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 THE SECURITIES EXCHANGE ACT
      OF 1934





OR





[X]
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
the fiscal year endedDecember
31, 2007





OR





[  ]
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
the transition period from _________________ to _________________





OR





[  ]
            SHELL
      COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 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)





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.





42,688,510
shares of common stock, par value $0.01 per share.





Indicate
by check mark if the registrant is 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 is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):





Large
      accelerated filer  [_]
            Accelerated
      filer [X]Non-accelerated
      filer
              (Do
      not check if a smaller
              reporting
      company) [_]
            Smaller
      reporting company [_]





Indicate
by check mark which financial statement item the registrant has elected to
follow.





Item 17
            
            X
            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
      IITEM 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
            17ITEM 4A – UNRESOLVED STAFF COMMENTS
            31ITEM 5 - OPERATING AND FINANCIAL REVIEW AND PROSPECTS
            31ITEM 6 - DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
            54ITEM 7 - MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
            59ITEM 8 - FINANCIAL INFORMATION
            62ITEM 9 - THE OFFER AND LISTING
            62ITEM 10 - ADDITIONAL INFORMATION
            63ITEM 11 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK
            67ITEM 12 - DESCRIPTION OF SECURITIES OTHER THAN EQUITY
      SECURITIES
            68PART
      IIITEM 13 - DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
            68ITEM 14 - MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
              AND USE OF PROCEEDS
            68ITEM 15 - CONTROLS AND PROCEDURES
            68ITEM 16A- AUDIT COMMITTEE FINANCIAL EXPERT
            69ITEM 16B- CODE OF ETHICS
            70ITEM 16C- PRINCIPAL ACCOUNTANT FEES AND RELATED SERVICES
            70ITEM 16D- EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
      COMMITTEE
            70ITEM 16E- PURCHASES OF EQUITY SECURITIES BY ISSUER AND
      AFFILIATES.
            70PART
      IIIITEM 17 - FINANCIAL STATEMENTS
            70ITEM 18 - FINANCIAL STATEMENTS
            70ITEM 19 - EXHIBITS
            70INDEX TO FINANCIAL STATEMENTS
            F-1














CAUTIONARY
STATEMENT 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 SEC 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 31,2003
              
              2004
              
              2005
              
              2006
              
              2007(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
              
              
              210,953
              
              
              
              247,436
              
              
              
              505,605
              
              
              
              790,657
              
              
              
              1,345,849Voyage
      revenues
              
              
              8,100
              
              
              
              14,983
              
              
              
              10,450
              
              
              
              11,639
              
              
              
              5,758Other
      revenues
              
              
              1,126
              
              
              
              593
              
              
              
              1,275
              
              
              
              1,516
              
              
              
              1,266Total
      revenues
              
              
              220,179
              
              
              
              263,012
              
              
              
              517,330
              
              
              
              803,812
              
              
              
              1,352,873Cost
      of marine petroleum products sold
              
              
              191,540
              
              
              
              222,439
              
              
              
              464,801
              
              
              
              728,637
              
              
              
              1,251,712Salaries,
      wages and related costs
              
              
              3,581
              
              
              
              5,052
              
              
              
              8,958
              
              
              
              12,871
              
              
              
              24,363Vessel
      hire charges
              
              
              3,390
              
              
              
              2,436
              
              
              
              518
              
              
              
              -
              
              
              
              -Depreciation
              
              
              809
              
              
              
              1,546
              
              
              
              2,226
              
              
              
              4,240
              
              
              
              6,373Amortization
      of drydocking costs
              
              
              240
              
              
              
              386
              
              
              
              636
              
              
              
              1,684
              
              
              
              3,172Amortization
      of concession agreement
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              52Management
      fees
              
              
              513
              
              
              
              183
              
              
              
              182
              
              
              
              223
              
              
              
              54Gain
      on sale of vessel
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (2,693
              )Other
      operating expenses
              
              
              9,043
              
              
              
              12,348
              
              
              
              16,629
              
              
              
              25,697
              
              
              
              39,042Operating
      income
              
              
              11,063
              
              
              
              18,622
              
              
              
              23,380
              
              
              
              30,460
              
              
              
              30,798Write-off
      of deferred offering costs (1)
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (1,588
              )
              
              
              -Interest
      and finance costs
              
              
              (425
              )
              
              
              (944
              )
              
              
              (2,347
              )
              
              
              (5,207
              )
              
              
              (3,473
              )Interest
      income
              
              
              90
              
              
              
              13
              
              
              
              70
              
              
              
              976
              
              
              
              1,990Foreign
      exchange gains (losses), net
              
              
              (78
              )
              
              
              (68
              )
              
              
              396
              
              
              
              (414
              )
              
              
              (1,569
              )Income
      taxes
              
              
              (6
              )
              
              
              (6
              )
              
              
              (24
              )
              
              
              (2
              )
              
              
              (8
              )Net
      income
              
              
              10,644
              
              
              
              17,617
              
              
              
              21,475
              
              
              
              24,225
              
              
              
              27,738Basic
      earnings per share (2)
              
              
              0.35
              
              
              
              0.58
              
              
              
              0.72
              
              
              
              0.84
              
              
              
              0.65Diluted
      earnings per share (2)
              
              
              0.35
              
              
              
              0.58
              
              
              
              0.72
              
              
              
              0.84
              
              
              
              0.65Weighted
      average number of shares, basic (2)
              
              
              30,472,827
              
              
              
              30,472,827
              
              
              
              29,878,398
              
              
              
              28,954,521
              
              
              
              42,417,111Weighted
      average number of shares, diluted (2)
              
              
              30,472,827
              
              
              
              30,472,827
              
              
              
              29,878,398
              
              
              
              28,954,622
              
              
              
              42,505,704Dividends
      declared per share (2)
              
              
              0.24
              
              
              
              0.28
              
              
              
              0.05
              
              
              
              0.14
              
              
              
              0.01


1


As
      of and for the Year Ended
                December 31,2003
              
              
              2004
              
              
              2005
              
              
              2006
              
              
              2007(in
      thousands of U.S. dollars, unless otherwise stated)Balance
      Sheet Data:Cash
      and cash equivalents
              
              
              1,872
              
              
              
              3,280
              
              
              
              7,602
              
              
              
              82,425
              
              
              
              1,967Total
      assets
              
              
              39,558
              
              
              
              78,573
              
              
              
              161,359
              
              
              
              315,877
              
              
              
              566,957Total
      debt
              
              
              13,896
              
              
              
              26,689
              
              
              
              101,236
              
              
              
              33,496
              
              
              
              208,031Total
      liabilities
              
              
              33,968
              
              
              
              54,112
              
              
              
              151,832
              
              
              
              100,878
              
              
              
              323,232Total
      stockholders’ equity
              
              
              5,590
              
              
              
              24,461
              
              
              
              9,527
              
              
              
              214,999
              
              
              
              243,725Other
      Financial Data:Gross
      spread on marine petroleum products (3)
              
              
              19,413
              
              
              
              24,997
              
              
              
              40,804
              
              
              
              62,020
              
              
              
              89,671Gross
      spread per metric ton of marine fuel sold (U.S. dollars)
    (3)
              
              
              17.3
              
              
              
              21.1
              
              
              
              23.2
              
              
              
              26.0
              
              
              
              25.9Net
      cash provided by (used in) operating activities
              
              
              4,206
              
              
              
              17,333
              
              
              
              1,475
              
              
              
              17,064
              
              
              
              (128,128
              )Net
      cash used in investing activities
              
              
              4,132
              
              
              
              29,360
              
              
              
              34,973
              
              
              
              55,190
              
              
              
              124,692Net cash provided by financing
      activities
              
              
              1,366
              
              
              
              13,435
              
              
              
              37,820
              
              
              
              112,949
              
              
              
              172,362Operating
      Data:Sales
      volume of marine fuel (metric tons) (4)
              
              
              1,109,887
              
              
              
              1,169,430
              
              
              
              1,746,377
              
              
              
              2,367,289
              
              
              
              3,437,269Number
      of service centers, end of period (5)
              
              
              3.0
              
              
              
              3.0
              
              
              
              4.0
              
              
              
              5.0
              
              
              
              6.0Number
      of operating bunkering tankers, end of period (6)
              
              
              4.0
              
              
              
              9.0
              
              
              
              10.0
              
              
              
              12.0
              
              
              
              17.0Average
      number of operating bunkering tankers (6)(7)
              
              
              3.7
              
              
              
              6.8
              
              
              
              9.0
              
              
              
              11.1
              
              
              
              13.5


(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. We calculate gross spread on
      marine petroleum products by subtracting from sales of marine petroleum
      products the cost of marine petroleum products sold and any 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.
              
              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:




2






For
      the Year Ended
              December 31,2003
            
            
            
            2004
            
            
            
            2005
            
            
            
            2006
            
            
            
            2007(in
      thousands of U.S. dollars, unless otherwise
  stated)Gross spread on marine petroleum
      products
            
            
            19,413
            
            
            
            24,997
            
            
            
            40,804
            
            
            
            62,020
            
            
            
            89,671Less: Sales of
      lubricants
            
            
            (1,500
            )
            
            
            (3,471
            )
            
            
            (3,824
            )
            
            
            (6,628
            )
            
            
            (7,313
            )Add: Cost of lubricants
      sold
            
            
            1,300
            
            
            
            3,097
            
            
            
            3,560
            
            
            
            6,173
            
            
            
            6,777Gross spread on marine
      fuel
            
            
            19,213
            
            
            
            24,623
            
            
            
            40,540
            
            
            
            61,565
            
            
            
            89,135Sales volume of marine fuel
      (metric tons)
            
            
            1,109,887
            
            
            
            1,169,430
            
            
            
            1,746,377
            
            
            
            2,367,289
            
            
            
            3,437,269Gross spread per metric ton of
      marine fuel sold (U.S. dollars)
            
            
            17.3
            
            
            
            21.1
            
            
            
            23.2
            
            
            
            26.0
            
            
            
            25.9





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 31,2003
            
            
            
            2004
            
            
            
            2005
            
            
            
            2006
            
            
            
            2007(in
      thousands of U.S. dollars)Gross spread on marine petroleum
      products
            
            
            19,413
            
            
            
            24,997
            
            
            
            40,804
            
            
            
            62,020
            
            
            
