively referred to as the"Company"). The Company is an independent
physical supplier and marketer of refined marine fuel and lubricants to ships in
port and at sea.




Aegean was formed on June 6, 2005, under
the laws of the Republic of theMarshall Islands, for the purpose of acquiring all
outstanding common shares of companies owned, directly and indirectly, by
Leveret International Inc. ("Leveret"), which is a personal holding company
owned and controlled by Aegean's founder and Head of Corporate Development, Mr.
Dimitris Melisanidis. The transaction described above constitutes a
reorganization of companies under common control, and has been accounted for in
a manner similar to a pooling of interests. Accordingly, the consolidated
financial statements of the Company have been presented giving retroactive
effect to the transaction described above, using consolidated historical
carrying costs of the assets and liabilities.




In December 2006,Aegeancompleted its initial public offering
of 14,375,000 common shares on the New York Stock Exchange ("2006 IPO") under the United States Securities Act
of 1933, as amended.




Material
Subsidiaries




(a)
            Aegean
      Marine Petroleum S.A. ("AMP"), incorporated in the Republic of
      Liberia on January 4, 1995, is engaged in the commercial purchase and sale
      of marine petroleum products and is the principal operating entity of the
      Company.




(b)
            Service
      Centers,which monitor and support the logistical aspects of each
      order in their respective geographical
  locations.




Company
      Name
            
            Country
      of
              Incorporation
            
            Date
      of
              IncorporationAegean
      Marine Petroleum LLC (the "UAE Service Center")*
            
            United
      Arab Emirates
            
            07/26/2000Aegean
      Bunkering Gibraltar Ltd. (the "Gibraltar Service Center")
            
            Gibraltar
            
            08/07/1997Aegean
      Bunkering Jamaica Ltd. (the "Jamaica Service Center")
            
            Jamaica
            
            11/25/2004Aegean
      Bunkering (Singapore) Pte. Ltd. (the "Singapore Service
      Center")
            
            Singapore
            
            06/07/2005Aegean
      Bunkering (Ghana) Limited (the "West Africa Service
    Center")
            
            Ghana
            
            05/18/2007Aegean
      Bunkers at Sea NV (the "NW Europe Service Center")****
            
            Belgium
            
            12/16/1999Portland
      Bunkers International Ltd. (the "UK Service Center")
            
            United
      Kingdom
            
            12/13/1999ICS
      Petroleum LTD – Vancouver***
            
            Canada
            
            11/25/1985ICS
      Petroleum (Montreal) LTD
            
            Canada
            
            06/03/1986West
      Coast Fuel Transport – Mexico**
            
            Canada
            
            09/10/1990




*
Also, the owner of the Aegean Flower, a 6,523 dwt (built in 2001) oil products
tanker purchased on January 5, 2004




**
Also, the owner of PT 25, a 2,560 dwt (built in 1988) oil products barge
purchased on July 1, 2008




***
Also, the owner of PT 36, a 3,730 dwt (built in 1980) oil products barge
purchased on July 1, 2008




****
Also, the owner of  Sara, a 7,389 dwt (built in 1990) oil products
tanker purchased on October 9, 2007




(c)
            Aegean
      Bunkering Services Inc. (the "Manager")was incorporated in the
      Marshall Islands on July 11, 2003 and provides all the vessel-owning
      companies listed below with a wide range of shipping services such as
      technical support and maintenance, insurance arrangement and handling,
      financial administration and accounting
  services.




F-8
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


1.      Basis
of Presentation: (Continued)





(d)
            Vessel-owning
      companies with operating vessels:





Vessel
      DetailsCompany
      Name
              
              Date
      of
                Incorporation
              
              Vessel
                Name
              Year
                Built
              Size
                (dwt)
              Date
                AcquiredAegean
      Seven Maritime Inc. ("Aegean VII")
              
              01/20/1998
              
              Aegean
      VII
              1984
              3,892
              02/04/1998Venus
      Holding Company ("Venus")
              
              10/13/1999
              
              Aegean
      IX
              1976
              4,999
              06/14/2001Clyde
      I Shipping Corp. ("Clyde")
              
              05/10/2004
              
              Aegean
      Tulip
              1993
              4,853
              05/20/2004Aegean
      Tiffany Shipping Pte. Ltd. ("Tiffany")
              
              05/10/2004
              
              Aegean
      Tiffany
              2004
              2,747
              07/07/2004Aegean
      Breeze Shipping Pte. Ltd. ("Breeze")
              
              03/27/2006
              
              Aegean
      Breeze I
              2004
              2,747
              07/07/2004Aegean
      X Maritime Inc. ("Aegean X")
              
              08/31/2004
              
              Aegean
      X
              1982
              6,400
              08/31/2004Carnaby
      Navigation Inc. ("Carnaby")
              
              12/14/2005
              
              Aegean
      Pride I
              1982
              11,538
              12/20/2005Baltic
      Navigation Company ("Baltic")
              
              09/19/2005
              
              Aegean
      Force
              1980
              6,679
              07/25/2006Mare
      Vision S.A. ("Mare")
              
              11/01/2005
              
              Aegean
      XI
              1984
              11,050
              05/03/2006Aegean
      Tanking S.A. ("Tanking")
              
              07/12/2006
              
              Fos
              1981
              67,980
              09/05/2006Vera
      Navigation S.A. ("Vera")
              
              09/14/2007
              
              Vera
              1985
              3,720
              10/09/2007Milos
      I Maritime Inc. ("Milos I")
              
              01/28/2005
              
              Hope
              1980
              10,597
              08/24/2007Ouranos
      Tanking S.A. ("Ouranos")
              
              02/09/2007
              
              Ouranos
              1983
              67,980
              02/20/2007Sea
      Breezer Marine S.A. ("Sea Breezer")
              
              04/02/2004
              
              Aegean
      Princess
              1991
              7,030
              05/25/2007Milos
      Shipping Pte. Ltd. ("Milos")
              
              11/23/2006
              
              Milos
              2007
              4,626
              06/29/2007Serifos
      Shipping Pte. Ltd. ("Serifos")
              
              11/23/2006
              
              Serifos
              2007
              4,664
              11/20/2007Pontos
      Navigation Inc. ("Pontos")
              
              09/09/2002
              
              Leader
              1985
              83,890
              09/21/2007Mykonos
      I Maritime Inc. ("Mykonos I")
              
              01/28/2005
              
              Mykonos
              2008
              4,626
              06/25/2008Santorini
      I Maritime Inc. ("Santorini I")
              
              01/28/2005
              
              Santorini
              2008
              4,629
              09/26/2008Amorgos
      Maritime Inc. ("Amorgos")
              
              01/28/2005
              
              Amorgos
              2007
              4,664
              12/21/2007Eton
      Marine Ltd. ("Eton")
              
              12/21/2005
              
              Patmos
              2008
              6,262
              11/18/2008Kithnos
      Maritime Inc. ("Kithnos")
              
              01/28/2005
              
              Kithnos
              2007
              4,626
              11/30/2007Paros
      Shipping Pte. Ltd. ("Paros")
              
              01/28/2005
              
              Paros
              2008
              4,629
              11/25/2008Kimolos
      Shipping Pte. Ltd. ("Kimolos")
              
              01/28/2005
              
              Kimolos
              2008
              4,664
              03/04/2008Syros
      I Maritime Inc. ("Syros I")
              
              01/28/2005
              
              Syros
              2008
              4,596
              04/21/2008Nevado
      Navigation SA ("Orion")
              
              04/10/2008
              
              Orion
              1991
              550
              05/29/2008





(e)
            Vessel-owning
      companies with vessels under
  construction:





Vessel
      DetailsCompany
      Name
              
              Date
      of
                Incorporation
              
              Hull
                Number
              Size
                (dwt)Naxos
      Marine Inc. ("Naxos")
              
              01/28/2005
              
              DN-3500-10
              4,600Andros
      Marine Inc. ("Andros")
              
              02/21/2007
              
              DN-3800-11
              4,600Dilos
      Marine Inc. ("Dilos")
              
              02/21/2007
              
              DN-3800-12
              4,600Ios
      Marine Inc. ("Ios")
              
              02/21/2007
              
              DN-3800-13
              4,600Sifnos
      Marine Inc. ("Sifnos")
              
              02/21/2007
              
              DN-3800-14
              4,600Tinos
      Marine Inc. ("Tinos")
              
              02/21/2007
              
              DN-3800-15
              4,600Ocean
      Dynamic Corp. ("Ocean")
              
              05/27/2005
              
              N
      2230007
              2,400Kerkyra
      Marine S.A. ("Kerkyra")
              
              09/26/2006
              
              QHS
      207
              5,500Ithaki
      Marine S.A. ("Ithaki")
              
              09/26/2006
              
              QHS
      208
              5,500Cephallonia
      Marine S.A. ("Cephallonia")
              
              09/26/2006
              
              QHS
      209
              5,500Paxoi
      Marine S.A. ("Paxoi")
              
              09/26/2006
              
              QHS
      210
              5,500Zakynthos
      Marine S.A. ("Zakynthos")
              
              09/27/2006
              
              QHS
      215
              5,500Lefkas
      Marine S.A. ("Lefkas")
              
              09/26/2006
              
              QHS
      216
              5,500Kythira
      Marine S.A. ("Kythira")
              
              09/26/2006
              
              QHS
      217
              5,500Tasman
      Seaways Inc. ("Tasman")
              
              12/21/2005
              
              QHS
      221
              5,500Benmore
      Services S.A. ("Benmore")
              
              12/21/2005
              
              QHS
      222
              5,500Ingram
      Enterprises Co. ("Ingram")
              
              01/10/2006
              
              QHS
      223
              5,500Santon
      Limited ("Santon")
              
              01/10/2006
              
              QHS
      224
              5,500Kassos
      Navigation SA ("Kassos")
              
              02/14/2008
              
              QHS
      225
              5,500Tilos
      Navigation SA ("Tilos")
              
              02/14/2008
              
              QHS
      226
              5,500Halki
      Navigation SA ("Halki")
              
              02/14/2008
              
              QHS
      227
              5,500Symi
      Navigation SA ("Symi")
              
              02/14/2008
              
              QHS
      228
              5,500





F-9
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)








1.      Basis
of Presentation: (Continued)





(f)
            Aegean
      Management Services M.C.was incorporated in Piraeus on February
      20, 2008 and provides all the vessel-maritime companies listed below with
      a wide range of shipping services such us technical support for ISM
      purposes, insurance arrangement and handling and accounting
      services.





(g)
            Vessel-maritime
      companies with operating vessels:





Vessel
      DetailsCompany
      Name
                
                Date
      of
                  Incorporation
                
                Vessel
                  Name
                Year
                  Built
                Size
                  (dwt)
                Date
                  AcquiredAegean
      Maistros Maritime Company ("Maistros")
                
                11/21/2007
                
                Aegean
      Maistros
                2008
                2,454
                04/09/2008Aegean
      Rose Maritime Company
                
                12/02/2002
                
                Aegean
      Rose
                1988
                4,935
                01/21/2003Aegean
      Daisy Maritime Company
                
                12/02/2002
                
                Aegean
      Daisy
                1988
                4,935
                01/21/2003Aegean
      Ship III Maritime Company
                
                06/23/2008
                
                Aegean
      III
                1990
                2,973
                07/08/2008Aegean
      Ship VIII Maritime Company
                
                06/23/2008
                
                Aegean
      VIII
                1989
                2,973
                07/08/2008Aegean
      Ship XII Maritime Company
                
                06/23/2008
                
                Aegean
      XII
                1979
                3,680
                07/08/2008





(h)
            Other
      companies with material assets and/or
  liabilities:





Company
      Name
            
            Date
      of
              Incorporation
            
            Country
      of Incorporation
            
            ActivityAegean
      Investments S.A. ("Aegean Investments")
            
            11/05/2003
            
            Marshall
      Islands
            
            Holding
      companyAegean
      Oil (USA), LLC ("Aegean USA")
            
            04/07/2005
            
            United
      States
            
            Marketing
      officeAegean
      Petroleum International Inc.
            
            02/22/2008
            
            Marshall
      Islands
            
            Fuel
      commerce





As of December 31, 2007and 2008, Aegean's ownership interest in all the above
subsidiaries,except for
theUAEServiceCenter, amounted to 100%.




During
the years ended December 31, 2006, 2007 and 2008, no one customer individually
accounted for more than 10% of the Company's total revenues.




2.      Significant
Accounting Policies:




Principles of
Combination and Consolidation: The consolidated financial statements have
been prepared in accordance with U.S. generally accepted accounting principles
and include for each of the three years in the period ended December 31, 2008,
the accounts and operating results of the Company. Intercompany balances and
transactions have been eliminated in consolidation.




Use of
Estimates: The preparation of consolidated financial statements in
conformity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period.  Actual results
could differ from those estimates.




Other
Comprehensive Income:The provisions of
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income," require separate presentation of certain transactions
that are recorded directly as components of stockholders' equity. During 2008,
the Company reported cumulative translation adjustments in accumulated other
comprehensive income, arising from the translation of the financial statements
of its Euro functional currency subsidiaries into U.S. dollars. As of December
31, 2007 and December 31, 2008, the amount of cumulative translation adjustments
was $0 and $ 211, respectively.




F-10
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


2.      Significant
Accounting Policies: (Continued)






Foreign Currency
Transactions:The functional currency
of Aegean and its material subsidiaries is the U.S. dollar because the Company
purchases and sells marine petroleum products in the international oil and gas
markets and because the Company's vessels operate in international shipping
markets; both of these international markets transact business primarily in U.S.
dollars. The Company's accounting records are maintained in U.S. dollars.
Transactions involving other currencies during the year are converted into U.S.
dollars using the exchange rates in effect at the time of the transactions. At
the balance sheet dates, monetary assets and liabilities denominated in other
currencies are adjusted to reflect the year-end exchange rates. Resulting gains
or losses are reflected separately in the accompanying consolidated statements
of income. In accordance with the Statement of Financial Accounting Standards
("SFAS") No. 52, "Foreign
Currency       Translation", the financial
statements of its Euro functional currency subsidiaries have been converted to
U.S. dollars by the application of the translation method (current rate
method).  All assets and liabilities are translated using the current
exchange rate.  Shareholders equity accounts are translated using
historical rates.  Revenues and expenses are translated using the
weighted average exchange rate.  Exchange differences on the
translation of entities with functional currencies other than the US dollar, are
recognized directly in the foreign currency translation reserve as other
comprehensive income.