            89,671Add: Voyage
      revenues
            
            
            8,100
            
            
            
            14,983
            
            
            
            10,450
            
            
            
            11,639
            
            
            
            5,758Add: Other
      revenues
            
            
            1,126
            
            
            
            593
            
            
            
            1,275
            
            
            
            1,516
            
            
            
            1,266Add:Gain on sale of
      vessel
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            2,693Less: Salaries, wages and related
      costs
            
            
            (3,581
            )
            
            
            (5,052
            )
            
            
            (8,958
            )
            
            
            (12,871
            )
            
            
            (24,363
            )Less: Vessel hire
      charges
            
            
            (3,390
            )
            
            
            (2,436
            )
            
            
            (518
            )
            
            
            -
            
            
            
            -Less:
      Depreciation
            
            
            (809
            )
            
            
            (1,546
            )
            
            
            (2,226
            )
            
            
            (4,240
            )
            
            
            (6,373
            )Less:
      Amortization
            
            
            (240
            )
            
            
            (386
            )
            
            
            (636
            )
            
            
            (1,684
            )
            
            
            (3,224
            )Less: Management
      fees
            
            
            (513
            )
            
            
            (183
            )
            
            
            (182
            )
            
            
            (223
            )
            
            
            (54
            )Less: Other operating
      expenses
            
            
            (9,043
            )
            
            
            (12,348
            )
            
            
            (16,629
            )
            
            
            (25,697
            )
            
            
            (39,042
            )Add:Cargo transportation
      costs
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            4,466Operating
      income
            
            
            11,063
            
            
            
            18,622
            
            
            
            23,380
            
            
            
            30,460
            
            
            
            30,798





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 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.




3


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 various
      classifications of marine fuel oil, or MFO, and marine gas oil, or 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 25%, 24% and 3% of
      our total revenues for the years ended December 31, 2003, 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 and
      2007.




(5)
            The
      number of service centers includes our physical supply operations in the
      United Arab Emirates, Gibraltar, Jamaica, Singapore and Northern Europe,
      as well as Greece, where we conduct operations through our related
      company, Aegean Oil. The number of service centers 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. We acquired
      our service center in Northern Europe on October 9,
  2007.




(6)
            This
      data does not include our recently-sold Aframax tanker, the Aegean Hellas,
      our two Panamax tankers, the Fos and the Ouranos and our
      recently-purchased Aframax tanker, the Leader. We used the Aegean Hellas
      as an ocean-going tanker and currently use the Fos, the Ouranos and the
      Leader as floating storage
facilities.




(7)
            Average
      number of operating bunkering tankers is the number of operating bunkering
      tankers in our fleet for the relevant period, as measured by the sum of
      the number of days each bunkering tanker 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 tankers at the end
      of the period.





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




We
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 will depend on a number of factors which include our ability
to:




·
            increase
      our fleet of bunkering and specialty
tankers;




·
            identify
      suitable markets for expansion;




4


·
            consummate
      vessel acquisitions;




·
            integrate
      acquired vessels successfully with our existing
  operations;




·
            obtain
      required financing for our existing and new operations and business
      lines;




·
            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.




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 service centers that
we may open may be less profitable than our existing service
centers.






Businesses
we may acquire in the future will expose us to increased operating
risks.




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




·
            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 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.




We
may not be able to obtain financing for our growth or to fund our future capital
expenditures, which could negatively impact our results of operations, financial
condition and our ability to pay dividends.




In
order to fund future vessel acquisitions, new service centers 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 will reduce
cash available for dividend




5


distributions
to you. Our ability to obtain additional bank financing or to access the capital
markets for any future offerings may be limited by our financial condition at
the time of any such financing or offering, as well as by adverse market
conditions resulting from, among other things, general economic conditions and
contingencies and uncertainties that are beyond our control. Our failure to
obtain the funds for future vessel acquisitions, new service centers, products
or capital expenditures could impact our results of operations, financial
condition and our ability to pay dividends. 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, financial condition and ability to
pay dividends.




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, financial condition and our ability to pay dividends.




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 and our ability to pay dividends
to our shareholders.




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, financial condition and our ability to pay
dividends.




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, financial condition and our ability to pay dividends.




Our
purchase of secondhand vessels carries risks associated with the quality of
those vessels because secondhand vessels typically are not protected by
builders' or sellers' warranties.




Our
fleet renewal and expansion strategy includes the acquisition of secondhand
vessels as well as newbuildings.  Since December 2006, we have
acquired four secondhand bunkering tankers.  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; we have 26 vessels remaining to take delivery on. In
addition, we have entered into newbuilding contracts for the construction of two
specialty tankers and have an option to build four additional specialty
tankers.  All of our newbuilding contracts are with shipyards with
which we have had no prior business dealings. These projects are subject to the
risk of delay or defaults by the shipyards caused by, among other things,
unforeseen 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 substantial 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.




International
authorities and flag states may delay implementation of the phase-out of single
hull tankers 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
tankers of 5,000 dwt and above from




6


carrying
HGO, which includes most of the grades of marine fuel, as of October 2003
and as of April 2005, respectively, and are scheduled to ban all single
hull tankers 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 tankers
in 2010. The EU and the IMO, however, allow for exemptions. Under the EU
regulations, for example, oil tankers 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 tankers 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
tankers 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 tankers. 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.






The
nature of a portion of our assets and business in the United Kingdom could
expose us 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, financial condition and our ability to pay dividends.




We
have recently commenced the marketing of our own brand of marine lubricants and
plan to operate a fleet of double hull products tankers with roll-on roll-off
facilities and refueling capabilities for fuel trucks designed to make
distribution of gasoline and other refined petroleum products to island
economies. The marketing of marine lubricants and the acquisition and management
of specialty tankers will impose significant 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, financial
condition and our ability to pay dividends.




We
rely on purchases from key customers and our results of operations may decrease
if some of our key customers reduce or terminate their purchases.




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
operation.




7


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, 2007, 61 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. Any credit losses, 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 other 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.




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. 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.




Failure
by Aegean Oil or other third-party physical suppliers to provide services to us
and our customers as agreed could subject us to customer claims and negatively
affect our results.




We
have contracted with Aegean Oil 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 locations 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.




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 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.




8


The
value of our marine fuel inventory is subject to price fluctuations which may
result in 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 subject to currency exchange risks
which could negatively affect our results of operations, 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 higher 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, 2007, we incurred not more
than 4% of our operating expenses and general and administrative expenses in
currencies other than the U.S. dollar—primarily the Euro, 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, financial condition
and our ability to pay dividends. 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  Ziad Nakhleh, our Treasurer and Chief
Financial Officer.




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 labor interruptions
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 our Greek service center 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.




9


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.




We
may not be able to borrow amounts under our senior secured credit facility and
restrictive covenants in our senior secured credit facility may impose financial
and other restrictions that may limit our corporate activities.




In
December 2007, 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 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."




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




10


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 and our ability to pay dividends.
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, financial condition and ability
to pay dividends. 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.




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.




11


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




Terrorist
attacks, such as the attack on the MT Limburg in
October 2002, could adversely affect our operations and directly impact our
vessels or charterers. We conduct our marine fuel supply operations outside of
the United States, and our business, results of operations, cash flows,
financial condition and ability to pay dividends 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, own 35.3%
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 47.8% 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.




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 35.3% 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.




12


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.




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 John O. Hatab, who serve as our directors, are also directors of General
Maritime. Messrs. Georgiopoulos and Tavlarios are also executive officers
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;




·
            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.




13


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 consider establishing 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.




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.




Risk
Factors Relating to Our Industry




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.




Our
business is focused on the physical supply and marketing of refined marine fuel
and marine lubricants to the shipping industry. Adverse economic conditions in
the shipping industry, such as low charter rates or high operating costs, may
have an adverse effect on our customers. 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 weaken our financial
condition.




14


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,
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 costs.




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




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. Conversely, 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.




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.




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.




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,




15


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 and our ability to pay dividends.




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,
weaken our financial condition and affect our ability to pay dividends. 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, financial condition and our ability to pay
dividends.




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, weaken our financial condition and negatively
affect our ability to pay dividends.




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




The
market price of our common shares may fluctuate substantially 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.




16


In
addition, the stock market has experienced extreme price and volume
fluctuations. This volatility has often been unrelated to the operating
performance of particular companies. These broad market and industry forces may
seriously harm the market price of our common shares, regardless of our
operating performance.




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.




B.           Business
Overview




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. With service centers in Greece, Gibraltar, the United Arab
Emirates, Jamaica, Singapore, Belgium, the United Kingdom and Ghana, we believe
that we are one of a limited number of independent physical suppliers that owns
and operates a fleet of bunkering tankers and conducts physical supply
operations in multiple jurisdictions. As of March 17, 2008, we own a fleet of 18
double hull and three single hull bunkering tankers with an average
cargo-carrying capacity of approximately 5,864 deadweight tons, or dwt. We
provide fueling services to virtually all types of ocean-going and many types of
coastal vessels, such as oil tankers, container ships, drybulk carriers, cruise
ships and ferries. Our customers include a diverse group of ocean-going and
coastal ship operators and marine fuel traders, brokers and other
users.




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 use our bunkering tankers in our physical delivery
operations and do not generally charter them out to others. 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 October 2007, wehave acquired a marine
fuel logistics company based in Belgium with offshore operations in Northern
Europe. In addition, we have recently established a service center in Ghana,
West Africa, and acquired a company that operates a marine fuel terminal in the
United Kingdom. In January 2008, we have commenced our physical operations in
West Africa and expect to commence operations in the United Kingdom in April
2008. We plan to establish new service centers in other selected locations
around the world during the next several years and to pursue acquisition
opportunities as a means of expanding our service. As we increase our global
presence, we plan to expand our fleet




17


as
of March 17, 2008, by at least 26 new double hull bunkering tankers, which we
have firm orders on, during the next three years and may purchase additional
secondhand vessels in the future.




In
addition to expanding our bunkering tanker fleet, we have entered into
newbuilding contracts for the construction of two new double hull petroleum
products tankers with roll-on roll-off facilities and refueling capabilities for
fuel trucks, which we call specialty tankers. Our specialty tankers are
scheduled for delivery in the first half of 2008, and we have options, which we
plan to exercise, to build four additional specialty tankers. We plan to use
these specialty tankers for the distribution of gasoline and other refined
petroleum products to island economies. We view this business as complementary
to our bunkering business, involving relatively complex customer requirements
and requiring significant investment in management and software systems. We
currently intend to deploy our specialty tankers primarily under contracts of
affreightment and do not intend to charter out our specialty
tankers.




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, the Fos and Ouranos, with a cargo-carrying
capacity of approximately 68,000 dwt each, which we use as floating storage
facilities in Gibraltar and the United Arab Emirates, respectively. We also own
one double hull Aframax tanker, the Leader, with a cargo-carrying capacity of
approximately 83,900 dwt, which we have positioned in Ghana for use as a
floating storage facility.




In
addition to our bunkering operations, we have recently commenced the production
and marketing of our own brand of marine lubricants, Alfa Marine Lubricants.
Alfa Marine Lubricants can be used on most major vessels and reach the same
customers as our bunkering business. Alfa Marine Lubricants are currently
available in our service centers in Greece and Singapore. We plan to expand the
distribution of marine lubricants throughout our other service centers and
bunkering ports worldwide.




Our
Service Centers and Markets




Greece




We
currently service our customers through our related company, Aegean Oil, in the
port of Piraeus, Greece. Aegean Oil has a license, which we are not qualified to
obtain, to operate as a physical supplier of refined marine petroleum products
in Piraeus. For the year ended December 31, 2007, our sales of marine fuel in
Piraeus amounted to approximately $165.2 million. We currently compete here
against seven other physical suppliers: Eko-Elda Abee., BP Hellas S.A., Sekavin
S.A., Seka S.A., Jet Oil S.A., Eteka S.A., and Gallon Oil S.A.




In
addition to Piraeus, Aegean Oil has a license to operate as a physical supplier
of refined marine petroleum products in all ports in Greece, including Patras,
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, 2007, our sales of marine fuel in
Gibraltar amounted to approximately $433.5 million.




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,
double hull Panamax tanker, Fos. We currently compete here against four other
physical suppliers, CESPA (Gibraltar) Ltd., Vemaoil Company Ltd.,
Shell Company 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,
2007, our sales of marine fuel in Fujairah amounted to approximately $287.3
million.




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,
and the Vitol Group. We compete here against other physical
suppliers,




18


including
Fujairah National Bunkering Co. LLC, ENOC Bunkering (Fujairah) LLC, FAL Energy
Co. Ltd., Akron Trade and Transport, International Supply, and Oil
Marketing & Trading Inc.




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, 2007, our sales of marine
fuel in Jamaica amounted to approximately $212.1 million.




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 are not aware of any other physical suppliers of marine
petroleum products in Jamaica.




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,
2007, our sales of marine fuel in Singapore amounted to approximately $193.7
million.




We
purchase our fuel in Singapore from a variety of different suppliers including
BP Singapore Pte. Ltd., which also engages in supply operations in the
port. We compete here against other physical suppliers, including major oil
producers, Global Energy Trading Pte. Ltd., Consort Bunkers Pte. Ltd.
and Searights Maritime Services Pte. Ltd.




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




Belgium




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, 2007, our sales of marine fuel in
Northern Europe amounted to $37.4 million; this represents revenue realized
since October 9, 2007, the closing of the Bunker-at-Sea
acquisition.




We
purchase our fuel in Northern Europe from a variety of different suppliers,
including Total Belgium. 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, Lukoil Benelux BV and Bominflot BV. We support our offshore
bunkering operations in Northern Europe from our office in Antwerp, which we
lease.




Ghana




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. We are not aware
of any other competing physical suppliers of marine petroleum products in
Ghana.




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 expect to store our marine fuel in land-based storage tanks, which we
lease from Portland Port Limited. We intend to deploy two of our bunkering
tankers and commence operations of the terminal, including the supply of low
sulphur marine fuels, in April 2008.




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.




19


New
York City




In
December 2006, we established an executive office in New York City to oversee
our financial and other reporting functions.




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 our marine fuel
sales and services through our internal sales force located at our service
centers and our marketing offices located in New York City and Miami, Florida.
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.




Customers




We
market marine fuel and related services to a broad and diversified base of
customers. During the year ended December 31, 2004 sales made to the United
States Navy accounted for approximately 24% of our total revenues, and none of
our other customers accounted for more than 10% of our total revenues. During
the years ended December 31, 2005, 2006 and 2007, none of our customers
accounted for more than 10% of our total revenues. Our customers serviced during
the past four years, in addition to the United States government, 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, 2007, we
purchased marine petroleum products of approximately $159.9 million, or
approximately 12.8% 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, 2007, were made from unrelated
third-party suppliers and totaled $1,091.8 million, or approximately 87.2% 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.




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.




A
variety of governmental and private entities subject our tankers to both
scheduled and unscheduled inspections. These entities 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 tankers and may accelerate the




20


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.




Tanker
Restrictions




International
Maritime Organization




The
International Maritime Organization, or the IMO (the United Nations agency for
maritime safety), 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 relates to 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
a 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 must 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:




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
              
              Category 2—oil tankers
      of 20,000 dwt and above carrying crude oil, fuel oil, heavy diesel oil orlubricating
      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, 1982 or earlier; or
              2005
      for ships delivered after April 5, 1982
              
              
              
              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 date in accordance with the above
schedule. Under regulation 13G, the flag state may allow for some




21


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.




The
MEPC, in October 2004, adopted a unified interpretation to
regulation 13G that clarified the date of delivery for tankers that have
been converted. 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 of the oil tanker 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




·
            bitumen,
      tar and their emulsions.




Under
the 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
15(degrees)C higher than 900 kg/m(3) but lower than 945
kg/m(3), that
conform to certain technical specifications and, in the opinion of the such 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 such 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 600 dwt and above carrying HGO as
cargo if the ship is either engaged in voyages exclusively within an area under
the 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 ports 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 heavy grade oil that will
broaden the scope of regulation 21. On August 1, 2007, regulation 12A (an
amendment to Annex I) came into force requiring




22


oil
fuel tanks to be located inside the double hull in all ships with an aggregate
oil fuel capacity of 600 m(3) 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, which keel is laid on or after February 1, 2008.




European
Union




In
July 2003, in response to the MT Prestige oil spill in
November 2002, the European Union, or the EU, adopted a regulation that
accelerates the IMO single hull tanker phase-out timetable. Under that
regulation, no oil tanker is allowed to operate under the flag of a EU member
state, nor shall any oil tanker, irrespective of its flag, be allowed to enter
into ports or offshore terminals under the jurisdiction of a EU member state
after the anniversary of the date of delivery of the ship in the year specified
in the following table, unless that tanker is double hull:




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
              
              Category 2—oil tankers
      of 20,000 dwt and above carrying crude oil, fuel oil, heavy diesel oil orlubricating
      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, 1982 or earlier; or
              2005
      for ships delivered after April 5, 1982
              
              
              
              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







Furthermore,
under the regulation, all oil tankers of 5,000 dwt or less must comply with the
double hull requirements no later than the anniversary date of delivery of the
ship in the year 2008. The regulation, however, provides that oil tankers
operated exclusively in ports and inland navigation may be exempted from the
double hull requirement provided that they are duly certified under inland water
legislation.




The
EU, following the lead of certain EU nations such as Italy and Spain, has also
banned single hull tankers 5,000 dwt or above and single hull tankers 600 dwt
and above but less than 5,000 dwt from carrying HGO as of October 2003 and
as of the anniversary date of delivery in 2008, respectively, regardless of
flag, 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 EU
ports or offshore terminals and anchoring in areas under EU
jurisdiction.




We
plan to pursue all reasonably practicable measures to extend each of our
single-hull tanker's operating life for the maximum permissible time under
applicable regulations.




Other
Restrictions




The IMO has also negotiated
international conventions that impose liability for oil pollution in
international waters and a signatory's territorial waters. In
September 1997, the IMO adopted Annex VI to the MARPOL Convention, or Annex
VI, to address air pollution from ships. Annex VI was ratified in May 2004,
and became effective in May 2005. Annex VI sets limits on sulfur oxide and
nitrogen oxide emissions from ship exhausts and prohibits deliberate emissions
of ozone depleting substances, such as chlorofluorocarbons. 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.




In
February 2007, the United States proposed a series of amendments to Annex VI
regarding particulate matter, NOx and SOx emission standards. The proposed
emission program would reduce air pollution from ships by establishing a new
tier of performance-based standards for diesel engines on all vessels and
stringent emission requirements for ships that operate in coastal areas with
air-quality problems. On June 28, 2007, the World Shipping




23


Council
announced its support for these amendments. If these amendments are implemented,
we may incur costs to comply with the proposed standards.




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 adversely affect our business, cash flows, results of
operations and financial condition.




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




Under
the International Safety Management Code for the Safe Operation of Ships and for
Pollution Prevention, or the ISM Code, promulgated by the IMO in 1993, the party
with operational control of a vessel is required 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. In 1998, the ISM Code became mandatory by the adoption of Chapter
IX of SOLAS.




The
ISM Code requires that vessel operators obtain a safety management certificate
for each vessel they operate. This certificate evidences compliance by a
vessel's management with code requirements for a safety management system. No
vessel can obtain a certificate unless its operator 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.




Noncompliance
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. For example, the U.S. Coast Guard and European
Union authorities have indicated that vessels not in compliance with the ISM
Code will be prohibited from trading in U.S. and European Union
ports.




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 1992 Protocol
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 of over 140,000 gross
tons, liability will be limited to 89.77 million SDR.  The exchange
rate between SDRs and U.S. dollars was 0.611539 SDR per U.S. dollar on April 1,
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 thatare
parties to these conventions must provide evidence of insurance covering the
liability of the owner. In jurisdictions where 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 convention.  We believe
that our protection and indemnity insurance will cover the liability under the
plan adopted by the IMO.




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




24




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.




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.




25


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.




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




26


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. 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. We are not involved in any other
legal proceedings which may have, or have had, a significant effect on our
business, financial position, results of operations or liquidity, nor are we
aware of any legal proceedings that are pending or threatened which may have a
significant effect on our business, financial position, results of operations or
liquidity.