Cash and Cash
Equivalents:The Company considers
highly liquid investments such as time deposits and certificates of deposit with
an original maturity of three months or less to be cash
equivalents.




Restricted Cash:Restricted cash consists of interest-bearing deposits with certain banks
as cash collateral against outstanding short-term facilities and retention
accounts that can only be used for the purposes of repayment of current portions
of long-term loans. Restricted cash also includes interest-bearing deposits with
an international bank as cash collateral against standby letters of credit
issued by the same bank to a shipyard (Note 12). Restricted cash is classified
as non-current when the funds are to be used to acquire non-current
assets.




Trade
Receivables, net:Management is responsible for approving
credit to customers, setting and maintaining credit standards, and managing the
overall quality of the credit portfolio. The Company performs ongoing credit
evaluations of its customers based upon payment history and the assessments of
customers' credit worthiness. The Company generally provides payment terms of
approximately 30 days. The Company continuously monitors collections and
payments from its customers and maintains a provision for estimated credit
losses based upon its historical experience with its customers, current market
conditions of its customers, and any specific customer collection issues.
Accounts receivable are reduced by an allowance for amounts that may become
uncollectible in the future. The Company had accounts receivable of $ 193,257,
and $132,589 before allowances for bad debts of $1,603 and $1,323 as of December
31, 2007 and 2008, respectively.




Insurance
Claims:Insurance claims are
recorded on the accrual basis once there remain no contingencies relating to the
claim. Insurance claims represent the claimable expenses, net of deductibles,
incurred through December 31 of each year, which are expected to be recovered
from insurance companies. Any remaining costs to complete the claims are
included in accrued liabilities.




Inventories:
Inventories comprise marine fuel oil ("MFO"), marine gas oil ("MGO"), lubricants
and victualling stores, which are stated at the lower of cost or market. Cost is
determined by the first in, first out method.




Vessel Cost:Vessels are stated at cost, which consists of the contract price and any
material expenses incurred upon acquisition (initial repairs, improvements and
delivery expenses, interest and on-site supervision costs incurred during the
construction periods). Subsequent expenditures for conversions and major
improvements are also capitalized when they appreciably extend the life,
increase the earning capacity or improve the efficiency or safety of the
vessels; otherwise these amounts are charged to expense as
incurred.




Advances
and milestone payments made to shipyards during construction periods are
classified as "Advances for vessels under construction and acquisitions" until
the date of delivery and acceptance of the vessel, at which date they are
reclassified to "Vessels, cost". Advances for vessels under construction also
include supervision costs, amounts paid under engineering contracts, capitalized
interest and other expenses directly related to the construction of the
vessels.




F-11
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)




2.      Significant
Accounting Policies: (Continued)






Amounts
of interest to be capitalized during the asset acquisition period are determined
by applying an interest rate to the average amount of accumulated expenditures
for the asset during the period.  The interest rate used is the
average cost of borrowing for the Company.




Vessel
Depreciation:Depreciation is computed
using the straight-line method over the estimated useful life of the vessels,
after considering the estimated salvage value. Each vessel's estimated salvage
value is equal to the product of its light-weight tonnage and the estimated
scrap rate. Management estimates the useful life of the Company's bunkering and
non-bunkering tankers to be 30 years and 25 years, respectively, from the date
of initial delivery from the shipyard. Management estimates the useful life of
the Company's floating storage facilities to be 30 years from the date of
acquisition. Secondhand vessels are depreciated from the date of their
acquisition through their remaining estimated useful life. However, when
regulations place limitations on the ability of a vessel to trade, its useful
life is adjusted to end at the date such regulations become
effective.




Intangible
Assets:Intangible assets
consist of a concession agreement in the United Kingdom and a goodwill. In
connection with the acquisition of Portland Bunkers International Limited, the
Company recorded an identifiable intangible asset, a concession agreement which
conveys to the Company an exclusive right to perform bunkering operations in the
port of Portland over a specified period of time. This asset is being amortized
over its useful life.




Goodwill
is not amortized, but reviewed as of December 31 of each year for impairment.
The Company tests for goodwill impairment using the two-step process described
in SFAS No. 142. The first step is a screen for potential impairment, while the
second step measures the amount of impairment. Fair values are derived using
discounted cash flow analysis.




Impairment of
Long-Lived Assets:SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-lived Assets," requires that long-lived assets and certain
identifiable intangible assets held and used or to be disposed of by an entity,
be reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of the assets may not be recoverable. When the estimate
of undiscounted cash flows, excluding interest charges, expected to be generated
by the use of the asset and its eventual disposal is less than its carrying
amount, the asset should be evaluated for an impairment loss. Measurement of the
impairment loss is based on the fair value of the asset as provided by third
parties. The Company regularly reviews the carrying amount of its vessels. The
Company had no impairment losses in any of the periods presented.




Accounting for
Drydocking Costs:The Company's vessels
are generally required to be drydocked every 30 to 60 months for major repairs
and maintenance that cannot be performed while the vessels are in operation. The
Company follows the deferral method of accounting for drydocking costs whereby
actual costs incurred are deferred and are amortized on a straight-line basis
over the period through the date the next drydocking is scheduled to become due.
Unamortized drydocking costs of vessels that are sold are written off against
income in the year of the vessel's sale.




Financing
Costs:Fees
incurred for obtaining new loans or refinancing existing loans are deferred and
amortized to interest expense over the life of the related debt using the
effective interest method. Unamortized fees relating to loans repaid or
refinanced are generally expensed in the period the repayment or refinancing is
made.




Pension and
Retirement Benefit Obligations:The vessel-owning
companies included in the combination and consolidation employ the crew on board
under short-term contracts (usually up to nine months) and accordingly, they are
not liable for any pension or post retirement benefits. The Company's full-time
Greek employees are covered by state-sponsored pension funds for which the
Company is required to contribute a portion of the monthly salary of these
employees to the fund (i.e., a defined contribution plan). Upon retirement of
these employees, the state-sponsored pension funds are responsible for paying
the employees' retirement benefits and accordingly, the Company has no
obligation for these benefits.




F-12
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


2.      Significant
Accounting Policies: (Continued)






Accounting for
Revenues and Expenses:Revenues are principally
earned from the physical supply of marine petroleum products via the Company's
bunkering tankers. In this respect, sales of marine petroleum products and cost
of sales of marine petroleum products are recorded in the period when the marine
petroleum products are loaded onto the customer's vessel. In Greece, revenues
are earned from the sale of marine petroleum products through a related party
physical supplier (refer to Note 4). These sales and the respective cost of
sales are recorded in the period when the related party physical supplier
delivers the marine petroleum products to the customer.




For
arrangements in which the Company physically supplies marine petroleum products
via its own bunkering tankers, cost of marine petroleum products sold represents
amounts paid by the Company for marine petroleum products sold in the period
being reported on.  For arrangements in which marine petroleum
products are purchased from the Company's related party physical supplier, cost
of marine petroleum products sold represents the total amount paid by the
Company to the physical supplier for marine petroleum products and the delivery
thereof to the Company's customer.




Revenues
are also generated from voyage and time charter agreements of the Company's
vessels. Time charter revenues are recorded over the term of the charter as
service is provided. Under a voyage charter the revenues and associated voyage
costs are recognized on a pro-rata basis over the duration of the
voyage.  Probable losses on voyages are provided for in full, at the
time such losses can be estimated.  A voyage is deemed to commence
upon the completion of discharge of the vessel's previous cargo and is deemed to
end upon the completion of discharge of the current cargo.




Operating
expenses are accounted for on the accrual basis.




Repairs and
Maintenance:All vessel repair and
maintenance expenses, including major overhauling (which are non-scheduled
repairs and maintenance work undertaken on a vessel's engine) and underwater
inspections are expensed in the year incurred. Such costs are included in other
operating expenses in the accompanying consolidated statements of
income.




Income
Taxes:The
Company accounts for income taxes using the liability method in accordance with
SFAS No. 109. SFAS No. 109 requires the provision of deferred income taxes for
the tax effects of temporary differences between financial reporting and tax
bases of assets and liabilities, using enacted tax rates in effect in the years
in which the differences are expected to reverse. Valuation allowances are
required to be recorded to reduce deferred tax assets when it is more likely
than not that a tax benefit will not be realized.




Earnings per
Common Share:Basic earnings per
common share are computed by dividing net income available to common
stockholders by the weighted average number of common shares deemed outstanding
during the year. Diluted earnings per common share reflect the potential
dilution that could occur if securities or other contracts to issue common stock
were exercised.




Derivatives:SFAS No. 133, as amended, establishes accounting and reporting standards
requiring that every derivative instrument (including certain derivative
instruments embedded in other contracts) be recorded in the balance sheet as
either an asset or liability measured at its fair value, with changes in the
derivatives' fair value recognized currently in earnings unless specific hedge
accounting criteria are met. During the three-year period ended December 31,
2008, the Company did not engage in any transaction involving derivative
instruments or have any hedging activities.




Contingencies:The Company accrues for a loss if the Company deems it probable that an
asset has been impaired or that a liability has been incurred at the date of the
financial statements and the amount of that loss can be reasonably estimated. If
the Company deems it reasonably possible that an asset has been impaired or that
a liability has been incurred, the nature of the contingency and an estimate of
the amount of loss is disclosed in the notes to the financial
statements.




F-13
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


2.      Significant
Accounting Policies: (Continued)






Fair Value of
Financial Instruments:The carrying values of cash, trade receivables,
trade payables and short-term borrowings are reasonable estimates of their fair
value due to the short-term nature of these financial instruments. The fair
values of long-term bank loans bearing interest at variable interest rates
approximate the recorded values. The Company has no long-term loans bearing
interest at fixed rates.






Recent
      Accounting Pronouncements:




Non Controlling
Interests.In December 2007, the Financial Accounting Standards Board
("FASB") issued SFAS No. 160, "Non controlling Interests in Consolidated
Financial Statements, an amendment of ARB No. 51".  This Statement
establishes accounting and reporting standards for the non-controlling interest
in a subsidiary and for the deconsolidation of a subsidiary. This statement is
effective as of the beginning of the first fiscal year that begins after
December 15, 2008. The adoption of this standard is not expected to have a
material effect on the consolidated financial statements.




Fair Value of
Financial Instruments.In February 2007, the FASB issued SFAS No. 159,
The Fair Value Option for Financial Assets and Financial Liabilities ("SFAS
159").  SFAS 159 permits entities to choose to measure many financial
instruments and certain other items at fair value, with changes in fair value
recognized in earnings.  SFAS 159 is effective as of the beginning of
the first fiscal year that begins after November 15, 2007.  The
adoption of SFAS 159 did not have a material impact on the Company's financial
statements.





Fair Value
Measurements.In September 2006, the FASB issued SFAS No. 157 "Fair
Value Measurements" ("SFAS 157"). This statement defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value measurements.
This statement does not require any new fair value measurements, but applies
under other accounting pronouncements that require or permit fair value
measurements. SFAS 157 is effective for fiscal years beginning after
November 15, 2007 and interim periods within those fiscal years. The
adoption of SFAS 157 did not have a material impact on the Company's financial
statements. FSP FAS 157-2 defers the Statement's effective date for certain
nonfinancial assets and liabilities to fiscal years beginning after November15,
2008, and interim periods within those years.





Hybrid Financial
Instruments. In February 2006, the FASB issued SFAS No. 155, "Accounting
for Certain Hybrid Financial Instruments—an amendment of FASB Statements No. 133
and 140" ("SFAS 155").  SFAS 155 amends SFAS 133 and SFAS No. 140,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities". SFAS 155 resolves issues addressed in SFAS 133 Implementation
Issue No. D1, "Application of Statement 133 to Beneficial Interests in
Securitized Financial Assets."  SFAS 155 was effective for the Company
for all financial instruments acquired or issued after January 1, 2007 and did
not have a material impact on the Company's financial statements.




Business
Combinations. In December 2007, the FASB issued SFAS No. 141(R),
"Business Combinations" ("SFAS No. 141(R)"). The Statement is a revision of SFAS
No. 141, "Business Combinations", issued in June 2001 and is designed to
improve the relevance, representational fairness and comparability and
information that a reporting entity provides about a business combination and
its effects. The Statement establishes principles and requirements for how the
acquirer recognizes assets, liabilities and non-controlling interests, how to
recognize and measure goodwill and the disclosures to be made. SFAS No. 141R
applies prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. As the provisions of SFAS 141R are applied
prospectively, the impact to the Company cannot be determined until the
transactions occur.




F-14
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


2.      Significant
Accounting Policies: (Continued)






Disclosures about
Derivative Instruments and Hedging Activities. In March 2008 the FASB
issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging
Activities" ("SFAS No. 161").  The new standard is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity's financial position, financial performance, and cash
flows.  It is effective for financial statements issued for fiscal years
and interim periods beginning after November 15, 2008.  The adoption of
this standard is not expected to have a material effect on the consolidated
financial statements.




Determination of
the Useful Life of Intangible Assets. In April 2008, the FASB issued FSP
No. FAS 142-3, "Determination of the Useful Life of Intangible Assets"
("FSP No. FAS 142-3"). FSP No. FAS 142-3 amends the factors
that should be considered in developing renewal or extension assumptions used to
determine the useful life of a recognized intangible asset under
SFAS No. 142, "Goodwill and Other Intangible Assets"
("SFAS No. 142") in order to improve the consistency between the
useful life of a recognized intangible asset under SFAS No. 142 and
the period of expected cash flows used to measure the fair value of the asset
under SFAS No. 141(R), "Business Combinations"
("SFAS No. 141(R)"), and other GAAP. FSP No. FAS 142-3 is
effective for fiscal years beginning after December 15, 2008. The adoption
of FSP No. FAS 142-3 will not have a material impact on the Company's
Consolidated Financial Statements.




Hierarchy of
Generally Accepted Accounting Principles. InMay
2008 the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles" ("FASB No. 162").  The new standard identifies
the sources of accounting principles and the framework for selecting the
principles used in the preparation of financial statements.  This
statement is effective sixty days following the SEC's approval of the Public
Company Accounting Oversight Board amendments to AU Section 411, "The meaning of
Present Fairly in Conformity With Generally Accepted Accounting Principles". The
adoption of SFAS No. 162 did not have a material impact on the Company's
financial statements.




On
June 16, 2008, the FASB issued FSP EITF 03-6-1 Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities. The
FASB concluded that all unvested share-based payment awards that contain
nonforfeitable rights to dividends or dividend equivalents (whether paid or
unpaid) are participating securities and shall be included in the computation of
earnings per share pursuant to the two-class method. The FSP is effective for
fiscal years beginning after December 15, 2008, and interim periods within those
fiscal years. Early adoption is prohibited. The Company will adopt this FSP in
2009 and will present earnings per share pursuant to the two-class
method.




Useful Life of
Intangible Assets. In April 2008, the FASB issued FASB Staff Position
142-3, "Determination of the Useful Life of Intangible Assets",
(FSP 142-3). FSP 142-3 amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
a recognized intangible asset under FASB Statement No. 142, "Goodwill and
Other Intangible Assets". FSP 142-3 shall be effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years, with early adoption prohibited. The
adoption of the provisions of FSP 142-3 is not expected to have a material
impact on the Company's financial statements.




F-15
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


3.      Significant
Acquisitions:






On October 9, 2007, the Company acquired
all of the outstanding share capital of Bunkers atSeaNV("BAS"), a marine fuel logistics
company incorporated inBelgium, for a total consideration of $4,764
(excluding direct acquisition costs). BAS purchased, sold and delivered marine
fuel to end users such as shipping companies (which complements Aegean's
business) and performed these functions in Northwestern Europe whereAegeanpreviously had no presence. The Company
entered into this transaction on the premise that Aegean's financial strength
and fleet of double-hull tankers, coupled with BAS's local knowledge, will
increase Aegean's market share in the Northwestern European offshore bunkering
market.




The following table presents the
purchase accounting adjustments as of the acquisition date. The Company believes
that the resulting balance sheet reflects the fair value of the assets and
liabilities at the acquisition date.




Adjusted Purchase
      PriceCash consideration to
      sellers
                                                  
                                                  
                                                  3,991Equity consideration to
      sellers
                                                  
                                                  
                                                  773Acquisition
      costs
                                                  
                                                  
                                                  76Adjusted purchase price
                                                  
                                                  
                                                  4,840Fair Value of Assets and
      Liabilities AcquiredCash and cash equivalents, net of
      overdrafts
                                                  
                                                  
                                                  5,818Trade
      receivables
                                                  
                                                  
                                                  9,639Inventories
                                                  
                                                  
                                                  1,301Trade
    payables
                                                  
                                                  
                                                  (15,767
                                                  )Other current assets/liabilities,
      net
                                                  
                                                  
                                                  (97
                                                  )Non current assets
                                                  
                                                  
                                                  3Total fair value of assets and
      liabilities acquired
                                                  
                                                  
                                                  897Goodwill
                                                  
                                                  
                                                  3,943







Goodwillconstitutes a premium paid by the
Company over the fair value of the net assets of ICS, which is attributable to
anticipated benefits from ICS'sunique position in the markets in which
it operates.




No acquired identifiable intangible
assets were recognized as part of the purchase price
allocation.




The following table presents the
unaudited proforma results as if the acquisition had occurred at the beginning
of each of the years ended December 31, 2006 and 2007:




Year Ended December
      31,2006
                      
                      
                      2007Total
    revenues
                      
                      
                      915,919
                      
                      
                      
                      1,471,189Net income
                      
                      
                      24,367
                      
                      
                      
                      28,301Basic earnings per
      share
                      
                      
                      0.84
                      
                      
                      
                      0.67Diluted earningsper share
                      
                      
                      0.84
                      
                      
                      
                      0.67




On October 31, 2007, the Company
acquired all of the outstanding share capital of Portland Bunkers International
Limited ("PBIL"), a company incorporated in the United Kingdom, for a total
consideration of $7,774 (excluding direct acquisition costs). PBIL is the
exclusive operator of theportofPortland(United Kingdom). The Company entered into this
transaction on the premise that Aegean's financial strength, logistics expertise
and fleet of double-hull tankers, coupled with the exclusive bunkering license,
will be accretive to earnings and cash flows.




F-16
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


3.      Significant
Acquisitions: (Continued)




The following table presents the
purchase accounting adjustments as of the acquisition date. The Company believes
that the resulting balance sheet reflects the fair value of the assets and
liabilities at the acquisition date.




Adjusted Purchase
      PriceCash consideration to
      sellers
                          
                          
                          7,774Acquisition
      costs
                          
                          
                          235Adjusted purchase
      price
                          
                          
                          8,009Fair Value of Assets and
      Liabilities AcquiredCash and cashequivalents
                          
                          
                          530Other current assets/liabilities,
      net
                          
                          
                          (293
                          )Concession
      agreement
                          
                          
                          7,772Total fair value of assets and
      liabilities acquired
                          
                          
                          8,009




An identifiable intangible asset was
recognized consisting of an exclusive 30 year concession agreement with theportofPortlandwhich givesAegeanan exclusive right to perform bunkering
operations at that port. This asset is being amortized on a straight-line basis
over the remaining contractual life of the agreement (from November 1, 2007 to
October 1, 2032).
Amortization expense of $52 and $313 was recognized for the year ended December
31, 2007 and 2008 respectively.




The
annual aggregate amortization expense expected to be recognized after December
31, 2008, are as follows:




Amount2009
                      3132010
                      3132011
                      3132012
                      3132013
                      313







The following table presents the
unaudited proforma results as if the acquisition had occurred at the beginning
of each of the years ended December 31, 2006 and 2007:




Year Ended December
      31,2006
                            
                            
                            2007Total revenues
                            
                            
                            806,095
                            
                            
                            
                            1,354,187Net income
                            
                            
                            24,172
                            
                            
                            
                            25,947Basic earnings per
      share
                            
                            
                            0.83
                            
                            
                            
                            0.61Diluted earningsper share
                            
                            
                            0.83
                            
                            
                            
                            0.61




On July 1, 2008, the Company acquired
all of the outstanding share capital of ICS Petroleum LTD, ICS Petroleum
(Montreal) LTD and West Coast Fuel Transport LTD (hereinafter collectively
referred to as"ICS"), a marine fuel logistics company
incorporated in Canada, for a total consideration of $14,000 (excluding direct
acquisition costs). ICS purchases, sells and delivers marine fuel to end users
such as shipping companies (which complements Aegean's business) and performs these functions
in several ports on the west coast of Canada and all eastern Canadian ports
where Aegean previously had no presence. The Company entered into this
transaction on the premise that Aegean would increase its presence in three
locations, the West and East coasts of North America andMexicowhere ICS has a
presence.




F-17
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


3.      Significant
Acquisitions: (Continued)




The following table presents the
purchase accounting adjustments as of the acquisition date. The Company believes
that the resulting balance sheet reflects the fair value of the assets and
liabilities at the acquisition date.







Adjusted Purchase
      priceCash consideration to
      sellers
                                                          
                                                          14,000Acquisition
      costs
                                                          
                                                          210Adjusted Purchase
      price
                                                          
                                                          14,210Fair value of Assets and
      Liabilities AcquiredCashand cash equivalents, net of
      overdrafts
                                                          
                                                          5,102Tradereceivables
                                                          
                                                          26,560Inventories
                                                          
                                                          2,740Fixed assets,
      net
                                                          
                                                          632Trade
    payables
                                                          
                                                          (19,951
                                                          )Other current assets/liabilities,
      net
                                                          
                                                          (14,451
                                                          )Non-current
      assets
                                                          
                                                          90Total fair value of Assets and
      Liabilities acquired
                                                          
                                                          722Goodwill
                                                          
                                                          13,488


Goodwill constitutes a premium paid by
the Company over the fair value of the net assets of ICS, which is attributable
to anticipated benefits from ICS' unique position in the markets in which it
operates.





No acquired identifiable intangible
assets were recognized as part of the purchase price
allocation.




The following table presents the
unaudited proforma results as if the acquisition had occurred at the beginning
of each of the years ended December31, 2007and2008:




Year Ended December
      31,2007
                          
                          
                          2008Total
    revenues
                          
                          
                          1,585,210
                          
                          
                          
                          3,088,010Net income
                          
                          
                          31,954
                          
                          
                          
                          40,298Basic earnings per
      share
                          
                          
                          0.75
                          
                          
                          
                          0.95Diluted earnings per
      share
                          
                          
                          0.75
                          
                          
                          
                          0.95




4.      Transactions
with Related Parties:




(a)
            Aegean Oil
      S.A. (the "Greek Subcontractor"):  The Greek
      Subcontractor, owned and controlled by relatives of Mr. Dimitris
      Melisanidis, is a diversified energy group principally engaged in the
      downstream gasoline industry in Greece where it manages a network of
      approximately 530 service stations. The Greek Subcontractor is managed by
      a full-time executive team and has no common management with the Company.
      In addition to its principal operations, the Greek Subcontractor is also a
      licensed trader and physical supplier of marine petroleum products in
      Greece. On December 30, 1999 and as amended on September 25, 2000, the
      Company signed a Bunkering Supply and Representation Agreement with the
      Greek Subcontractor whereby the Greek Subcontractor undertakes to sell and
      deliver marine petroleum products in transit to the Company's nominated
      customer vessels within Greek territorial waters. Under the contract, the
      Greek Subcontractor sells the marine petroleum products to the Company at
      an amount equal to the Greek Subcontractor's purchase cost of the marine
      petroleum products from selected Greek refineries, plus a
      margin.




F-18
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


4.      Transactions
with Related Parties: (Continued)






On
April 1, 2005, this contract was terminated and superceded by a ten-year Marine
Fuel Supply Service Agreement with the Greek Subcontractor. This contract
stipulates that the Company and the Greek Subcontractor must transact for a
minimum quantity of marine fuel per month, however neither party is required to
transact for more than a maximum quantity of marine fuel per month. Under the
contract, the Greek Subcontractor undertakes to sell the marine petroleum
products to the Company at an amount equal to the Greek Subcontractor's purchase
cost of the marine petroleum products from selected Greek refineries, plus a
margin. The margin will be reviewed and renegotiated annually between the
parties. Payment of the Greek Subcontractor's invoices will be made within 30
calendar days from the date of receipt of the invoice. Penalties of 10% will be
imposed on late payments. If requested, the Company undertakes to provide
security to the Greek Subcontractor by way of a standby letter of credit or
other mutually acceptable guarantee in relation to any outstanding balance from
time to time. The agreement terminates on March 31, 2015 unless any of the
following situations occur prior to the termination date: (i) The Greek
Subcontractor's petroleum trading license terminates or is revoked by the Greek
authorities, (ii) upon the breach by any party in the performance of any of its
obligations, as defined in the agreement, (iii) upon the liquidation or
bankruptcy of any party. The Company has a unilateral right to terminate the
agreement by serving 12 months' written notice.




During
the years ended December 2006, 2007 and 2008, the Company purchased from the
Greek Subcontractor marine petroleum products of $155,022, $159,943and $
351,532, respectively, all of which are included under cost of marine petroleum
products sold in the accompanying consolidated statements of income. As of
December 31, 2007 and 2008, the amounts due to the Greek Subcontractor were
$27,193 and $22,462, respectively, and are included under trade payables to
related companies in the accompanying consolidated balance sheets.




In
2008, the Company entered into an agreement with the Greek Subcontractor. The
Company is paying $40 per month, per vessel used, as a barging fee, to the Greek
Subcontractor for bunkering services on the Company's behalf to Piraeus and
other Greek ports. For the year ended December 31, 2008, we had paid $700 under
the bunkering agreement.




Also
the Subcontractor has entered into bareboat charter agreement with the owners of
Aegean III, Aegean VIII, Aegean XII, and Aegean Rose at $1 per day per vessel.
For the year ended December 31, 2008, the bareboat charter revenue was $413 and
is presented under other revenues in the accompanying consolidated statement of
income.




Additionally,
as of October 1, 2008, Aegean Oil S.A. and our subsidiary Aegean Maistros
Maritime Company, owner of Ro-Ro Maistros, has signed an agreement so that
Aegean Oil S.A. undertakes to ship 55,000 cubic meter of petroleum products per
annum at Euro 0.07 or $0.09 per cubic meter. For the year ended December 31,
2008, we had received $1,379 and are presented under voyage revenues in the
accompanying consolidated statement of income.




(b)
            Aegean
      Shipping Management S.A. and certain vessel-owning companies (hereinafter
      collectively referred to as "Aegean Shipping"):Aegean Shipping is
      owned by relatives of Mr. Dimitris Melisanidis and is the owner and
      operator of an international shipping fleet including Aframax and Panamax
      product tankers which are chartered out in the international spot markets.
      Aegean Shipping is managed by a full-time executive team and has no common
      management with the Company. The Company's material transactions with
      Aegean Shipping are described as
follows:






F-19
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


4.      Transactions
with Related Parties: (Continued)




(i)
            Aegean
      Shipping provided two of the Company's vessels, Aegean Hellas and Fos,
      with a wide range of shipping services such as technical support and
      maintenance, insurance arrangement and handling, financial administration
      and accounting services, in exchange for a management fee. Management fees
      incurred by the Company for the years ended December 31, 2006, 2007 and
      2008, amounted to $223, $54 and $0, respectively, and are separately
      disclosed in the accompanying consolidated statements of
      income.




(ii)
            Aegean
      Shipping is a customer of the Company. It purchases marine fuel and
      lubricants, which it consumes during the voyages of its vessels. The
      Company's sales of marine fuel and lubricants to Aegean Shipping for the
      years ended December 31, 2006, 2007 and 2008, amounted to $13,146, $13,509
      and $9,628, respectively, and are included under sales of marine petroleum
      products in the accompanying consolidated statements of
      income.