In
the fourth quarter of 2007, the Company 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.  WFS seeks both injunctive relief
and damages. 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.  A trial of the issues is
scheduled for July 2008.  The Company intends to contest WFS’s claims
vigorously, and will counterclaim for damages.  The Company does not
believe that the outcome of this action will have a material adverse effect on
the Company’s results of operations.




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 and Portland Bunkers International Limited,
separate wholly-owned subsidiaries incorporated in Gibraltar, Jamaica,
Singapore, Ghana, Belgium 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
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. 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.




We
own our vessels through separate wholly-owned subsidiaries listed in the
following table:




Vessel-owning Subsidiary
            Country of Incorporation
            Vessel Name or
              Hull NumberCarmel
      Investment Corp.
            Marshall
      Islands
            Aegean
      RoseEvian
      Enterprises Co.
            Marshall
      Islands
            Aegean
      DaisyClyde
      Shipping Corp.
            Marshall
      Islands
            Aegean
      TulipAegean
      Tiffany Shipping Pte. Ltd.
            Singapore
            Aegean
      TiffanyAegean
      Breeze Shipping Pte. Ltd.
            Singapore
            Aegean
      Breeze IAegean
      X Maritime Inc.
            Marshall
      Islands
            Aegean
      XAegean
      Marine Petroleum LLC(1)
            United
      Arab Emirates
            Aegean
      FlowerAegean
      VII Shipping Ltd.
            Malta
            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
      XI





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


27





Vessel-owning Subsidiary
            Country of Incorporation
            Vessel Name or
              Hull NumberMilos
      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
            LeaderBaldwin
      Management Co.
            Marshall
      Islands
            SaraAegean
      Tanking S.A.
            Liberia
            FosSerifos
      Maritime Inc.
            Marshall
      Islands
            SerifosKithnos
      Maritime Inc.
            Marshall
      Islands
            KithnosAmorgos
      Maritime Inc.
            Marshall
      Islands
            AmorgosKimolos
      Maritime Inc.
            Marshall
      Islands
            KimolosSyros
      Maritime Inc.
            Marshall
      Islands
            DN-3500-6Mykonos
      Maritime Inc.
            Marshall
      Islands
            DN-3500-7Santorini
      Maritime Inc.
            Marshall
      Islands
            DN-3500-8Paros
      Maritime Inc.
            Marshall
      Islands
            DN-3500-9Naxos
      Maritime Inc.
            Marshall
      Islands
            DN-3500-10Andros
      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
      217Eton
      Marine Ltd.
            Liberia
            QHS
      220Tasman
      Seaways Inc.
            Liberia
            QHS
      221Benmore
      Services S.A.
            Liberia
            QHS
      222Ingram
      Enterprises Co.
            Liberia
            QHS
      223Santon
      Limited
            Liberia
            QHS
      224Ocean
      Dynamic Corp.
            Marshall
      Islands
            N
      2230007Sea
      Global S.A.
            Marshall
      Islands
            N
      222000





28


D.           Property,
Plant and Equipment




Real
Property




The
following table presents certain information on our leased and owned properties
as of April 1, 2008.  We consider our properties to be suitable and
adequate for our present needs.




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
      2008Khor
      Fakkan, the United Arab Emirates
            Administrative
      and operations office
            Leased
            September
      2008Gibraltar
            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
      2008Nicosia,
      Cyprus
            Administrative
      office
            Leased
            May
      2010





Fleet




The
following table lists our fleet of owned vessels as of April 1,
2008:




Name
            Double Hull
            Flag
            Build
            DwtBunkering
      Tankers:Kimolos
            Yes
            Singapore
            2008
            4,600Kithnos
            Yes
            Liberia
            2007
            4,600Amorgos
            Yes
            Liberia
            2007
            4,627Serifos
            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
      Princess
            Yes
            Liberia
            1991
            7,030Sara
            Yes
            Malta
            1990
            7,389Aegean
      Rose
            Yes
            Gibraltar
            1988
            4,935Aegean
      Daisy
            Yes
            Gibraltar
            1988
            4,935Aegean
      X
            Yes
            Panama
            1982
            6,400Aegean
      Pride I
            Yes
            Liberia
            1982
            11,538


29





Name
            Double Hull
            Flag
            Build
            DwtBunkering
      Tankers:Aegean
      XI
            Yes
            Liberia
            1984
            11,050Aegean
      Force
            Yes
            Liberia
            1980
            6,679Hope
            Yes
            Liberia
            1980
            10,597Vera
            No
            Liberia
            1985
            3,720Aegean
      VII
            No
            Liberia
            1984
            3,892Aegean
      IX
            No
            Panama
            1976
            7,216(1)Panamax
      TankersOuranos
            Yes
            Liberia
            1983
            67,980Fos
            Yes
            Liberia
            1981
            67,980Aframax
      TankersLeader
            Yes
            Panama
            1985
            83,890(1)        Currently
      certified for use of 4,999 dwt.




We
position 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 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 use our double hull Panamax
product tankers as floating storage facilities and had deployed our double hull
Aframax tanker for hire in the international spot market before we positioned it
in Ghana for use as a floating storage facility.




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 26 remaining vessels to take delivery on between April 2008 and
December 2010. 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 26 newbuildings we have under contract,
we expect to have 44 double hull vessels in our operating fleet of bunkering
tankers by 2010.




The
following table presents certain information concerning 26 bunkering tankers
that we have contracted to build.




Hull Number
            Hull Type
            Expected Delivery
            Dwt
            ShipyardBunkering
      Tankers Under Contracts:DN-3500-6
            Double
      Hull
            Q2
      2008
            4,600
            FujianDN-3500-7
            Double
      Hull
            Q2
      2008
            4,600
            FujianDN-3500-8
            Double
      Hull
            Q2
      2008
            4,600
            FujianDN-3500-9
            Double
      Hull
            Q3
      2008
            4,600
            FujianDN-3500-10
            Double
      Hull
            Q3
      2008
            4,600
            FujianDN-3800-11
            Double
      Hull
            Q1
      2009
            4,600
            FujianDN-3800-12
            Double
      Hull
            Q2
      2009
            4,600
            FujianDN-3800-13
            Double
      Hull
            Q2
      2009
            4,600
            FujianDN-3800-14
            Double
      Hull
            Q3
      2009
            4,600
            FujianDN-3800-15
            Double
      Hull
            Q3
      2009
            4,600
            FujianQHS
      207
            Double
      Hull
            Q1
      2009
            5,500
            Hyundai


30





Hull Number
            Hull Type
            Expected Delivery
            Dwt
            ShipyardBunkering
      Tankers Under Contracts:QHS
      208
            Double
      Hull
            Q1
      2009
            5,500
            HyundaiQHS
      209
            Double
      Hull
            Q2
      2009
            5,500
            HyundaiQHS
      210
            Double
      Hull
            Q2
      2009
            5,500
            HyundaiQHS
      215
            Double
      Hull
            Q2
      2009
            5,500
            HyundaiQHS
      216
            Double
      Hull
            Q3
      2009
            5,500
            HyundaiQHS
      217
            Double
      Hull
            Q3
      2009
            5,500
            HyundaiQHS
      220
            Double
      Hull
            Q2
      2008
            5,500
            HyundaiQHS
      221
            Double
      Hull
            Q3
      2008
            5,500
            HyundaiQHS
      222
            Double
      Hull
            Q3
      2009
            5,500
            HyundaiQHS
      223
            Double
      Hull
            Q4
      2009
            5,500
            HyundaiQHS
      224
            Double
      Hull
            Q4
      2009
            5,500
            HyundaiQHS
      225
            Double
      Hull
            Q4
      2009
            5,500
            HyundaiQHS
      226
            Double
      Hull
            Q1
      2010
            5,500
            HyundaiQHS
      227
            Double
      Hull
            Q1
      2010
            5,500
            HyundaiQHS
      228
            Double
      Hull
            Q1
      2010
            5,500
            Hyundai




In
addition to expanding our fleet with bunkering tankers, we have entered into
newbuilding contracts for the construction of two specialty tankers and we have
options, which we plan to exercise, to build four additional specialty tankers.
We plan to 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 under the newbuilding contracts and the option to purchase, or to have
built, two specialty tankers exercisable on or before the launching of the first
of two specialty tankers and on the delivery date of the first of two specialty
tankers under contract for two additional specialty tankers.




Hull Number
            Hull Type
            Expected Delivery
            DwtSpecialty
      Tankers Under Contracts:N
      2220000
            Double
      Hull
            Q4
      2008
            2,400N
      2230007
            Double
      Hull
            Q2
      2008
            2,400Specialty
      Tankers Under Option:N/A
            Double
      Hull
            Q2
      2008
            2,400N/A
            Double
      Hull
            Q3
      2008
            2,400N/A
            Double
      Hull
            Q4
      2008
            2,400N/A
            Double
      Hull
            Q1
      2009
            2,400






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.




31


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 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 and the United Arab Emirates, utilizing our storage facility, 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.