(iii)
            During
      the year ended December 31, 2006, the Company sold two newly-acquired
      second-hand tankers, Omega Af Donso and Trapper, to Aegean Shipping. These
      vessels were previously acquired by the Company from third-party sellers.
      No gain or loss was recognized by the Company on the sale of the vessels
      to Aegean Shipping.




(iv)
            During
      the year ended December 31, 2008, the Company purchased three double hull
      bunkering tankers, Aegean III, Aegean VIII and Aegean XII from Aegean
      Shipping for the total purchase price of
  $18,673.




As
of December 31, 2007 and 2008, the amounts due from Aegean Shipping were $$3,438
and $2,480, respectively, and are included in due from related companies in the
accompanying consolidated balance sheets.






(c)
            General
      Maritime Corporation ("General
Maritime"):




Aegean's
      Chairman of the Board, Mr. Peter C. Georgiopoulos, also serves as
      Chairman, President and Chief Executive Officer of General Maritime which
      is a publicly-traded tanker company with shares listed on the New York
      Stock Exchange. During the years ended December 31, 2007 and 2008, the
      Company's sales to General Maritime amounted to $1,196 and $1,258,
      respectively, which are included under sales of marine petroleum products
      in the accompanying consolidated statements of income. As of December 31,
      2007 and 2008, the amounts due from General Maritime were $45 and $21,
      respectively, which are included in due from related companies in the
      accompanying consolidated balance
sheets.




5.      Inventories:





The amounts shown in the accompanying
consolidated balance sheets are analyzed as follows:




December
      31,2007
                                        
                                        
                                        2008Held
      for sale:Marine
      Fuel Oil
                                        
                                        
                                        72,255
                                        
                                        
                                        
                                        44,564Marine
      Gas Oil
                                        
                                        
                                        22,950
                                        
                                        
                                        
                                        9,15195,205
                                        
                                        
                                        
                                        53,715Held
      for consumption:Marine
      fuel
                                        
                                        
                                        1,195
                                        
                                        
                                        
                                        517Lubricants
                                        
                                        
                                        646
                                        
                                        
                                        
                                        920Stores
                                        
                                        
                                        -
                                        
                                        
                                        
                                        33Victuals
                                        
                                        
                                        94
                                        
                                        
                                        
                                        1451,935
                                        
                                        
                                        
                                        1,615Total
                                        
                                        
                                        97,140
                                        
                                        
                                        
                                        55,330





F-20
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)





6.      Advances
for Vessels under Construction and Acquisitions:





On February 6, 2005, as amended, the
Company signed ten separate shipbuilding contracts with the Fujian Southeast
Shipyard ("Fujian") for ten4,600dwt, double skin, double
bottom, oil products
tankers(Hull Numbers DN-3500-1 to 10). The construction price of each
contract is $6,800 which is payable 10% in advance, 15% upon steel cutting, 15%
upon keel-laying, 15% upon launching and 45% upon delivery and acceptance.
Furthermore, on February 10, 2005, the Company signed ten separate contracts
with an engineering firm for the design, building supervision, representation,
procurement of machineries and supplies, and turn-key delivery of the ten
product oil tankers. The price of each such contract is $1,550 which is payable
5% in advance, 10% upon steel cutting, 40% upon launching and 45% upon delivery
and acceptance.




On June 3, 2005, as amended, the Company
signed two separate shipbuilding contracts with the Severnav Shipyard
("Severnav") for two 2,400 dwt, double skin, double
bottom,oil products
tankerswith roll-on
roll-off facilities for fuel trucks. The construction price of each contract is
Euro 6,835,000 which is payable 10% upon effectiveness of the contract, 15% upon
steel cutting, 15% upon keel-laying, 20% upon launching and 40% upon delivery
and acceptance.Furthermore, on August 30, 2005, the Company signed two
separate contracts with an engineering firm for the design, building
supervision, representation, procurement of machineries and supplies, and
turn-key delivery of the two product oil tankers. The price of each such
contract is Euro 1,500,000 which is payable 5% in advance, 10% upon steel
cutting, 40% upon launching and 45% upon delivery and acceptance.




On
January 13, 2006, the Company signed five separate shipbuilding contracts with
the Qingdao Hyundai Shipbuilding Co. Ltd. ("Qingdao Hyundai") for five double
skin, double bottom, 5,500 dwt class oil tankers (Hull Numbers QHS-220 to 224).
The construction price of each contract is $9,400 which is payable 10% in
advance, 20% upon steel cutting, 20% upon keel-laying, 25% upon launching and
25% upon delivery and acceptance. Furthermore, on February 24, 2006, the Company
signed five separate contracts with an engineering firm for the design, building
supervision, representation, procurement of machineries and supplies, and
turn-key delivery of the five 5,500 dwt class oil tankers. The price of each
such contract is $1,600, which is payable 5% in advance, 10% upon keel-laying,
40% upon launching and 45% upon delivery and acceptance.




On
October 18, 2006, the Company signed seven separate shipbuilding contracts with
Qingdao Hyundai for seven double skin, double bottom, 5,500 dwt class oil
tankers (Hull Numbers QHS-207 to 210 and QHS-215 to 217). The construction price
of each contract is $10,000 which is payable 20% in advance, 20% upon steel
cutting, 20% upon keel-laying, 20% upon launching and 20% upon delivery and
acceptance. Furthermore, on October 19, 2006, the Company signed seven separate
contracts with an engineering firm for the design, building supervision,
representation, procurement of machineries and supplies, and turn-key delivery
of the seven 5,500 dwt class oil tankers. The price of each such contract is
$1,600, which is payable 5% upon steel cutting, 10% upon keel-laying, 40% upon
launching and 45% upon delivery and acceptance.




On
May 25, 2007, as amended, the Company signed five separate shipbuilding
contracts with Fujian for five 4,600 dwt, double skin, double bottom, product
oil tankers (Hull Numbers DN-3800-11 to 15). The construction price of each
contract is $9,590 which is payable 8% in advance, 22% upon steel-cutting, 19%
upon keel-laying, 12% upon launching and 39% upon delivery and
acceptance.




On
February 28, 2008, and in connection with the call option agreement with the
Qingdao Hyundai Shipbuilding Co. Ltd. ("Qingdao Hyundai"), the Company signed
four separate shipbuilding contracts with Qingdao Hyundai for four 5,500 dwt,
double skin, double bottom product oil tankers (hull numbers QHS-225 to 228).
The construction price of each contract is $10,600 which is payable 30% in
advance, 20% upon steel-cutting, 20% upon keel-laying, 20% upon launching and
10% upon delivery and acceptance.




On
December 16, 2008, the Company signed a Memorandum of Agreement with a
third-party seller for the purchase of a Korean-flagged 1,615 dwt (built in
1992) double-hull Chemical tanker, the Ace Hana (renamed "Aegean Ace"), which it
intends to position at one of its ports as a bunkering tanker. The purchase
priceof this vessel
was $2,550 and the delivery of the vessel occurred on January 14,
2009.




F-21
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)




6.      Advances
for Vessels under Construction and Acquisitions: (Continued)




The amounts shown in the accompanying
consolidated balance sheets include milestone payments relating to the
shipbuildingand
engineeringcontracts and
any material related expenses incurred during the construction periods
capitalized in accordance with the accounting policy discussed in Note
2.




As
of December 31, 2008, the account, advances for vessels under construction and
acquisitions, is analyzed as follows:




December
      31, 2008Vessel
      Name
                      
                      Year
      of Expected
                        Delivery
                      
                      Contract
                        Amount
                      
                      Contract
                        Payments
                      Capitalized
                        Costs
                      TotalFujian
      ShipyardDN-3800-10
                      
                      2009
                      
                      8,425
                      
                      8,153
                      323
                      8,476DN-3800-11*
                      
                      2009
                      
                      9,590
                      
                      2,888
                      61
                      2,949DN-3800-12*
                      
                      2010
                      
                      9,590
                      
                      2,888
                      61
                      2,949DN-3800-13*
                      
                      2010
                      
                      9,590
                      
                      755
                      48
                      803DN-3800-14*
                      
                      2010
                      
                      9,590
                      
                      755
                      47
                      802DN-3800-15*
                      
                      2010
                      
                      9,590
                      
                      755
                      48
                      803Severnav
      ShipyardN
      2230007
                      
                      2009
                      
                      15,309
                      
                      8,932
                      1,125
                      10,057Qingdao
      Hyundai ShipyardQHS-207
                      
                      2009
                      
                      11,600
                      
                      6,240
                      248
                      6,488QHS-208
                      
                      2009
                      
                      11,600
                      
                      6,240
                      229
                      6,469QHS-209
                      
                      2009
                      
                      11,600
                      
                      6,240
                      212
                      6,452QHS-210
                      
                      2009
                      
                      11,600
                      
                      6,240
                      215
                      6,455QHS-215
                      
                      2009
                      
                      11,600
                      
                      6,240
                      201
                      6,441QHS-216
                      
                      2009
                      
                      11,600
                      
                      6,240
                      190
                      6,430QHS-217
                      
                      2009
                      
                      11,600
                      
                      6,240
                      188
                      6,428QHS-221
                      
                      2009
                      
                      11,000
                      
                      7,930
                      409
                      8,339QHS-222
                      
                      2009
                      
                      11,000
                      
                      4,940
                      129
                      5,069QHS-223
                      
                      2010
                      
                      11,000
                      
                      4,940
                      122
                      5,062QHS-224
                      
                      2010
                      
                      11,000
                      
                      2,900
                      163
                      3,063QHS-225*
                      
                      2010
                      
                      10,600
                      
                      5,300
                      88
                      5,388QHS-226*
                      
                      2010
                      
                      10,600
                      
                      5,300
                      83
                      5,383QHS-227*
                      
                      2010
                      
                      10,600
                      
                      5,300
                      76
                      5,376QHS-228*
                      
                      2010
                      
                      10,600
                      
                      3,180
                      65
                      3,245Acquired
      AssetsAEGEAN
      ACE
                      
                      2009
                      
                      2,550
                      
                      255
                      1
                      256FUJ
      LAUNCH
                      
                      2009
                      
                      379
                      
                      379
                      2
                      381Total
                      
                      242,213
                      
                      109,230
                      4,334
                      113,564





*Contract
amount does not include contract with the engineering firm which, as of December
31, 2008, was not signed. This contact is expected to be signed within
2009.





Interest on the advances paid by the
Company in respect of these contracts is computed at the weighted average
borrowing cost of the Company, for the duration of the construction period, and
capitalized in advances for vessels under construction on the accompanying
balance sheets.  Total interest capitalized
for the years ended December 31, 2006, 2007 and 2008 was $1,295, $2,314 and
$2,868, respectively.





F-22
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


6.
            Advances
      for Vessels under Construction and Acquisitions:
    (Continued)




During
the years ended December 31, 2007 and 2008, the movement of the account,
advances for vessels under construction and acquisitions, was as
follows:





Year Ended December
      31,2007
                                  
                                  
                                  2008Balance at beginning of
      period
                                  
                                  
                                  46,779
                                  
                                  
                                  
                                  84,378Advances for vessels under
      construction and related costs
                                  
                                  
                                  55,529
                                  
                                  
                                  
                                  118,396Payments for secondhand vessel
      acquisitions
                                  
                                  
                                  66,217
                                  
                                  
                                  
                                  21,665Vessels
      delivered
                                  
                                  
                                  (84,147
                                  )
                                  
                                  
                                  (110,875
                                  )Balance at end of
      period
                                  
                                  
                                  84,378
                                  
                                  
                                  
                                  113,564





As
of December 31, 2008, the remaining obligations under the construction and
supervision contracts are payable as follows:





Amount2009
                          
                          
                          107,6532010
                          
                          
                          25,330132,983







7.      Vessels:





The
amounts in the accompanying consolidated balance sheets are analyzed as
follows:





Vessel
      Cost
                                        
                                        
                                        Accumulated
                                          Depreciation
                                        
                                        
                                        Net
      Book
                                          ValueBalance,
      December 31, 2006
                                        
                                        
                                        70,943
                                        
                                        
                                        
                                        (9,662
                                        )
                                        
                                        
                                        61,281-
      Vessels acquired and delivered
                                        
                                        
                                        84,147
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        84,147-
      Vessels sold
                                        
                                        
                                        (5,224
                                        )
                                        
                                        
                                        1,540
                                        
                                        
                                        
                                        (3,684
                                        )-
      Depreciation for the year
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (6,190
                                        )
                                        
                                        
                                        (6,190
                                        )Balance,
      December 31, 2007
                                        
                                        
                                        149,866
                                        
                                        
                                        
                                        (14,312
                                        )
                                        
                                        
                                        135,554-
      Vessels acquired and delivered
                                        
                                        
                                        110,875
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        110,875-
      Depreciation for the year
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (12,294
                                        )
                                        
                                        
                                        (12,294
                                        )Balance,
      December 31, 2008
                                        
                                        
                                        260,741
                                        
                                        
                                        
                                        (26,606
                                        )
                                        
                                        
                                        234,135





On April 17, 2007, the Company sold the
vessel, Aegean Hellas, to a third-party purchaser for an aggregate price of
$8,791. The gain on sale of $2,693 resulted from the sale price reduced by the
related sales expense of $515, the carrying value of the asset of $3,684 and the
carrying value of unamortized dry-docking costs of $1,899, which is separately
reflected in the accompanying consolidatedstatement of incomefor theyearendedDecember 31, 2007.




F-23
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)




7.      Vessels:
(Continued)







During the year ended December 31, 2007,
the Company acquired and delivered the following vessels:




Vessel
      Name
            
            Date
      of
              operation
            
            
            Year
              Built
            Size
              (dwt)
            Total
      cost
              capitalizedAegean
      Princess
            
            06/12/2007
            
            
            1991
            7,030
            12,241Milos
      (DN-3500-1)
            
            08/06/2007
            
            
            2007
            4,626
            9,051Ouranos
            
            08/07/2007
            
            
            1983
            67,980
            18,378Leader
            
            09/21/2007
            
            
            1985
            83,890
            20,473Sara
            
            10/10/2007
            
            
            1990
            7,389
            6,017Vera
            
            10/10/2007
            
            
            1985
            3,720
            1,964Hope
            
            12/04/2007
            
            
            1980
            10,597
            7,144Serifos
            
            12/31/2007
            
            
            2007
            4,664
            8,87984,147







For the year ended December 31, 2008,
the Company acquired and delivered the following vessels:




Vessel
      Name
            
            Date
      of
              operation
            
            
            Year
              Built
            Size
              (dwt)
            Total
      cost
              capitalizedKithnos
      (DN-3500-3)
            
            01/18/2008
            
            
            2007
            4,626
            9,272Amorgos
      (DN-3500-4)
            
            02/02/2008
            
            
            2007
            4,664
            9,118Kimolos
      (DN-3500-5)
            
            03/29/2008
            
            
            2008
            4,664
            8,912Syros
      (DN-3500-6)
            
            06/16/2008
            
            
            2008
            4,596
            9,174PT
      25
            
            07/01/2008
            
            
            1988
            2,560
            170PT
      36
            
            07/01/2008
            
            
            1980
            3,730
            426Aegean
      III
            
            07/08/2008
            
            
            1990
            2,973
            5,500Aegean
      VIII
            
            07/08/2008
            
            
            1990
            2,973
            5,522Orion
            
            07/23/2008
            
            
            1991
            550
            1,096Maistros
      (N 2220000)
            
            09/01/2008
            
            
            2008
            2,454
            13,778Mykonos
      (DN-3500-7)
            
            10/01/2008
            
            
            2008
            4,626
            9,484Alpha
      Launch
            
            10/01/2008
            
            
            2004
            60
            663Aegean
      XII
            
            10/17/2008
            
            
            1979
            3,680
            7,651Santorini
      (DN-3500-8)
            
            12/12/2008
            
            
            2008
            4,629
            9,428Paros
      (DN-3500-9)
            
            12/20/2008
            
            
            2008
            4,629
            8,855Patmos
      (QHS-220)
            
            12/29/2008
            
            
            2008
            6,262
            11,826110,875







Cost of vessels at December 31,
2006, 2007 and 2008, includes $8,747, $19,402 and $ 27,906, respectively, of amounts not included in the
contract price of the vessels but which were material expenses incurred upon
acquisition and are capitalized in accordance with the accounting policy
discussed in Note 2.




As of December 31, 2008, all of the
Company's operational vessels, except for the
Aegean Flower, Aegean VII and Aegean IX, were mortgaged under the
Company's various debt agreements.




F-24
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)




8.      Other
Fixed Assets:





The
amounts in the accompanying consolidated balance sheets are analyzed as
follows:





Buildings
                                                                  
                                                                  
                                                                  Other
                                                                  
                                                                  
                                                                  TotalCost,
      December 31, 2006
                                                                  
                                                                  
                                                                  1,008
                                                                  
                                                                  
                                                                  
                                                                  341
                                                                  
                                                                  
                                                                  
                                                                  1,349-
      Additions
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  409
                                                                  
                                                                  
                                                                  
                                                                  409Cost,
      December 31, 2007
                                                                  
                                                                  
                                                                  1,008
                                                                  
                                                                  
                                                                  
                                                                  750
                                                                  
                                                                  
                                                                  
                                                                  1,758-
      Additions
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  549
                                                                  
                                                                  
                                                                  
                                                                  549Cost,
      December 31, 2008
                                                                  
                                                                  
                                                                  1,008
                                                                  
                                                                  
                                                                  
                                                                  1,299
                                                                  
                                                                  
                                                                  
                                                                  2,307Accumulated
      depreciation, December 31, 2006
                                                                  
                                                                  
                                                                  54
                                                                  
                                                                  
                                                                  
                                                                  89
                                                                  
                                                                  
                                                                  
                                                                  143-
      Depreciation expense
                                                                  
                                                                  
                                                                  33
                                                                  
                                                                  
                                                                  
                                                                  151
                                                                  
                                                                  
                                                                  
                                                                  184Accumulated
      depreciation, December 31, 2007
                                                                  
                                                                  
                                                                  87
                                                                  
                                                                  
                                                                  
                                                                  240
                                                                  
                                                                  
                                                                  
                                                                  327-
      Depreciation expense
                                                                  
                                                                  
                                                                  35
                                                                  
                                                                  
                                                                  
                                                                  264
                                                                  
                                                                  
                                                                  
                                                                  299Accumulated
      depreciation, December 31, 2008
                                                                  
                                                                  
                                                                  122
                                                                  
                                                                  
                                                                  
                                                                  504
                                                                  
                                                                  
                                                                  
                                                                  626Net
      book value, December 31, 2006
                                                                  
                                                                  
                                                                  954
                                                                  
                                                                  
                                                                  
                                                                  252
                                                                  
                                                                  
                                                                  
                                                                  1,206Net
      book value, December 31, 2007
                                                                  
                                                                  
                                                                  921
                                                                  
                                                                  
                                                                  
                                                                  510
                                                                  
                                                                  
                                                                  
                                                                  1,431Net
      book value, December 31, 2008
                                                                  
                                                                  
                                                                  886
                                                                  
                                                                  
                                                                  
                                                                  795
                                                                  
                                                                  
                                                                  
                                                                  1,681








9.      Deferred
Charges:





The
amounts in the accompanying consolidated balance sheets are analyzed as
follows:





Drydocking
                                            
                                            
                                            Financing
      Costs
                                            
                                            
                                            TotalBalance,
      December 31, 2006
                                            
                                            
                                            9,884
                                            
                                            
                                            
                                            635
                                            
                                            
                                            
                                            10,519-
      Additions
                                            
                                            
                                            3,186
                                            
                                            
                                            
                                            468
                                            
                                            
                                            
                                            3,654-
      Disposals
                                            
                                            
                                            (1,899
                                            )
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (1,899
                                            )-
      Amortization for the year
                                            
                                            
                                            (3,172
                                            )
                                            
                                            
                                            (233
                                            )
                                            
                                            
                                            (3,405
                                            )Balance,
      December 31, 2007
                                            
                                            
                                            7,999
                                            
                                            
                                            
                                            870
                                            
                                            
                                            
                                            8,869-
      Additions
                                            
                                            
                                            7,126
                                            
                                            
                                            
                                            915
                                            
                                            
                                            
                                            8,041-
      Amortization for the year
                                            
                                            
                                            (3,640
                                            )
                                            
                                            
                                            (830
                                            )
                                            
                                            
                                            (4,470
                                            )Balance,
      December 31, 2008
                                            
                                            
                                            11,485
                                            
                                            
                                            
                                            955
                                            
                                            
                                            
                                            12,440





The
amortization for drydocking costs is separately reflected in the accompanying
consolidated statements of income. The amortization of financing costs is
included in interest and finance costs in the accompanying consolidated
statements of income.





10.
            Prepayments
      and Other Current Assets:





The
amounts in the accompanying consolidated balance sheets are analyzed as
follows:





December
      31,2007
                                  
                                  
                                  2008Insurance
      prepaid
                                  
                                  
                                  93
                                  
                                  
                                  
                                  410VAT
      receivable
                                  
                                  
                                  9,055
                                  
                                  
                                  
                                  7,273Other
      prepayments
                                  
                                  
                                  3,269
                                  
                                  
                                  
                                  6,048Total
                                  
                                  
                                  12,417
                                  
                                  
                                  
                                  13,731





F-25
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)





11.
            Short-term
      Borrowings:





On
December 19, 2006, as amended, Aegean and AMP, as co-borrowers, jointly and
severally entered into a Term Loan, Overdraft and Guarantee Facility Agreement
("2006 Senior Credit Facility") with an international bank for an amount of
$248,400. The revolving overdraft facility of up to $115,000 bore interest at
LIBOR plus 1.25%. The multi-currency revolving guarantee and letter of credit
facility of up to $100,000 charged a commission of 0.25% for documentary letters
of credit, and of 0.625% for standby letters of credit. The term loan of up to
$33,400 was used to refinance the secured term loan dated February 10, 2006 with
the same bank (refer to Note 12(c)).




On
December 21, 2007, the overdraft facility and guarantee and letter of credit
facility were cancelled and terminated. Accordingly, as of December 31, 2007,
only the term loan facility of $33,400 under the 2006 Senior Credit Facility was
in full force and effect, which expires 12 years from the delivery date of each
vessel.




On
December 20, 2007, AMP entered into an Overdraft, Guarantee and Letter of Credit
Facility Agreement ("2007 Senior Credit Facility") with a syndicate of two
international banks for an amount of $300,000. The 2007 Senior Credit Facility
would be used for working capital purposes and expired on December 31, 2008. The
revolving overdraft facility of up to $150,000 bore interest at LIBOR plus
1.25%. The multi-currency revolving guarantee and letter of credit facility of
up to $150,000 charged a commission of 0.25% for documentary letters of credit,
and of 0.625% for standby letters of credit.




The
2007 Senior Credit Facility was mainly secured by a first priority mortgage on
the Company's operational double hull tankers, except for the Milos and Serifos
(both of which are mortgaged under long-term debt) and the Aegean Flower, Aegean
VII and Aegean IX, and an undertaking by the Company to provide a first priority
mortgage on the Aegean Flower, Aegean VII and Aegean IX at the lender's request.
Furthermore, the 2007 Senior Credit Facility was secured by a general assignment
of the Company's trade receivables to be paid into an operating account held by
the bank. The 2007 Senior Credit Facility contained certain covenants which
included requirements to maintain the Company's listing on the New York Stock
Exchange, to maintain vessel insurance policies, to maintain minimum security of
120% of the outstanding facility amount and to ensure that Mr. Dimitris
Melisanidis controls at least 32% of the Company's outstanding common shares.
Furthermore, the credit facility contains financial covenants requiring the
Company to ensure that (i) consolidated book net worth, as defined, not be less
than $175,000, (ii) consolidated leverage ratio, as defined, not to exceed
0.65-to-one, and (iii) consolidated liquid funds, as defined, not be less than
$25,000.




On
March 11, 2008, the Company entered into a one year, annually-renewable
revolving overdraft facility with a Greek bank for an amount of $20,000. The
facility is secured by a first priority mortgage over the vessels, Vera, Sara
and Hope and bears interest at LIBOR plus 2.50%.  Furthermore, the
credit facility contains financial covenants requiring the Company to ensure
that (i) market adjusted consolidated book net worth, as defined, not be less
than $175,000, (ii) consolidated leverage ratio, as defined, not to exceed
0.65-to-one, and (iii) consolidated liquid funds, as defined, not be less than
$25,000.




On
September 30, 2008, the Company entered into a one year, renewable on January
31, 2009 and thereafter annually, revolving overdraft facility with
international banks for an amount of up to $1,000,000. The 2008 Revolving
Overdraft Facility bears interest at LIBOR plus 1.50% and is annually renewable
subject to the consent of the participant banks. The facility is structured in
such a way so that, depending on our working capital needs, it allows the amount
to be increased with funds from existing or future participant banks, without
changing the security documents and incurring new legal costs.  As of
October 9, 2008, the Company terminated the other existing overdraft facilities
except for the above revolving overdraft facility with a Greek bank for an
amount of $20,000.




As
of December 31, 2007, had an overdraft balance of $133,000 under the 2007 Senior
Credit Facility. As of December 31, 2008, the Company had an overdraft balance
of $90,000 under the 2008 Revolving Overdraft Facility.




F-26
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)









11.   Short-term
Borrowings: (Continued)







Total
interest incurred on short-term borrowings for the years ended December 31,
2006, 2007 and 2008 amounted to $2,839, $1,082 and $7,495, respectively, and is
included in interest expense and finance costs, in the accompanying consolidated
statements of income.







12.
            Long-term
      Debt:





The
amounts in the accompanying consolidated balance sheets are analyzed as
follows:





December
      31,Borrower(s)
                                                
                                                2007
                                                
                                                
                                                2008(a)
                                                Ocean
      and Sea Global
                                                
                                                
                                                15,093
                                                
                                                
                                                
                                                15,971(b)
                                                Serifos,
      Kithnos, Santorini, Paros and Naxos
                                                
                                                
                                                17,668
                                                
                                                
                                                
                                                30,312(c)
                                                Milos.
      Amorgos, Kimolos, Syros, Mykonos
                                                
                                                
                                                19,342
                                                
                                                
                                                
                                                31,020(d)
                                                Eton,
      Benmore and Ingram
                                                
                                                
                                                3,760
                                                
                                                
                                                
                                                14,172(e)
                                                Tasman
      and Santon
                                                
                                                
                                                4,512
                                                
                                                
                                                
                                                7,896(f)
                                                Kerkyra,
      Ithaki, Cephallonia, Paxoi,
                                                  Zakynthos,
      Lefkas and Kythira
                                                
                                                
                                                11,500
                                                
                                                
                                                
                                                28,000(g)
                                                Andros,
      Dilos, Ios, Sifnos and Tinos
                                                
                                                
                                                3,156
                                                
                                                
                                                
                                                6,650(h)
                                                Kassos,
      Tilos, Halki, Symi
                                                
                                                
                                                -
                                                
                                                
                                                
                                                15,100(i)
                                                Aegean
      III, VIII, XII
                                                
                                                
                                                -
                                                
                                                
                                                
                                                14,500Total
                                                
                                                
                                                75,031
                                                
                                                
                                                
                                                163,621Less:
      Current portion
                                                
                                                
                                                (3,650
                                                )
                                                
                                                
                                                (9,352
                                                )Long-term
      portion
                                                
                                                
                                                71,381
                                                
                                                
                                                
                                                154,269





(a)
            On
      October 26, 2005, as amended, Ocean and Sea Global, as co-borrowers,
      jointly and severally entered into a syndicated secured term loan with an
      international bank for an amount of Euro 13,300,000 to partially finance
      the construction costs of vessels N 2230007 and N 2220000 (two tranches of
      Euro 6,650,000 each). Each tranche is available in three advances, as
      defined in the loan agreement. Each tranche is repayable in 40 consecutive
      quarterly installments, with the first 12 being in the amount of Euro
      150,000 each and the remaining 28 being in the amount of Euro 110,000
      each, plus a balloon payment of Euro 1,770,000 payable with the last
      installment. The first installment of each tranche is repayable three
      months after the date of actual delivery of the respective
      vessel.