·
            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. We calculate gross spread on marine petroleum
      products by subtracting from sales of marine petroleum products the cost
      of marine petroleum products sold and any 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




32


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 31,2003
            
            
            
            2004
            
            
            
            2005
            
            
            
            2006
            
            
            
            2007(in
      thousands of U.S. dollars, unless otherwise
  stated)Gross spread on marine petroleum
      products
            
            
            19,413
            
            
            
            24,997
            
            
            
            40,804
            
            
            
            62,020
            
            
            
            89,671Less: Sales of
      lubricants
            
            
            (1,500
            )
            
            
            (3,471
            )
            
            
            (3,824
            )
            
            
            (6,628
            )
            
            
            (7,313
            )Add: Cost of lubricants
      sold
            
            
            1,300
            
            
            
            3,097
            
            
            
            3,560
            
            
            
            6,173
            
            
            
            6,777Gross spread on marine
      fuel
            
            
            19,213
            
            
            
            24,623
            
            
            
            40,540
            
            
            
            61,565
            
            
            
            89,135Sales volume of marine fuel
      (metric tons)
            
            
            1,109,887
            
            
            
            1,169,430
            
            
            
            1,746,377
            
            
            
            2,367,289
            
            
            
            3,437,269Gross spread per metric ton of
      marine fuel sold (U.S. dollars)
            
            
            17.3
            
            
            
            21.1
            
            
            
            23.2
            
            
            
            26.0
            
            
            
            25.9





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 31,2003
            
            
            
            2004
            
            
            
            2005
            
            
            
            2006
            
            
            
            2007(in
      thousands of U.S. dollars)




Gross spread on marine petroleum
      products
            
            
            19,413
            
            
            
            24,997
            
            
            
            40,804
            
            
            
            62,020
            
            
            
            89,671Add: Voyage
      revenues
            
            
            8,100
            
            
            
            14,983
            
            
            
            10,450
            
            
            
            11,639
            
            
            
            5,758Add: Other
      revenues
            
            
            1,126
            
            
            
            593
            
            
            
            1,275
            
            
            
            1,516
            
            
            
            1,266Add: Gain on sale of
      vessel
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            2,693Less: Salaries, wages and related
      costs
            
            
            (3,581
            )
            
            
            (5,052
            )
            
            
            (8,958
            )
            
            
            (12,871
            )
            
            
            (24,363
            )Less: Vessel hire
      charges
            
            
            (3,390
            )
            
            
            (2,436
            )
            
            
            (518
            )
            
            
            -
            
            
            
            -Less:
      Depreciation
            
            
            (809
            )
            
            
            (1,546
            )
            
            
            (2,226
            )
            
            
            (4,240
            )
            
            
            (6,373
            )Less:
      Amortization
            
            
            (240
            )
            
            
            (386
            )
            
            
            (636
            )
            
            
            (1,684
            )
            
            
            (3,224
            )Less: Management
      fees
            
            
            (513
            )
            
            
            (183
            )
            
            
            (182
            )
            
            
            (223
            )
            
            
            (54
            )Less: Other operating
      expenses
            
            
            (9,043
            )
            
            
            (12,348
            )
            
            
            (16,629
            )
            
            
            (25,697
            )
            
            
            (39,042
            )Add: Cargo transportation
      costs
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            4,466Operating
      income
            
            
            11,063
            
            
            
            18,622
            
            
            
            23,380
            
            
            
            30,460
            
            
            
            30,798





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




33


is
important to investors because it is an effective intermediate performance
measure of the strength of our operations.




Gross
spread on marine petroleum products 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.




·
            Number of
      service centers. The number of service
      centers includes our physical supply operations in the United Arab
      Emirates, Gibraltar, Jamaica, Singapore and Northern Europe, as well as
      Greece, where we conduct operations through our related company, Aegean
      Oil. The number of service centers 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. We acquired our
      service center in Northern Europe on October 9,
  2007.




·
            Average
      number of operating bunkering tankers. Average number of
      operating bunkering tankers is the number of operating bunkering tankers
      in our fleet for the relevant period, as measured by the sum of the number
      of days each bunkering tanker 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 tankers at the end of the
      period. The average number of operating bunkering tankers 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
bunkering tankers for the
periods indicated.




Year
      Ended December 31,2005
            
            
            2006
            
            
            2007(in
      thousands of U.S. dollars, unless otherwise stated)Sales
      volume of marine fuel (metric tons)
            
            
            1,746,377
            
            
            
            2,367,289
            
            
            
            3,437,269Gross
      spread on marine petroleum products
            
            
            40,804
            
            
            
            62,020
            
            
            
            89,671Gross
      spread per metric ton of marine fuel sold (U.S. dollars)
            
            
            23.2
            
            
            
            26.0
            
            
            
            25.9Number
      of service centers, end of period
            
            
            4.0
            
            
            
            5.0
            
            
            
            6.0Average
      number of operating bunkering tankers
            
            
            9.0
            
            
            
            11.1
            
            
            
            13.5




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;




34


·
            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.




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 31,2005
              
              
              
              2006
              
              
              
              2007(in
      thousands of U.S. dollars)Greece
      (1)
              
              
              125,540
              
              
              
              167,061
              
              
              
              165,231Gibraltar
      (1)
              
              
              152,372
              
              
              
              240,412
              
              
              
              433,524United
      Arab Emirates (1)
              
              
              130,459
              
              
              
              180,453
              
              
              
              287,347Jamaica
      (1)
              
              
              77,385
              
              
              
              147,211
              
              
              
              212,093Singapore
      (1)(2)
              
              
              —
              
              
              
              39,496
              
              
              
              193,747Northern
      Europe (1)(3)
              
              
              —
              
              
              
              —
              
              
              
              37,443Other
      sales (4)
              
              
              19,849
              
              
              
              16,024
              
              
              
              16,464Total
              
              
              505,605
              
              
              
              790,657
              
              
              
              1,345,849




(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 acquired our
      service center in Northern Europe on October 9, 2007.(4)
              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, 2005,
2006 and 2007, 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 and
the United Arab Emirates, 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








35






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. Prior
to June 1, 2005, we also purchased marine petroleum products from Golden Sun
Marine Corp., our related company. For further discussion of our marine
petroleum products purchases from related companies, please refer to the section
of this report entitled "Major Shareholders and Related Party
Transactions."




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 31,2005
            
            
            
            2006
            
            
            
            2007(in
      thousands of U.S. dollars)


Third-party
      suppliers
              
              
              360,223
              
              
              
              573,615
              
              
              
              1,091,769Related
      company suppliers
              
              
              104,578
              
              
              
              155,022
              
              
              
              159,943Total
              
              
              464,801
              
              
              
              728,637
              
              
              
              1,251,712




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






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.






Voyage
revenues are also generated by tankers that we utilize in the spot market
pending their deployment as storage vessels or bunkering tankers. In addition,
we have entered into newbuilding contracts for the construction of two new
double hull petroleum products tankers with roll-on roll-off facilities and
refueling capabilities for fuel trucks, which we call specialty tankers, and we
have options to build four additional specialty tankers. We currently plan to
exercise these options. We currently intend to position these tankers in Greek
waters and we expect to deploy them primarily under contracts of affreightment
with operators of gasoline station networks in the Greek Islands, including
major oil producers, state-owned refineries and independent physical suppliers
of gasoline and relatedproducts. We expect that
voyage revenues will increase once the first specialty tanker is delivered to us
and placed into service.




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 are mainly 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.




36


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






Year
      Ended December 31,2005
            
            
            
            2006
            
            
            
            2007(in
      thousands of U.S. dollars)


Shipboard
      personnel
            
            
            5,962
            
            
            
            8,319
            
            
            
            11,509Shoreside
      personnel
            
            
            2,996
            
            
            
            4,552
            
            
            
            12,854Total
            
            
            8,958
            
            
            
            12,871
            
            
            
            24,363




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 tankers 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 voyage costs of our recently-sold
Aframax tanker, the Aegean Hellas, and the operating expenses of all our
bunkering tankers, 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 tanker 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 tankers 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 tanker, the Ouranos, Fos and Leader. 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, the 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




37




transactions
with unaffiliated third parties. For further discussion please refer to the
section of this report entitled “Major Shareholders and Related Party
Transactions—Related Party Transactions.”




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 (i) existing credit facilities to finance the construction of our
new bunkering tankers, (ii) existing credit facilities to finance the
construction of our new specialty tankers, and (iii) 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. Furthermore, if we decide to purchase other vessels or pursue other
projects in the future, we may consider strategic debt or equity financing
options at that time.




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 and Belgium.




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. We do not pay a material amount of tax in any
jurisdiction in which we operate.




Results
of Operations




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), $137.8




38


million 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, the
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 on theFos, 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.




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.




39


Year
ended December 31, 2006 compared to the year ended December 31,
2005




Sales of Marine
Petroleum Products.Sales of marine petroleum
products increased by $285.1 million, or 56.4%, to $790.7 million for the year
ended December 31, 2006, compared to $505.6 million for the year ended
December 31, 2005. Of the total increase in sales of marine petroleum
products, $205.6 million was attributable to an increase in sales volume of
marine fuel (using average prices for the year ended December 31, 2006),
$76.7 million was attributable to a 15.3% increase in the average price of
marine fuel (using sales volumes for the year ended December 31, 2005), and
$2.8 million was attributable to an increase in the sales of lubricants. Sales
volume of marine fuel increased by 620,912 metric tons, or 35.6%, to 2,367,289
metric tons for the year ended December 31, 2006, compared to 1,746,377
metric tons for the year ended December 31, 2005 due to additional volume
of sales of marine fuel in Greece, Gibraltar, the United Arab Emirates and
Jamaica and due to sales of marine fuel in our service center in Singapore,
which commenced physical supply operations on June 2, 2006. 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 $21.2 million, or 52.0%, to $62.0 million for
the year ended December 31, 2006, compared to $40.8 million for the year
ended December 31, 2005. The increase in our gross spread on marine
petroleum products mainly resulted from the increased sales volume of marine
fuel and from the increased gross spread per metric ton of marine fuel sold on
such volumes. Our gross spread per metric ton of marine fuel sold during the
year ended December 31, 2006 increased 12.1% to $26.0 from $23.2 during the
year ended December 31, 2005. The increase in our gross spread per metric
ton of marine fuel sold resulted from improved market conditions in our combined
port portfolio. Furthermore, the increase in our gross spread per metric ton of
marine fuel sold is also due to our increased sales volumes in locations where
we generally obtain higher margins such as our service centers in Jamaica and
Gibraltar. Finally, the increase of 12.1% in our gross spread per metric ton of
marine fuel sold was slightly lower than the increase of 15.3% 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 7.9% for the year ended December 31, 2005 to 7.7% for the
year ended December 31, 2006.  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.Voyagerevenues increased by $1.1 million, or
10.5%, to $11.6 million for the year ended December 31, 2006, compared to
$10.5 million for the year ended December 31, 2005. This increase was
mainly attributable to an increase in the average daily charter hire rates of
our Aframax tanker during 2006. Furthermore,the increase in voyage revenues was
constrained by off-hire time of approximately two months in 2006
whenour Aframax tanker was
drydocked.




Salaries, Wages and
Related Costs.Salaries, wages and related costs increased by
$3.9 million, or 43.3%, to $12.9 million for the year ended
December 31, 2006, compared to $9.0 million for the year ended
December 31, 2005. This increase is mainly due to increased crew costs. The
averagenumber of operating
bunkering tankers increased
by 23.3%, to 11.1 for the year ended December 31, 2006, compared to 9.0 for
the year ended December 31, 2005. Furthermore, increased crew costs
included salaries of our crew on the floating storage facility, Fos, which was
acquired during 2006, and salaries of our crew on the bunkering tanker, Aegean
Flower, which was not operational during the first quarter of 2005 due to an
engine breakdown. The increase in salaries, wages and related costs is also
attributable to additional salaried employees hired at our Greek office,
including sales and marketing and operations personnel to manage our expanded
network and accounting and finance staff employed in anticipation of our
reporting requirements as a public company.