The
loan bears interest at LIBOR plus 1.40% during each vessel's pre-delivery period
and at LIBOR plus 1.30% during each vessel's post-delivery period. During the
years ended December 31, 2006, 2007 and 2008, the weighted average interest rate
(including the margin) was 4.33%, 5.57% and 6.11%, respectively, while at
December 31, 2007 and 2008, the interest rate (including the margin) was 6.12%
and 6.04%, respectively.




The
loan agreement contains financial covenants requiring the Company to ensure that
book net worth shall not be less than $100,000; that the ratio of total
liabilities to total assets shall not exceed 0.65-to-one; that the current ratio
shall not be less than 1.25-to-one and that cash and cash equivalents exceed 50%
of the current portion of long-term debt.




As
of December 31, 2007 and 2008, the outstanding balance of the loan was $15,093
(Euro 10,252,500) and $15,971 (Euro 11,476,250), respectively. The proceeds of
the loan have been placed in interest bearing cash collateral accounts as
security against standby letters of credit issued by the same bank to the
shipyard, which are included under restricted cash in the accompanying
consolidated balance sheets.




F-27
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


12.
            Long-term
      Debt: (Continued)







(b)
            On
      August 30, 2005, as amended, Serifos, Kithnos, Santorini, Paros and Naxos,
      as co-borrowers, jointly and severally entered into a syndicated secured
      term loan with an international bank for an amount of $35,500 to partially
      finance the construction costs of vessels DN-3500-2, DN-3500-3, DN-3500-8,
      DN-3500-9 and DN-3500-10, respectively (five tranches of $7,100 each).
      Each tranche is available in seven advances, as defined in the loan
      agreement. Each tranche is repayable in 40 consecutive quarterly
      installments, with the first 30 being in the amount of $120 each and the
      remaining ten being in the amount of $110 each, plus a balloon payment of
      $2,400 payable with the last installment. The first installment of each
      tranche is repayable three months after the date of drawdown of the
      respective delivery advance.




The
      loan bears interest at LIBOR plus 1.40% during each vessel's pre-delivery
      period and at LIBOR plus 1.30% during each vessel's post-delivery period.
      During the years ended December 31, 2006, 2007 and 2008, the weighted
      average interest rate (including the margin) was 6.57%, 6.73% and 4.42%,
      respectively, while at December 31, 2007 and 2008, the interest rate
      (including the margin) was 6.27% and 3.26%, respectively. As of December
      31, 2007 and 2008, the outstanding balance of the loan was $17,668 and
      $30,312, respectively.




The
loan agreement contains financial covenants requiring the Company to ensure that
book net worth shall not be less than $100,000; that the ratio of total
liabilities to total assets shall not exceed 0.65-to-one; that the current ratio
shall not be less than 1.25-to-one and that cash and cash equivalents exceed 50%
of the current portion of long-term debt.




(c)
            On
      February 10, 2006, Milos, Amorgos, Kimolos, Syros and Mykonos, as
      co-borrowers, jointly and severally entered into a secured term loan with
      an international bank for an amount of $33,400 to partially finance the
      construction costs of vessels DN-3500-1, DN-3500-4, DN-3500-5, DN-3500-6
      and DN-3500-7, respectively (five tranches of $6,680 each). Each tranche
      is available in four advances, as defined in the loan agreement. Each
      tranche is repayable in 48 consecutive quarterly installments, with the
      first 47 being in the amount of $140 each and the last installment being
      in the amount of $100. The first installment of each tranche is repayable
      three months after the date of drawdown of the respective delivery
      advance.




On
December 19, 2006, this facility was refinanced by a term loan (with identical
terms and conditions) with the same bank under the 2006 Senior Secured Credit
Facility.




The
loan bears interest at LIBOR plus 1.15% plus additional compliance costs. During
the years ended December 31, 2007 and 2008, the weighted average interest rate
(including the margin) was 6.37% and 3.97 %, respectively, while at December 31,
2007 and 2008, the interest rate (including the margin) was 6.07% and 2.55%
respectively. As of December 31, 2007 and 2008, the outstanding balance of the
loan was $19,342 and $ 31,020, respectively.




The
      loan agreement contains financial covenants requiring the Company to
      ensure that market value adjusted net worth shall not be less than
      $150,000; that minimum liquidity shall not less than $25,000; that the
      ratio of total liabilities to total assets shall not exceed
      0.65-to-one.




(d)
            On
      October 25, 2006, Eton, Benmore and Ingram, as co-borrowers, jointly and
      severally entered into a syndicated secured term loan with an
      international bank for an amount of $26,250 to partially finance the
      construction costs of vessels QHS-220, QHS-222 and QHS-223 (three tranches
      of $8,750 each). Each tranche is available in five advances, as defined in
      the loan agreement. Each tranche is repayable in 40 consecutive quarterly
      installments in the amount of $125 each, plus a balloon payment of $3,750
      payable together with the last installment. The first installment of each
      tranche is repayable three months after the date of drawdown of the
      respective delivery advance.




F-28
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


12.
            Long-term
      Debt: (Continued)







The
      loan bears interest at LIBOR plus 1.30% before delivery of each vessel and
      at LIBOR plus 1.1875% after such vessel's delivery. During the years ended
      December 31, 2007 and 2008, the weighted average interest rate (including
      the margin) was 6.42% and  4.60%, respectively, while at
      December 31, 2007 and 2008, the interest rate (including the margin) was
      6.04% and 3.14%, respectively. As of December 31, 2007 and 2008, the
      outstanding balance of the loan was $3,760 and $14,172,
      respectively.




The
      loan agreement contains financial covenants requiring the Company to
      ensure that book net worth shall not be less than $100,000; that the ratio
      of total liabilities to total assets shall not exceed 0.65-to-one; that
      the current ratio shall not be less than
  1.25-to-one.




(e)
            On
      October 27, 2006, Tasman and Santon, as co-borrowers, jointly and
      severally entered into a secured term loan with a Greek bank for an amount
      of $17,600 to partially finance the construction costs of vessels QHS-221
      and QHS-224 (two tranches of $8,800 each). Each tranche is available in
      five advances, as defined in the loan agreement. Each tranche is repayable
      in 40 consecutive quarterly installments in the amount of $154 each, plus
      a balloon payment of $2,640 payable together with the last installment.
      The first installment of each tranche is repayable three months after the
      date of delivery of the respective
vessel.




The
      loan bears interest at LIBOR plus 1.15% on the principal amount repayable
      in quarterly installments (for each tranche: $6,160) and at LIBOR plus
      1.25% on the principal amount repayable in a balloon payment (for each
      tranche: $2,640). During the years ended December 31, 2007 and 2008, the
      weighted average interest rate (including the margin) was 6.42% and 4.60%,
      respectively, while at December 31, 2007 and 2008, the interest rate
      (including the margin) was 5.99% and 2.62%, respectively. As of December
      31, 2007 and 2008, the outstanding balance of the loan was $4,512 and
      $7,896, respectively.




(f)
            On
      October 30, 2006, Kerkyra, Ithaki, Cephallonia, Paxoi, Zakynthos, Lefkas
      and Kythira, as co-borrowers, jointly and severally entered into a
      syndicated secured term loan with an international bank for an amount of
      $64,750 to partially finance the construction costs of vessels QHS-207,
      QHS-208, QHS-209, QHS-210, QHS-215, QHS-216 and QHS-217 (seven tranches of
      $9,250 each). Each tranche is available in five advances, as defined in
      the loan agreement. Each tranche is repayable in 40 consecutive quarterly
      installments in the amount of $125 each, plus a balloon payment of $4,250
      payable together with the last installment. The first installment of each
      tranche is repayable three months after the date of drawdown of the
      respective delivery advance.




The
      loan bears interest at LIBOR plus 1.15% before delivery of each vessel and
      at LIBOR plus 1.05% after such vessel's delivery. During the years ended
      December 31, 2007 and 2008, the weighted average interest rate (including
      the margin) was 6.53% and 4.22%, respectively, while at December 31, 2007
      and 2008, the interest rate (including the margin) was 6.12% and 3.00%,
      respectively. As of December 31, 2007 and 2008, the outstanding balance of
      the loan was $11,500 and $28,000,
respectively.




The
loan agreement contains financial covenants requiring the Company to ensure that
book net worth shall not be less than $100,000; that the ratio of total
liabilities to total assets shall not exceed 0.65-to-one; that the current ratio
shall not be less than 1.25-to-one and that cash and cash equivalents exceed 50%
of all debts and interest becoming due in the next 12 month period, excluding
working capital facilities and balloons.




(g)
            On
      July 5, 2007, Andros, Dilos, Ios, Sifnos and Tinos, as co-borrowers,
      jointly and severally entered into a syndicated secured term loan with an
      international bank for an amount of $37,560 to partially finance the
      construction costs of vessels DN-3800-11, DN-3800-12, DN-3800-13,
      DN-3800-14 and DN-3800-15 (five tranches of $7,512 each). Each tranche is
      available in advances, as defined in the loan agreement. Each tranche is
      repayable in 40 consecutive quarterly installments in the amount of $187
      each. The first installment of each tranche is repayable three months
      after the date of drawdown of the respective delivery
    advance.




F-29
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


12.
            Long-term
      Debt: (Continued)




On
      September 12, 2008, the Company amended the secured term loan which had
      entered into on July 5, 2007, for an amount of $37,560 with an
      international bank to partially finance the construction cost of vessels
      DN-3800-11, DN-3800-12, DN-3800-13, DN-3800-14 and DN-3800-15. This
      supplemental agreement increases the loan to an amount of
      $43,160.  The loan is available in five tranches of $8,632 each.
      Each tranche is repayable in 40 consecutive quarterly instalments of $216
      each. The first instalment of each tranche is repayable three months after
      the date of drawdown of the final
advance.




The
      loan bears interest at LIBOR plus 1.0%. The loan is collateralized by a
      first priority mortgage over each of the vessels.During
      the years ended December 31, 2007 and 2008, the weighted average interest
      rate (including the margin) was 6.06% and 4.07%, respectively, while at
      December 31, 2007 and 2008, the interest rate (including the margin) was
      5.76% and 3.36%, respectively. As of December 31, 2007 and 2008, the
      outstanding balance of the loan was $3,156 and $6,650,
    respectively.




The
      loan agreement contains financial covenants requiring the Company to
      ensure that Market value adjusted net worth shall not be less than
      $150,000; that minimum liquidity shall not be less than $25,000; that the
      ratio of total liabilities to total assets shall not exceed
      0.65-to-one.




(h)
            On
      April 24, 2008, Kassos, Tilos, Symi, and Halki, as co-borrowers, jointly
      and severally entered into a syndicated secured term loan with an
      international bank for an amount of $38,800 to partially finance the
      construction costs of the vessels QHS-225, QHS-226, QHS-227 and QHS-228
      (four tranches of $9,700 each). Each tranche is available in two advances,
      as defined in the loan agreement. Each tranche is repayable in 40 equal
      consecutive quarterly installments plus a balloon payment of $4,300
      payable with the last installment. The first installment of each tranche
      is repayable three months after the date of drawdown of the respective
      delivery advance. The loan bears interest at LIBOR plus 1.15% and is
      secured by the first priority mortgage on the five
  vessels.




During
      the year  2008, the weighted average interest rate (including
      the margin) was 3.84%, while at December 31, 2008, the interest rate
      (including the margin) was 3.54%. As of December 31, 2008, the outstanding
      balance of the loan was $ 15,100.




The
loan agreement contains financial covenants requiring the Company to ensure that
book net worth shall not be less than $175,000; that the ratio of total
liabilities to total assets shall not exceed 0.65-to-one; that the current ratio
shall not be less than 1.25-to-one and that cash and cash equivalents exceed
50%  of all debts and interest becoming due in the next 12 month
period, excluding working capital facilities and balloons.




(i)
            On
      July 8, 2008, the Company entered into a secured term loan facility with a
      Greek bank for an amount of $15,000. The facility is collateralized by a
      first priority mortgage over the vessels, Aegean III, Aegean VIII and
      Aegean XII and bears interest at LIBOR plus 1.25%. The loan is repayable
      in 20 equal consecutive quarterly installments plus a balloon payment of
      $5,000 payable with the last
installment.




During
      the year  2008, the weighted average interest rate (including
      the margin) was  3.78%, respectively, while at December 31,
      2008, the interest rate (including the margin) was 3.24%, respectively. As
      of December 31, 2008, the outstanding balance of the loan was $
      14,500.




The
      loan agreement contains financial covenants requiring the Company to
      ensure that Market value adjusted net worth shall not be less than
      $175,000; that minimum liquidity shall not less than $25,000; that the
      ratio of total liabilities to total assets shall not exceed
      0.65-to-one.







F-30
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


12.
            Long-term
      Debt: (Continued)







As
of December 31, 2008, the outstanding vessel-financing loans are generally
collateralized as follows:




●
            First
      priority assignment of the shipbuilding contracts and first priority
      mortgages over the vessels (when
completed);




●
            Assignments
      of insurance and earnings of the mortgaged vessels (when
      completed);




●
            An
      undertaking from the vessels'
manager.




The
vessel-financing loan agreements contain ship finance covenants including
restrictions as to changes in management and ownership of the vessels,
additional indebtedness and mortgaging of vessels without the bank's prior
consent as well as minimum requirements regarding the ratio of the market value
of the relevant vessel to the outstanding loan amount and the ratio of the
insured amount of the relevant vessel to the outstanding loan amount. In
addition, the borrowing companies and/or their managers must maintain working
capital accounts with the lending banks, as defined in the loan agreements.
Furthermore, the vessel-owning subsidiary companies are not permitted to pay any
dividends without the lenders' prior consent. The vessel-owning subsidiary
companies with outstanding loans had restricted net assets amounting to $(4,683)
and $(4,637), as of December 31, 2007 and 2008, respectively.




As
of December 31, 2008, all of the Company's vessels-under-construction as well as
newly-completed vessels, having a total carrying value of $220,704, have been
provided as collateral to secure the long-term debt discussed
above.




Total
interest incurred on long-term debt for the years ended December 31, 2006, 2007
and 2008 amounted to $2,779 and $2,958 and $5,384, respectively, and is included
in interest expense and finance costs in the accompanying consolidated
statements of income. Accrued interest expense on long-term debt as of December
31, 2007 and 2008 amounted to $236 and $480, respectively, and is included in
accrued and other current liabilities in the accompanying consolidated balance
sheets.




The
total amount available and unutilized under the Company's long-term debt
agreements was $124,754 as of December 31, 2008.




As
of December 31, 2008, the Company was in compliance with all financial covenants
on all its loans apart from the current ratio where a waiver has been
obtained.









The
annual principal payments required to be made after December 31, 2008, are as
follows:




Amount2009
                                    
                                    
                                    9,3522010
                                    
                                    
                                    12,2772011
                                    
                                    
                                    12,6722012
                                    
                                    
                                    12,4322013
                                    
                                    
                                    16,8892014
      and thereafter
                                    
                                    
                                    99,999163,621





F-31
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


13.   Commitments
and Contingencies:





(a)
            Long-term
      Supply Contracts:On December 3, 2004, the Company signed an
      eight-year Fuel Purchase Agreement with a government refinery in Jamaica
      for the supply of mainly MFO and MGO at a price equal to average PLATTS
      prices plus a margin. The contract stipulates that the Company and
      refinery are not required to transact for more than a maximum quantity of
      marine fuel per month; however, by mutual agreement, the maximum quantity
      per month may be revised upwards. Invoices become due thirty calendar days
      from the date of delivery. Interest on overdue payments accrues at a rate
      equal to the local overdraft rate in Jamaica. This agreement expires on
      December 31, 2012.




On
April 1, 2005, the Company signed a ten-year Marine Fuel Supply Service
Agreement with the Greek Subcontractor (refer to Note 4).




(b)
            Standby
      Letters Of Credit:  In the normal course of business, for
      certain suppliers, under certain long-term supply contracts, or under
      certain long-term construction contracts, the Company is required to post
      standby letters of credit in order to secure lines of credit. As of
      December 31, 2008, the total outstanding standby letters of credit
      amounted to $80,786. The Company has not defaulted on payment of any of
      its accounts payable so as to cause any of the issuers of the standby
      letters of credit to settle the Company's accounts payable on the
      Company's behalf. All the standby letters of credit expire during 2009.
      The Company expects to extend the validity date of these instruments
      throughout the duration of the Company's contractual or operating
      relationships with the respective
suppliers.





(c)
            Environmental
      and Other Liabilities:The Company
      accrues for the cost of environmental liabilities when management becomes
      aware that a liability is probable and is able to reasonably estimate the
      Company's exposure. Currently, management is not aware of any such claims
      or contingent liabilities for which a provision should be established in
      the accompanying consolidated financial statements. The Company's
      Protection and Indemnity ("P&I") insurance policies cover third-party
      liability and other expenses related to injury or death of crew,
      passengers and other third parties, loss or damage of cargo, claims
      arising from collisions with other vessels, damage to other third-party
      property, and pollution arising from oil or other
      substances.  The Company's coverage under the P&I insurance
      policies, except for pollution, are unlimited. Coverage for pollution is
      $1 billion per vessel per incident.




(d)
            Legal
      Matters:On November 30, 2005, an unrelated third party filed a
      declaratory action against the Company before the First Instance Court of
      Piraeus. The plaintiff asserts that he was instrumental in the negotiation
      of the Company's eight-year Fuel Purchase Agreement with a government
      refinery in Jamaica, and seeks a judicial affirmation of his alleged
      contractual right to receive a commission of $1 per metric ton over the
      life of that contract, which as per the plaintiff's calculation, amounts
      to $10,080 over a period of 12 years. In 2007, the Court of First Instance
      ruled that the claim is maritime-related and not within its jurisdiction.
      Accordingly, the claim was referred to the Maritime Disputes Division of
      the Court of First Instance in Piraeus. The case was re-scheduled to be
      heard on May 13, 2008. The case was duly heard on May 13, 2008, before the
      Maritime Division of the Multi-Member First Instance Court of Piraeus.
      Judgment No.5493 was rendered by the Court on December 3, 2008, dismissing
      plaintiff's lawsuit having found same to be vague and therefore
      inadmissible for further examination on the merits. Also the Court has
      condemned the plaintiff to pay Euro 10,000 to AMP in reimbursement of its
      legal costs. The Judgment is open to appeal by the
    claimant.




Various
      claims, suits, and complains, including those involving government
      regulations and product liability, arise in the ordinary course of
      business. In addition, losses may arise from disputes with charterers and
      agents and insurance and other claims with suppliers relating to the
      operations of the Company's vessels.  Currently, management is
      not aware of any such claims or contingent liabilities or for which a
      provision should be established in the accompanying consolidated financial
      statements.


F-32
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


14.   Other
Operating Expenses:





The
amounts in the accompanying consolidated statements of income are analyzed as
follows:




Year
      Ended December 31,2006
                                                                    
                                                                    
                                                                    2007
                                                                    
                                                                    
                                                                    2008Bunkering
      tanker voyage expenses
                                                                    
                                                                    
                                                                    490
                                                                    
                                                                    
                                                                    
                                                                    784
                                                                    
                                                                    
                                                                    
                                                                    2,020Bunkering
      tanker insurance
                                                                    
                                                                    
                                                                    1,070
                                                                    
                                                                    
                                                                    
                                                                    1,315
                                                                    
                                                                    
                                                                    
                                                                    1,920Bunkering
      tanker repairs and maintenance
                                                                    
                                                                    
                                                                    1,940
                                                                    
                                                                    
                                                                    
                                                                    2,958
                                                                    
                                                                    
                                                                    
                                                                    4,417Bunkering
      tanker spares and consumable stores
                                                                    
                                                                    
                                                                    1,338
                                                                    
                                                                    
                                                                    
                                                                    1,874
                                                                    
                                                                    
                                                                    
                                                                    2,747Bunkering
      tanker consumption
                                                                      of
      marine petroleum products
                                                                    
                                                                    
                                                                    3,636
                                                                    
                                                                    
                                                                    
                                                                    7,865
                                                                    
                                                                    
                                                                    
                                                                    17,796Bunkering
      tanker other operating expenses
                                                                    
                                                                    
                                                                    1,292
                                                                    
                                                                    
                                                                    
                                                                    1,862
                                                                    
                                                                    
                                                                    
                                                                    3,097Operating
      cost of the Aegean Hellas
                                                                    
                                                                    
                                                                    6,367
                                                                    
                                                                    
                                                                    
                                                                    2,930
                                                                    
                                                                    
                                                                    
                                                                    -Cargo
      transportation
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    4,466
                                                                    
                                                                    
                                                                    
                                                                    12,661Provision
      for doubtful accounts
                                                                    
                                                                    
                                                                    412
                                                                    
                                                                    
                                                                    
                                                                    498
                                                                    
                                                                    
                                                                    
                                                                    (27
                                                                    )Storage
      costs
                                                                    
                                                                    
                                                                    3,425
                                                                    
                                                                    
                                                                    
                                                                    2,905
                                                                    
                                                                    
                                                                    
                                                                    4,044Port
      and related expenses
                                                                    
                                                                    
                                                                    306
                                                                    
                                                                    
                                                                    
                                                                    1,603
                                                                    
                                                                    
                                                                    
                                                                    4,403General
      and administrative
                                                                    
                                                                    
                                                                    2,928
                                                                    
                                                                    
                                                                    
                                                                    6,609
                                                                    
                                                                    
                                                                    
                                                                    10,723Broker
      commissions
                                                                    
                                                                    
                                                                    1,212
                                                                    
                                                                    
                                                                    
                                                                    1,437
                                                                    
                                                                    
                                                                    
                                                                    2,396Other
                                                                    
                                                                    
                                                                    1,281
                                                                    
                                                                    
                                                                    
                                                                    1,936
                                                                    
                                                                    
                                                                    
                                                                    6,960Total
                                                                    
                                                                    
                                                                    25,697
                                                                    
                                                                    
                                                                    
                                                                    39,042
                                                                    
                                                                    
                                                                    
                                                                    73,157





15.   Interest
and Finance Costs:





The
amounts in the accompanying consolidated statements of income are analyzed as
follows:





Year
      Ended December 31,2006
              
              
              2007
              
              
              2008Interest
      on long-term debt
              
              
              2,779
              
              
              
              2,958
              
              
              
              5,384Interest
      on short-term borrowings
              
              
              2,839
              
              
              
              1,082
              
              
              
              7,495Amortization
      of financing fees
              
              
              171
              
              
              
              233
              
              
              
              830Bank
      commissions, commitment fees and other charges
              
              
              713
              
              
              
              1,514
              
              
              
              1,536Capitalized
      interest (Note 6)
              
              
              (1,295
              )
              
              
              (2,314
              )
              
              
              (2,868
              )Total
              
              
              5,207
              
              
              
              3,473
              
              
              
              12,377





16.   Equity
Incentive Plan:





On
November 2, 2006, the Company's board of directors adopted the 2006 Equity
Incentive Plan ("2006 Plan"), under which the Company's officers, key employees
and directors are eligible to receive stock-based incentive awards including
restricted stock, restricted stock units (with or without dividend equivalents),
unrestricted stock, at-the-money nonqualified stock options and stock
appreciation rights. The 2006 Plan is administered by the Compensation Committee
of the Company's board of directors and the aggregate number of shares of common
stock reserved under this plan is 4,053,500. The Company's board of directors
may terminate the 2006 Plan at any time. The 2006 Plan expires ten years from
the date of adoption.




F-33
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


16.
            Equity
      Incentive Plan (Continued):





Effective
November 2, 2006, the Company adopted the provisions of SFAS No. 123,
"Share-Based Payment" ("SFAS 123R"). The Company measures stock-based
compensation cost at grant date, based on the estimated fair value of the award
which is determined by the closing price of the Company's common stock traded on
the NYSE on the grant date, and recognizes the cost as expense on a
straight-line basis (net of estimated forfeitures) over the employee over the
vesting period. The expense is recorded in salaries, wages and related costs in
the accompanying consolidated statements of income. Aegean is incorporated in a
non-taxable jurisdiction and accordingly, no deferred tax assets are recognized
for these stock-based incentive awards.




On
December 13, 2006, the Company made grants of restricted common stock in the
amount of 107,143 shares to a certain officer of the Company. The restricted
shares vest, and the restrictions lapse, with respect to each 20% lot of these
shares, on December 13, 2007 and on December 13 of each of the four years
thereafter.




On
February 27, 2007, the Company granted 109,167 shares of restricted common stock
to certain employees of the Company. The restricted shares vest, and the
restrictions lapse, with respect to each 25% lot of these shares, on February
27, 2008 and on February 27 of each of the three years thereafter.




On
May 22, 2007, the Company granted 29,600 shares of restricted common stock to
four non-executive members of the Board of Directors. With respect to 19,600
shares, the restricted shares vest and the restrictions lapse on the date of the
2008 Annual Meeting of Shareholders. The remaining 10,000 shares vest on the
date of the 2009 Annual Meeting of Shareholders.




On
September 7, 2007, the Company granted 10,000 shares of restricted common stock
to a certain employee of the Company. The restricted shares vest, and the
restrictions lapse, with respect to each 25% lot of these shares, on September
7, 2008 and on September 7 of each of the three years thereafter.




On
May 30, 2008, the Company made grants of restricted common stock aggregating
133,043 shares to certain officers and directors of the Company. With respect to
30,000 shares, the restrictions lapse in 20% lots over five years from the grant
date. With respect to 75,000 shares, the restrictions lapse in five years from
the grant date. With respect to 9,000 shares, the restriction lapse in one year
from the grant date. With respect to 19,043 shares, the restrictions lapse in
25% lots over four years from the grant date.




On
July 30, 2008, the Company granted 8,000 shares of restricted common stock to a
certain officers of the Company. The restricted shares vest, and the
restrictions lapse, with respect to each 25% lot of these shares, on July 1,
2009 and on July 1 of each of the three years thereafter.




On
August 11, 2008, the Company granted 10,000 shares of restricted common stock to
a certain officer of the Company. The restricted shares vest, and the
restrictions lapse, with respect to each 25% lot of these shares, on June 5,
2009 and on June 5 of each of the three years thereafter.




On
September 22, 2008, the Company granted 1,908 shares of restricted common stock
to  non-executive member of the Board of Directors. The restricted
shares vest and the restrictions lapse on the date of the 2009 Annual Meeting of
Shareholders.




On
December 29, 2008, the Company granted 375 shares of restricted common stock
to  non-executive member of the Board of Directors. The restricted
shares vest and the restrictions lapse on the date of the 2009 Annual Meeting of
Shareholders.




All
grants of restricted stock issued under the 2006 Plan are subject to accelerated
vesting upon certain circumstances set forth in the 2006 Plan.




F-34
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


16.   Equity
Incentive Plan: (Continued)







The
following table summarizes the status of the Company's unvested restricted stock
outstanding for the years ended December 31, 2007 and 2008:




Unvested
                                        Restricted
      Stock
                                      
                                      
                                      Weighted
      Average
                                        Grant Date Fair
      ValueAt
      December 31, 2006
                                      
                                      
                                      107,143
                                      
                                      
                                      
                                      15.75Granted
                                      
                                      
                                      148,767
                                      
                                      
                                      
                                      15.52Vested
                                      
                                      
                                      (28,828
                                      )
                                      
                                      
                                      16.43At
      December 31, 2007
                                      
                                      
                                      227,082
                                      
                                      
                                      
                                      15.51Granted
                                      
                                      
                                      153,326
                                      
                                      
                                      
                                      40.62Vested
                                      
                                      
                                      (82,180
                                      )
                                      
                                      
                                      20.31Forfeited
                                      
                                      
                                      (533
                                      )
                                      
                                      
                                      14.06At
      December 31, 2008
                                      
                                      
                                      297,695
                                      
                                      
                                      
                                      27.12







Total
compensation cost of $1,807 and $2,863 was recognized and included under
salaries, wages and related costs in the accompanying consolidated statements of
income for the years ended December 31, 2007 and 2008,
respectively.