Vessel Hire
Charges.We did not
incur any vessel hire charges during the year ended December 31, 2006 due to the
reduction of sales of marine petroleum products to the United States Navy.The reduction of sales to
the United States Navy was due to decreased naval activity in Greece in 2006.During the year ended
December 31, 2005, we incurred vessel hire charges of $0.5 million to service
the United States Navy vessels at Souda Bay in Crete, Greece, where we are
required to deliver marine petroleum products using Greek-owned vessels which we
do not own but hire from a related company.




40


Depreciation.Depreciationincreased by $2.0 million, or 90.9%, to
$4.2 million for the year ended December 31, 2006, compared to $2.2 million
for the year ended December 31, 2005. This increase exceeded the 23.3%
increase in the averagenumber of operating bunkering tankers due to the higher age and
acquisition costs of the three double hull bunkering tankers, Aegean Pride I,
Aegean XI and Aegean Force, acquired on December 20, 2005, May 3, 2006 and July
25, 2006, than the average age and acquisition costs of our then-existing
fleet.




Other Operating
Expenses.Other
operating expenses increased by $9.1 million, or 54.8%, to $25.7 million for the
year ended December 31, 2006, compared to $16.6 million for the year ended
December 31, 2005. Of the total increase in other operating expenses, $2.0
million 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. A
further $1.7 million of the total increase was attributable to an increase in
voyage and operating costs of our Aframax tanker.  Furthermore, $3.4
million of the total increase was due to our lease of shoreside storage space in
Gibraltar as well as to the operating costs of our floating storage facility,
the Fos, in Gibraltar. These costs were non-existent in 2005 because we were
purchasing marine fuel exclusively from FAMM under a long-term supply contract.
Finally, $2.0 million of the total increase was attributable to the increase in
other expenses, mainly general and administrative expenses of our Greek office
and service centers including costs relating to the establishment of our service
center in Singapore.




Write-off of
Deferred IPO Costs.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 our initial public offering. Accordingly, during
the year ended December 31, 2006, we wrote off $1.6 million, representing all
deferred costs incurred in connection with the offering.




Interest and Finance
Costs.Interest and finance costs increased by $2.9
million to $5.2 million for the year ended December 31, 2006, compared to
$2.3 million for the year ended December 31, 2005. The increase in interest
and finance costs was mainly attributable to an increase in our total debt
outstanding during 2006, mainly resulting from loan agreements signed during the
latter half of 2005 all the way up to the date of our initial public offering,
December 8, 2006.




Inflation




Inflation
has had only a moderate effect on our expenses given recent historical 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 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




41




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, 2007, we believe that we were in compliance in all
material respects with all covenants of our credit facilities.






Credit
Facilities




As of
December 31, 2006 and 2007, we had the following outstanding
loans:






Loan
            
            Date
            
            
            2006
            
            
            
            2007(in
      millions of U.S. dollars)Senior
      secured credit facility
            December
      20, 2007
            
            
            -
            
            
            
            133.0Secured
      syndicated term loan facility with respect to five
      newbuildings
            July
      5, 2007
            
            
            -
            
            
            
            3.1Secured
      syndicated term loan facility with respect to seven
      newbuildings
            October 30,
      2006
            
            
            7.0
            
            
            
            11.5Secured
      term loan facility with respect to two newbuildings
            October 27,
      2006
            
            
            1.5
            
            
            
            4.5Secured
      term loan facility with respect to three newbuildings
            October 25,
      2006
            
            
            2.3
            
            
            
            3.8Secured
      term loan facility under the 2006 senior secured credit facility with
      respect to five newbuildings
            December
      19, 2006
            
            
            -
            
            
            
            19.3Secured
      term loan facility with respect to five newbuildings
            February
      10, 2006
            
            
            4.2
            
            
            
            -Secured
      syndicated term loan facility with respect to two
    newbuildings
            October 26,
      2005
            
            
            13.5
            
            
            
            15.1Secured
      syndicated term loan facility with respect to
      five newbuildings
            August 30,
      2005
            
            
            5.0
            
            
            
            17.733.5
            
            
            
            208.0






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




Senior secured credit
facilities.    On December 20, 2007, AMP entered
into a syndicated overdraft, guarantee and letter of credit facility with
international commercial lenders, our senior secured credit facility, for
working capital and general corporate purposes. Our senior secured credit
facility replaced the guarantee and letter credit line portion of our 2006
senior secured credit facility discussed below. Our senior secured credit
facility is 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. Our senior secured
credit facility has a term of one year which is renewable. The borrowings
under the overdraft facility bear interest at a rate of LIBOR plus a margin of
1.25%.  Documentary and standby letters of credit are subject to
commissions of 0.25% and 0.625%, respectively.




Our
senior secured credit facility is secured by, among other things:




·
            a
      first priority mortgage on our ten of our double hull bunkering tankers
      and three floating storage facilities, or our mortgaged
      vessels;




·
            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;




42


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




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




Our
senior secured credit facility contains 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 32% 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.




Furthermore,
our senior secured credit facility contains 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.




On
December 19, 2006, we entered into our senior secured credit facility with
an international commercial lender, or the 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
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, 2006, we had no amounts outstanding under our 2006 senior
secured credit facility. As of December 31, 2007, we had $133.0 million
outstanding under our senior secured credit facility and $19.3 million
outstanding under our 2006 senior secured credit 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. The loan bears interest at the rate of
LIBOR plus 0.90% before delivery of each vessel and at LIBOR plus 0.85% after
such vessel's delivery.  Under the terms of




43


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.




The
facility is available in five tranches of $7.5 million each. Each tranche
is repayable in 40 consecutive quarterly installments in the amount of $187,000
each. 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, the outstanding balance of the loan was $3.1 million.




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.




44


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, 2006 and December 31, 2007, the
balance on the loan was $7.0 million and $11.5 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;




·
            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, 2006 and December 31, 2007, the balance on the loan was
$1.5 million and 4.5 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;




45


·
            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, 2006 and December 31, 2007, the balance on the loan was
$2.3 million and $3.8 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;




·
            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, 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.




46


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.




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, 2006 and December 31, 2007, the
balance on the loan was $13.5 million (Euro 10.25 million) and
$15.1 million (Euro 10.25 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, 2006 and December 31, 2007, the balance on this letter of
credit facility was $12.3 million and $10.2 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




47


·
            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, 2006 and December 31, 2007, the
balance on the loan was $5.0 million and $17.7 million,
respectively.




Liquidity
and Uses of Cash




Cash
and cash equivalents, as of December 31, 2006 and 2007 amounted to $82.4
million and $2.0 million, respectively. The table below illustrates our
working capital and working capital excluding cash and debt as of
December 31, 2006 and 2007. 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.




Year
      Ended December 31,2006
            
            
            2007(in
      thousands of U.S. dollars)Working
      capital
            
            
            115,723
            
            
            
            63,529Working
      capital excluding cash and debt
            
            
            33,381
            
            
            
            190,212




During
the year ended December 31, 2007, the significant increase in our sales of
marine petroleum products coupled with a decline in the average outstanding days
of our trade payables propelled our working capital excluding cash and debt
position to $190.2 million as of December 31, 2007, as compared to $33.4 million
as of December 31, 2006. At the same time, our working capital position as of
December 31, 2007 declined to $63.5 million from $115.7 million a year ago, as a
direct result of financing our increased working capital requirements with
short-term bank debt. While we do expect to incur additional debt to fund
working capital requirements and capital commitments, we would not expect
significant working capital deficits in the future.




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 had been extended unsecured trade credit,




48


we
are usually extended secured trade credit from our suppliers for our marine
petroleum product purchases and our suppliers usually require us to provide 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, 2005, 2006 and 2007.




Year
      Ended December 31,2005
            
            
            
            2006
            
            
            
            2007(in
      thousands of U.S. dollars)Payments
      for net vessel acquisitions
            
            
            8,175
            
            
            
            21,995
            
            
            
            66,217Payments
      for vessel construction
            
            
            11,228
            
            
            
            35,396
            
            
            
            55,529Payments
      for drydocking
            
            
            154
            
            
            
            10,637
            
            
            
            3,186




Payments for vessel acquisitions will
increase in the coming years due to our existing commitments on our newbuilding
contracts. As of December 31, 2007, six of the 23 bunkering tankers on order
have a total construction cost of $8.4 million each, seven have a total
construction cost of $11.6 million each, five have a total construction cost of
$11.0 million each, and the remaining five have a construction cost of $7.9
million Except for the last five mentioned above (whose supervision contracts
have not been signed yet), these costs include newbuilding contracts with the
shipyards as well as supervision contracts. Each of the two specialty tankers
has an estimated total construction cost of Euro 8.3 million, which includes a
newbuilding contract with the shipyard as well as a supervision contract. The
construction costs of both the bunkering tankers and the specialty tankers are
payable in milestones over the duration of the construction of these vessels.
The payment schedules for these newbuilding contracts are presented below. The
payment schedules for the specialty tankers have been calculated assuming a
$/Euro exchange rate of 1.4721, the rate prevailing on December 31, 2007.






Bunkering
              Tanker
            
            
            
            Specialty
              Tankers
            
            
            
            Total(in
      thousands of U.S. dollars)2008
            
            
            105,418
            
            
            
            12,932
            
            
            
            118,3502009
            
            
            67,529
            
            
            
            —
            
            
            
            67,529Total
            
            
            172,947
            
            
            
            12,932
            
            
            
            185,879




Furthermore, payments for vessel
acquisitions are expected to increase if we exercise our options to purchase
four specialty tankers. 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. Furthermore, we intend to use cash flow from operations as
well as new long-term debt to fund the purchase of vessels under newbuilding
contracts if we exercise our options to purchase nine bunkering tankers and four
specialty tankers. 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




49






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 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. Net income, as adjusted for
non-cash items, was $37.6 million for the year ended December 31, 2007.
However the net positive change in working capital accounts utilized
$162.5 million in cash during that period, and we made drydocking payments
of $3.2 million during the period. 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.