As
of December 31, 2008, there was $5,516 of total unrecognized compensation cost
related to non-vested restricted stock awards. This unrecognized compensation
cost at December 31, 2008, is expected to be recognized as compensation expense
over a weighted average period of 3.0 years as follows:




Amount2009
                                  
                                  
                                  2,3012010
                                  
                                  
                                  1,4602011
                                  
                                  
                                  1,0172012
                                  
                                  
                                  7385,516







17.   Common
Stock and Additional Paid-In Capital:





Authorized
Capital




Aegean
was formed on June 6, 2005, under the laws of the Marshall Islands. Aegean's
authorized common and preferred stock since inception consisted of 100,000,000
common shares (all in registered form), par value $0.01 per share and 25,000,000
preferred shares (all in registered form), par value $0.01 per share. The
holders of the common shares are entitled to one vote on all matters submitted
to a vote of stockholders and to receive all dividends, if any. The Company's
board of directors shall have the authority to establish such series of
preferred stock and with such designations, preferences and relative,
participating, optional or special rights and qualifications, limitations or
restrictions as shall be stated in the resolutions providing for the issue of
such preferred stock.




Share Issuance and
Repurchase




On
June 8, 2005, Aegean issued 30,472,827 common shares (as restated for the
split-ups of common stock, described below), with a $0.01 par value per share,
to Leveret and Leveret contemporaneously contributed its direct and indirect
ownership in the companies described in Note 1 to Aegean.




F-35
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


17.   Common
Stock and Additional Paid-In Capital: (Continued)







On
October 3, 2005, Aegean acquired from Leveret 8% of the total then-issued and
outstanding common stock of Aegean, representing the entire interests in Leveret
of members of Mr. Dimitris Melisanidis' family (other than Mr. Melisanidis
himself) for a price of $35,000. Those shares were cancelled upon repurchase, in
accordance with a resolution of the board of directors of Aegean.  The
repurchased shares represented the entire beneficial ownership of those members
of Mr. Melisanidis' family. The excess of the purchase price over the par value
of the acquired shares is reflected first as a deduction from additional paid-in
capital and, upon exhaustion of the balance of additional paid-in capital, as a
deduction from retained earnings.




Initial Public
Offering




In
December 2006, the Company completed its initial public offering in the United
States under the United States Securities Act of 1933, as amended. In this
respect, 14,375,000 shares of common stock at par value $0.01 were issued for
$14.00 per share. The proceeds of the initial public offering, net of
underwriting commissions of $14,088, and net of offering expenses of $1,953,
amounted to $185,209.




Dividends




The
Company declared and paid dividends of $4,000, $1,705 and $1,711 during the
years ended December 31, 2006, 2007 and 2008, respectively.




Capital
Contributions




The
amounts presented in the accompanying consolidated balance sheets as additional
paid-in capital comprise (i) payments made by the stockholders at various dates
to finance vessel acquisitions in excess of the amounts of bank loans obtained
and advances for working capital, (ii) the estimated value of certain incidental
employee services provided to the Company by certain related companies for no
consideration, (iii) an allocation of costs for office services historically
shared with and the use of office equipment owned by related companies, and (iv)
the difference between the par value of the shares issued in the initial public
offering in December 2006 and the net proceeds obtained for those
shares.







18.   Earnings
Per Common Share:




The
computation of basic earnings per share is based on the weighted average number
of common shares outstanding during the year. The computation of diluted
earnings per share assumes the granting of unvested restricted stock awards
(refer to Note 17), for which the assumed proceeds upon grant are deemed to be
the amount of compensation cost attributable to future services and not yet
recognized using the treasury stock method, to the extent dilutive.




The
components of the calculation of basic earnings per common share and diluted
earnings per common share are as follows:


Year
      Ended December 31,2006
                                                  
                                                  
                                                  2007
                                                  
                                                  
                                                  2008Basic
      and diluted income
                                                    Available
      to common stockholders
                                                  
                                                  $
                                                  24,225
                                                  
                                                  
                                                  $
                                                  27,738
                                                  
                                                  
                                                  $
                                                  39,915Basic
      weighted average number
                                                    of
      common shares outstanding
                                                  
                                                  
                                                  28,954,521
                                                  
                                                  
                                                  
                                                  42,417,111
                                                  
                                                  
                                                  
                                                  42,497,450Add:
      Dilutive effect of unvested restricted stock
                                                  
                                                  
                                                  101
                                                  
                                                  
                                                  
                                                  88,593
                                                  
                                                  
                                                  
                                                  128,351Diluted
      weighted average number
                                                    of
      common shares outstanding
                                                  
                                                  
                                                  28,954,622
                                                  
                                                  
                                                  
                                                  42,505,704
                                                  
                                                  
                                                  
                                                  42,625,801Basic
      earnings per common share
                                                  
                                                  $
                                                  0.84
                                                  
                                                  
                                                  $
                                                  0.65
                                                  
                                                  
                                                  $
                                                  0.94Diluted
      earnings per common share
                                                  
                                                  $
                                                  0.84
                                                  
                                                  
                                                  $
                                                  0.65
                                                  
                                                  
                                                  $
                                                  0.94





F-36
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


19.   Income
Taxes:





The
principal operating entity of the Company, AMP, is incorporated in the Republic
of Liberia. Under regulations promulgated by the Liberian Ministry of Finance,
because AMP is considered a non-resident domestic corporation, it is not
required to pay any tax or file any report or return with the Republic of
Liberia in respect of income derived from its operations outside of the Republic
of Liberia. The Liberian Ministry of Justice has issued an opinion that these
regulations are valid.




AMP
has a branch office established in Greece. Under the laws of Greece, and in
particular Greek Law 3427/2005 which amended, replaced and supplemented
provisions of Law 89/1967 as of January 1, 2006, AMP is taxed on a cost plus
basis (5%) on expenses incurred by its branch office in Greece. Furthermore, AMP
is exempt from Greek income tax, as well as any other tax, charge or
contribution in favor of the Greek State or any third party, on income derived
from all its transactions worldwide in petroleum products, lubricants and
similar commodities, the object of which lies outside of Greece.




Generally,
under the laws of the countries of the vessel-owning companies' and the
Manager's incorporation and/or vessels' registration, the vessel-owning
companies and the Manager are not subject to tax on shipping income. However,
the vessel-owning companies are subject to registration and tonnage taxes, which
have been included in other operating expenses in the accompanying consolidated
statements of income.




During
the years presented, the Company is subject to statutory corporate income tax in
relation to its subsidiaries incorporated or operating in taxable jurisdictions.
The Company provided for current income taxes of $2, $8 and $1,879 for the years
ended December 31, 2006, 2007 and 2008, respectively, which is separately
reflected in the accompanying consolidated statements of income.







20.   Accumulated
Other Comprehensive Income:





During
2008, the Company reported cumulative translation adjustments in accumulated
other comprehensive income, arising from the translation of the financial
statements of its Euro functional currency subsidiaries into U.S. dollars. As of
December 31, 2007 and 2008, the amount of cumulative translation adjustments was
$0 and $211, respectively.







21.   Business
Segments and Geographical Information:







The
Company is primarily a physical supplier in the downstream marine petroleum
products industry. Marine petroleum products mainly consist of different
classifications of marine fuel oil, marine gas oil and lubricants.




The
Company cannot and does not identify expenses, profitability or other financial
performance measures by type of marine petroleum product supplied, geographical
area served, nature of services performed or on anything other than on a
consolidated basis (although the Company is able to segregate revenues on these
various bases). As a result, management, including the chief operating decision
maker, reviews operating results on a consolidated basis only. Therefore, the
Company has determined that it has only one operating segment.




F-37
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


21.   Business
Segments and Geographical Information: (Continued)




Information
concerning the Company's total sales of marine petroleum products is presented
as follows, attributed based on the point-of-delivery geographical location of
the customer vessels:





Year
      Ended December 31,2006
                                                
                                                
                                                2007
                                                
                                                
                                                2008Greece
                                                
                                                
                                                167,061
                                                
                                                
                                                
                                                165,231
                                                
                                                
                                                
                                                368,679United
      Arab Emirates
                                                
                                                
                                                180,453
                                                
                                                
                                                
                                                287,347
                                                
                                                
                                                
                                                512,281Gibraltar
                                                
                                                
                                                240,412
                                                
                                                
                                                
                                                433,524
                                                
                                                
                                                
                                                536,912Jamaica
                                                
                                                
                                                147,211
                                                
                                                
                                                
                                                212,093
                                                
                                                
                                                
                                                280,581Singapore
                                                
                                                
                                                39,496
                                                
                                                
                                                
                                                193,747
                                                
                                                
                                                
                                                555,735Northern
      Europe
                                                
                                                
                                                -
                                                
                                                
                                                
                                                37,443
                                                
                                                
                                                
                                                161,735Portland
      (UK)
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                62,018Ghana
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                106,082Canada
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                84,902Other
                                                
                                                
                                                16,024
                                                
                                                
                                                
                                                16,464
                                                
                                                
                                                
                                                99,142Total
                                                
                                                
                                                790,657
                                                
                                                
                                                
                                                1,345,849
                                                
                                                
                                                
                                                2,768,067







The
Company's long-lived assets mainly consist of bunkering tankers, which are
positioned across the Company's existing territories and which management,
including the chief operating decision maker, reviews on a periodic basis and
reposition among the Company's existing or new territories to optimize the
vessel per geographical territory ratio. The Company's vessels operate within or
outside the territorial waters of each geographical location and, under
international law, shipping vessels usually fall under the jurisdiction of the
country of the flag they sail. The Company's vessels are not permanently located
within particular territorial waters and the Company is free to mobilize all its
vessels worldwide at its own discretion.




The
following disclosure of the locations of long-lived assets is based on the
physical locations of the assets as of the dates shown. These locations are not
necessarily indicative of the territories that have jurisdiction over such
assets:




As
      of December 31,2007
                                                  
                                                  
                                                  2008Gibraltar
                                                  
                                                  
                                                  39,510
                                                  
                                                  
                                                  
                                                  53,939United
      Arab Emirates
                                                  
                                                  
                                                  31,364
                                                  
                                                  
                                                  
                                                  49,893Jamaica
                                                  
                                                  
                                                  10,975
                                                  
                                                  
                                                  
                                                  9,134Singapore
                                                  
                                                  
                                                  29,245
                                                  
                                                  
                                                  
                                                  34,963Northern
      Europe
                                                  
                                                  
                                                  19,639
                                                  
                                                  
                                                  
                                                  25,493Portland
      (UK)
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  3,200Greece
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  33,340Canada
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  615Ghana
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  12,663Other
                                                  
                                                  
                                                  6,252
                                                  
                                                  
                                                  
                                                  12,576Total
                                                  
                                                  
                                                  136,985
                                                  
                                                  
                                                  
                                                  235,816








F-38
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


22.   Subsequent
Events:





On
January 6, 2009, the Company was selected by Horizon Tangiers Terminal S.A.
(HTTSA), a special purpose consortium, as the exclusive bunkering company for
the new port in Tangiers, Morocco. Currently, the port serves approximately
7,000 vessels on an annual basis and is expected to increase to more than 10,000
vessels annually in 2010. The Company will provide retail bunkering services to
ships in port on an exclusive basis for a period of 25 to 35 years and will also
have the right to expand its operation beyond the port perimeter, which is
strategically located along the Strait of Gibraltar connecting the Atlantic
Ocean to the Mediterranean Sea.




On
January 7, 2009, the Company has taken delivery of the Naxos, a 4,600 dwt
double-hull bunkering tanker newbuild from Fujian Southeast Shipyard in China.
The vessel is expected to be deployed to the Company's Singapore
market.




On
January 15, 2009, the Company redeployed two Double-Hull Bunkering Tankers in
order to meet increased demand for modern tonnage in Piraeus – Greece. Also, it
has taken delivery of the Hana, a 1992-built 1,615 dwt double-hull bunkering
tanker to be renamed the Ace Hana. The Ace Hana is expected to be deployed to
the Company's Greek market.




On
February 9, 2009, the Company signed a supervision contract with an engineering
firm for DN-3800-11 to 15 for $1,200 per vessel and QHS-225 to 228 for $1,600
per vessel under construction.




On
February 10, 2009, the Company and Gulf Oil Marine Ltd., a member of Gulf Oil
Group, entered into a strategic partnership for the global distribution of
marine lubricants. This partnership will allow for the Company to join the
Sealub Alliance Network, a group recently formed by Gulf Oil Marine to
distribute high-quality marine lubricants.




On
February 26, 2009, the claimant who was seeking a commission under the Company’s
eight-year Fuel Purchase Agreement with a government refinery in Jamaica
commenced a new civil law suit against AMP and Mr. Melisanidis in the Commercial
Court of Paris, France, seeking a payment of approximately $180,000 of alleged
commissions and $400 of compensatory damages.  After an initial
hearing that was held on March 31, 2009, the court has scheduled a hearing in
the case for May 5, 2009.  The Company believes that this claim is
unwarranted and lacking in merit, and management believes that the Company will
not incur a material loss in connection with this lawsuit.




On
March 16, 2009 the Company renewed retroactively from February 1, 2009, for a
period of two years, until January 31, 2011, the senior secured syndicated
revolver, guarantee and letter of credit facility that was signed on September
30, 2008. The participant banks are the same group of international commercial
lenders. The amount of the facility is up to $1 billion, for working capital and
general corporate purposes.  The renewed facility had a committed
amount of up to $300,000, which decreased to $250,000 on March 31, 2009,
consisting of a guarantee and/or letter of credit line in an amount of up to
$197,500 and a cash advance limit in an amount of up to $250,000, which
decreased to $147,500 and $208,000 on March 31, 2009, respectively.




The facility
bears interest at a rate of LIBOR plus a margin of 2.50%, while documentary and
standby letters of credit are subject to commissions of 0.75% and 1.50%,
respectively.







F-39


SIGNATURES




The
registrant hereby certifies that it meets all of the requirements for filing on
Form 20-F and that it has duly caused and authorized the undersigned to sign
this annual report on its behalf.




AEGEAN MARINE PETROLEUM NETWORK
      INC.By:
                        /s/ E. Nikolas
      TavlariosName:E. Nikolas
      Tavlarios
                          Title:PresidentDate:April 22, 2009