Net cash provided by operating
activities increased by $15.6 million to $17.1 million for the year
ended December 31, 2006 compared to $1.5 million for 2005. This
increase was primarily attributable to our net income for theyearas changes in working capital were not
substantial.Working capital excluding cash and debt
increased by $2.9million, to a surplus of $33.4 million
as of December 31, 2006 compared to a surplus of $30.5million as of December 31,
2005.  The change in trade receivables was minimal as increased sales
of marine petroleum products were offset by a decrease in the average
outstanding days of trade receivables. The growth in trade payables provided
cash to operations and resulted from increased purchases during the year. On the
other hand, cash from operations was utilized to increase our inventories in
Gibraltar.




Net
Cash Used In Investing Activities




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 second hand 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 used in investing activities
was $55.2 million for the year ended December 31, 2006. During the year
ended December 31, 2006, we paid $35.4 million as milestone payments under
our newbuilding and engineering contracts.  We paid $34.9 million
to acquire the tankers, Aegean XI, Omega Af Donso, Trapper and Aegean Force and
we received $12.9 million upon the sale of the Omega Af Donso and the Trapper to
companies owned and controlled by members of Mr. Melisanidis’ family and related
to Aegean Shipping Management S.A. Net
cash used in investing activities was $35.0 million for the year ended
December 31, 2005. During the year ended December 31, 2005, we paid
$11.2 million as partial advance payments under our newbuilding contracts with
Fujian and a Romanian shipyard for ten double hull tankers and two specialty
tankers. We paid $6.7 million to acquire the bunkering tanker, Aegean Pride
I, from Bonaire Shipholding Co., a vessel-owning company owned and controlled by
members of Mr. Melisanidis' family and related to Aegean Shipping
Management; and we purchased other fixed assets of $1.1 million, including
$0.8 million for the acquisition of our marketing office in the United
States. Furthermore, during the year ended December 31, 2005, we placed a
portion of our loan proceeds in an interest-bearing cash collateral account
which we used as security for standby letters of credit issued by the same bank
to the above-mentioned Romanian shipyard.




50


Net
Cash Provided by Financing Activities




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.




Net cash provided by financing
activities was $112.9 million for the year ended December 31, 2006.
Regarding sources of financing, during the year ended December 31, 2006, we
obtained new long-term bank loans of $41.7 million and we received net proceeds
of $185.2 million from our initial public offering. Furthermore, during the year
ended December 31, 2006, we made principal repayments of $42.9 million on
our long-term bank loans and we repaid a net amount of $66.6 million under our
short-term credit facilities. Finally, during the year ended December 31,
2006, we declared and paid dividends of $4.0 million to our
shareholders.




Net
cash provided by financing activities was $37.8 million for the year ended
December 31, 2005. During the year ended December 31, 2005, we
obtained new long-term bank loans of $15.5 million and we made principal
repayments of $3.6 million on our existing long-term bank loans. Furthermore,
during the year ended December 31, 2005, we obtained a short-term loan
facility from Leveret totaling $23.6 million, and we borrowed
$39.0 million under short-term bank facilities, of which a short-term loan
of $35.0 million was used to finance the repurchase of 8% of our common
stock. Finally, during the year ended December 31, 2005, we declared and
paid dividends of $1.5 million to our shareholders.




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




Not
applicable.




D.         
   Trend information.




Not
applicable.




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, 2007:




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)
            
            3.6
            
            
            
            10.8
            
            
            10.8
            
            
            49.8
            
            
            
            75.0Interest
      on long-term bank debt (1)
            
            4.5
            
            
            
            12.1
            
            
            9.4
            
            
            7.6
            
            
            
            33.6Minimum
      purchase commitments (2)
            
            64.6
            
            
            
            129.1
            
            
            129.1
            
            
            145.3
            
            
            
            468.1Newbuilding
      contracts—bunkering tankers
            
            105.4
            
            
            
            67.5
            
            
            -
            
            
            -
            
            
            
            172.9Newbuilding
      contracts—specialty tankers
            
            13.0
            
            
            
            -
            
            
            -
            
            
            -
            
            
            
            13.0Total
            
            191.1
            
            
            
            219.5
            
            
            149.3
            
            
            202.7
            
            
            
            762.6





_______________


(1)
            Our long-term bank debt
      outstanding as of December 31, 2007 bears variable interest at margin over
      LIBOR. The calculation of variable rate interest payments is based on an
      actual weighted average rate of 6.06% for the year ended December 31,
      2007, 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




51


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, 2007.




Critical
      Accounting Policies


The
discussion and analysis of our financial condition and results of operations is
based upon our combined and 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 combined and
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 (i.e., 30 to 60 days, 60
to 90 days, etc.). 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-base
basis. Trade receivables are written off when it becomes apparent based upon age
or customer circumstances that such amounts will not be collected.




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 and for our Aframax tanker, to be
25 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




52




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, 2007 by $1.5 million.




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.




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.




Average
      Number of Tankers
            
            Drydock
      costsYear
      Ended December 31,
            
            Bunkering
            
            Non-bunkering
            
            As
      Reported
            
            As
      Incurred(in
      thousands of U.S. dollars)2005
            
            9.0
            
            1.0
            
            636
            
            1542006
            
            11.1
            
            1.3
            
            1,684
            
            10,6372007
            
            13.5
            
            1.7
            
            3,172
            
            3,186




The
table above discloses the average number of tankers 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




53




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 MANAGEMENT AND 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
              47
              Chairman
      of the Board, Class B DirectorSpyridon
      Fokas
              53
              Class
      B Director, General Counsel and Corporate SecretaryE. Nikolas
      Tavlarios
              45
              PresidentJohn
      O. Hatab
              64
              Class
      A DirectorYiannis
      N. Papanicolaou
              56
              Class
      A DirectorAbel
      L. Rasterhoff
              67
              Class
      C DirectorJohn
      P. Tavlarios
              46
              Class
      B DirectorDimitris
      Melisanidis
              57
              Head
      of Corporate DevelopmentZiad
      Nakhleh
              35
              Treasurer
      and Chief Financial OfficerGregory
      Robolakis
              49
              General
      Manager, Aegean Marine Petroleum S.A.Nikolas
      Hondos
              54
              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 2008.
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.




54


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.




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.




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 has overseen 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 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.




John O. Hatab has served as a
member of our board of directors and as the chairman of the audit committee
since December 2006. Mr. Hatab has also served as a member of the compensation
committee since February 2007.  He is a Principal of Gotham Capital
Associates LLC. From 2001 to 2004, Mr. Hatab was Managing Partner of
Business Development of the PricewaterhouseCoopers LLP Metro Region. From 1990
to 2001, Mr. Hatab was CEO of the PricewaterhouseCoopers LLP Metro Region
tax services practice and served as Managing Partner of the firm's New York
office tax practice. He previously served as Managing Partner of the Price
Waterhouse LLP Washington, DC area tax services practices. Mr. Hatab serves
as a director of General Maritime. Mr. Hatab also serves as a director of
Papa John's International, Inc., an operator and franchisor of restaurants,
which is also a publicly traded company with securities registered under the
Securities Act of 1934. Mr. Hatab is a Certified Public Accountant and
holds a bachelor's degree in business administration from Lehigh University and
a master's degree in business administration from the Seton Hall University
Graduate School of Business.




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.




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, a member of the board of directors of Capital
Maritime & Trading Corp., 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




55


Sea.
Mr. Rasterhoff holds a graduate business degree in business economics from
the University of Groningen in the Netherlands.




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.




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.




Ziad Nakhleh has been our
Treasurer and Chief Financial Officer since January 2005 and served as a
member of our board of directors from June 2005 to December
2006.  Prior to joining us, Mr. Nakhleh worked as an external
audit manager at Ernst & Young from October 2002 to
December 2004. From January 2000 to September 2002,
Mr. Nakhleh was employed at Arthur Andersen as an audit manager. Prior to
that, Mr. Nakhleh worked as a financial officer at a private international
company. Mr. Nakhleh is a member of the American Institute of Certified
Public Accountants and holds a bachelor's degree in Accounting from the
University of Richmond.




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




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




56


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.




B.        
    Compensation




The
aggregate annual compensation paid to our executive officers was $1.6 million
for the year ended December 31, 2007. Furthermore, we paid$0.3
millionto our non-executive
directors during the year ended December 31, 2007. 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. Hatab, Rasterhoff and Papanicolaou. Mr. Hatab
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,
Hatab 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




57


Messrs. Rasterhoff
and Hatab. Mr. Rasterhoff serves as the chairman of the nominating and
corporate governance committee.




Exemptions
from NYSE corporate governance rules




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 fact, 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.




D.     
       Employees




As
of December 31, 2007, we had approximately 530 employees, including
approximately 144 shoreside personnel, and approximately 386 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.




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, 2007, we granted an aggregate of 255,910restricted shares
pursuant to the Plan to certain of our employees, executive officers and
directors.




58




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 April 1, 2008.




Name
            Number
            
            PercentageLeveret
      International Inc. (1)
            15,088,031
            
            35.3%Peter
      C. Georgiopoulos
            4,205,250
            
            9.9%Trafelet
      Capital Management, L.P. (2)
            3,781,100
            
            8.9%John
      P. Tavlarios (3)
            1,119,444
            
            2.6%Other
      directors and executive officers as a group
            *
            
            *


_________________


*
            Less
      than 1%




(1)
            Leveret
      International Inc. is 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)
            John P. Tavlarios owns 1,119,444
      shares with his wife as joint
tenants.




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




As
of April 1, 2008, there were 10 record holders in the United States holding
approximately 64.3% 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 select 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.




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




59


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 select Greek refineries plus a margin which
was reviewed and negotiated monthly. During the years ended December 31,
2005, 2006 and 2007  we purchased marine petroleum products from
Aegean Oil in the amount of $99.4 million, $155.0 million and $159.9
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.




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, 2005, 2006 and 2007 amounted to
$0.2 million, $0.2 million and $0.1 million, respectively.




Charter of
Vessels.     We charter certain vessels from Aegean
Shipping in order to satisfy increased levels of demand for our services at a
time when our own vessels are operating at full capacity, or for special
situations such as service of U.S. naval vessels in Greece. Vessel hire charges
paid to Aegean Shipping for the year ended December 31, 2005 amounted to
$0.5 million. We did not incur any vessel hire charges for the years ended
December 31, 2006 and 2007.




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, 2005, 2006 and 2007 amounted to
$8.2 million, $13.1 million and $13.5 million,
respectively.




Purchases and Sales of Secondhand
Bunkering Tankers.    On December 20, 2005, we
purchased a secondhand double hull bunkering tanker with a cargo-carrying
capacity of 11,538 dwt, Aegean Pride I, from Aegean Shipping for the price of
$6.7 million which was paid in full. The price included Aegean Shipping's
initial purchase price of the vessel from an unrelated third party plus
additional costs incurred by Aegean Shipping to convert the vessel into a
bunkering tanker.




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, the 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.




Golden
Sun Marine Corp.




Prior
to June 1, 2005, we conducted business with Golden Sun Marine Corp., or
Golden Sun, a related company owned in part and controlled by
Mr. Melisanidis. Golden Sun, acting as a trader, sold marine petroleum
products to us, which for the year ended December 31, 2005 amounted to
$5.2 million. Effective June 1, 2005, we ceased purchasing marine
petroleum products from Golden Sun.




Leveret
International Inc. and AMPNInvest LLC




Short Term Financing
Agreements.    We have entered into 14 short-term
financing agreements with Leveret dated July 25, 2006, March 23, 2006,
March 13, 2006, February 10, 2006, December 19, 2005,
December 13, 2005,




60


December 12,
2005, November 28, 2005, November 25, 2005, October 10, 2005,
October 7, 2005, July 1, 2005, June 10, 2005 and June 6,
2005 for $5.0 million, $4.7 million, $0.43 million,
$0.67 million, $6.7 million, $0.8 million, $1.7 million,
$0.26 million, $4.1 million, $2.4 million, $0.6 million,
$4.0 million, $0.8 million and $5.9 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.




Stock Purchase
Agreements.    On October 3, 2005, we entered
into a stock purchase agreement with Leveret for the acquisition from Leveret of
80 shares of our common stock, constituting 8% of our then-issued and
outstanding capital stock, representing the beneficial interest of the siblings
of Mr.  Melisanidis, and enabling Leveret to repurchase 8% of Leveret's
issued and outstanding capital stock from Grady Properties Corp., a company
owned by the siblings of Mr. Melisanidis. We paid Leveret $35.0 million in
consideration for the 80 shares of our common stock.




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, President, Chief Executive Officer
of General Maritime, Mr. Tavlarios, our director and shareholder, is a
member of the board of directors of General Maritime and Mr. Hatab, 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 and 2007 amounted to $1.7 million and $1.2 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, 2008.  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.




C.      
      Interests of experts and
counsel.




Not
applicable.




61


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 2007 for the fourth quarter of 2006 and the first, second and third
quarters of 2007, 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
$150.0 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.




B.     
       Significant Changes.




Not
applicable.






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:




For the
    Period
            
            Low
            
            
            HighDecember 8 to December 31,
      2006
            
            $
            14.53
            
            
            $
            17.44Year endedDecember 31,
      2007
            
            $
            13.70
            
            
            $
            48.63First Quarter2007
            
            $
            13.70
            
            
            $
            17.70Second Quarter2007
            
            $
            14.97
            
            
            $
            19.89Third Quarter2007
            
            $
            17.96
            
            
            $
            37.00Fourth Quarter2007
            
            $
            32.87
            
            
            $
            48.63First Quarter
      2008
            
            $
            22.23
            
            
            $
            40.18October
2007
            
            $
            33.75
            
            
            $
            48.63November
    2007
            
            $
            32.87
            
            
            $
            43.98December
    2007
            
            $
            34.45
            
            
            $
            43.90January
2008
            
            $
            22.23
            
            
            $
            40.18February
    2008
            
            $
            27.08
            
            
            $
            35.81March
      2008
            
            $
            27.00
            
            
            $
            36.00


62






B.            
Plan of Distribution




Not
applicable




C.  
          Markets.




Shares
of our common stock are trading on the New York Stock Exchange on 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.




C.        
    Material contracts.




As
of December 31, 2007, 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




63


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.




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.






64




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, 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.




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
recently 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,






65




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," 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.




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.




66







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




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 and the UAE, we
own floating storage facilities and we currently import and store cargos of
marine fuel prior to resale to customers. Accordingly, in Gibraltar and 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, such as Ghana and the United Kingdom 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, 2007, we paid interest on
this debt based on LIBOR plus an average spread of 1.21% on our bank loans. A one percent increase in LIBOR
would have increased our interest expense for the year ended December 31, 2007
from $4.0 million to $5.0 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


67




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, 2007, comprised approximately 96% 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 combined and consolidated statements of
income has been minimal.




In
2005, we signed two newbuilding contracts for the construction of two specialty
tankers. These contracts are denominated in Euros. Apart from these
Euro-denominated contracts, we do not expect the impact of foreign exchange
fluctuations on our combined and consolidated statements of income to materially
differ from recent periods. 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 combined and consolidated statements
of income may be significant.




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, 2007.  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




68


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.




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 2007. Based upon that evaluation,ourPresidentandChiefFinancial Officer concluded that the
Company’s internal controls over financial reporting are effective as of
December 31 2007.




The effectiveness of the Company’s
internal control over financial reporting as of December 31 2007 has 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 under Item 18, 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, 2007 are Messrs. Hatab, Rasterhoff and
Papanicolaou.  Mr. Hatab has been determined to be a financial expert
by our board of directors and independent, as that term is defined in the
listing standards.




69







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, 2005, 2006 and 2007 were
Deloitte Hadjipavlou Sofianos & Cambanis S.A.  The aggregate
audit fees billed to us for the years ended December 31, 2005, 2006 and 2007
were $0.4 million, $0.3 million, and $0.6 million,
respectively.  There were no audit-related, tax or other fees billed
to us during 2005, 2006 and 2007.




ITEM
      16D.
            EXEMPTIONS
      FROM LISTING STANDARDS FOR AUDIT
COMMITTEES




None.




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




None.




PART
III




ITEM
      17.
            FINANCIAL
      STATEMENTS




See
Item 18.




ITEM
      18.
            FINANCIAL
      STATEMENTS




The following 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
            Description




1.1
            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*


70





Exhibit
      Number
              Description


4.2
            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
            Option
      Agreement, dated March 31, 2005, by and between Aegean Bunkering Services
      Inc. and Fujian Southeast Shipyard, as amended*4.6
            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.*4.7
            Option
      Agreement, dated June 3, 2005, by and between Aegean Bunkering Services
      Inc. and Severnav S.A.*4.8
            Marine
      Fuel Supply Service Agreement, dated April 1, 2005, by and between Aegean
      Marine Petroleum S.A. and Aegean Oil S.A.*4.9
            Form
      of License Agreement by and between Aegean Oil S.A. and Aegean Marine
      Petroleum Network Inc.*4.10
            Amendment
      Agreement, dated September 19, 2006, by and between Aegean Marine
      Petroleum S.A., as Borrower, and The Royal Bank of Scotland plc, as
      Lender*4.11
            Short
      Term Financing Agreement, dated June 6, 2005, by and among Leveret
      International Inc., as Lender, and certain borrowers listed therein, as
      amended*4.12
            Short
      Term Financing Agreement, dated June 10, 2005, by and among Leveret
      International Inc., as Lender, and Aegean Investments S.A., as Borrower,
      as amended*4.13
            Short
      Term Financing Agreement, dated July 1, 2005, by and among Leveret
      International Inc., as Lender, and Aegean Marine Petroleum S.A., as
      Borrower*4.14
            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*4.15
            Credit
      Facility dated October 3, 2005 by and between Royal Bank of Scotland plc,
      as Lender, and Aegean Marine Petroleum Network Inc., as
      Borrower*4.16
            Short
      Term Financing Agreement, dated October 7, 2005, by and among Leveret
      International Inc., as Lender, and Baltic Navigation Company, as
      Borrower*4.17
            Short
      Term Financing Agreement, dated October 10, 2005, by and among Leveret
      International Inc., as Lender, and Milos Maritime Inc. and Serifos
      Maritime Inc., as Borrowers*4.18
            Form
      of shipbuilding contract for construction of one 5,500 dwt product oil
      tanker with Qingdao Hyundai Shipbuilding Co. Ltd., as
    amended*




4.19
              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*


71


Exhibit
      Number
              Description


4.20
            Option
      Agreement, dated January 13, 2006, by and between Aegean Bunkering
      Services Inc. and Qingdao Hyundai Shipbuilding Co. Ltd., as
      amended*4.21
            Short
      Term Financing Agreement, dated December 25, 2005, by and among Leveret
      International Inc., as Lender, and certain borrowers listed therein, as
      amended*4.22
            Short
      Term Financing Agreement, dated December 12, 2005, by and among Leveret
      International Inc., as Lender, and certain borrowers listed therein, as
      amended*4.23
            Short
      Term Financing Agreement, dated December 13, 2005, by and between Leveret
      International Inc., as Lender, and  Mare Vision S.A., as
      Borrower*4.24
            Short
      Term Financing Agreement, dated December 19, 2005, by and between Leveret
      International Inc., as Lender, and Carnaby Navigation Inc., as
      Borrower*4.25
            Short
      Term Financing Agreement, dated February 10, 2006, by and among Leveret
      International Inc., as Lender, and Baltic Navigation Company, as
      Borrower*4.26
            Short
      Term Financing Agreement, dated March 23, 2006, by and between Leveret
      International Inc., as Lender, and Aegean Bunkering Services Inc., as
      Borrower *4.27
            Short
      Term Financing Agreement, dated July 25, 2006, by and between Leveret
      International Inc., as Lender, and Aegean Marine Petroleum S.A., as
      Borrower*4.28
            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*4.29
            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*4.30
            Framework
      Agreement, dated July 19, 2006, by and between Leveret International Inc.
      and AMPNInvest LLC, as amended*4.31
            Form
      of shipbuilding contract for construction of one 5,500 dwt product oil
      tanker with Qingdao Hyundai Shipbuilding Co. Ltd.*4.32
            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*4.33
            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*4.34
            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*





4.35
            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***




72


Exhibit
      Number
              Description


4.36
            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***4.37
            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***4.38
            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***4.39
            Form
      of shipbuilding contract for construction of one 3,800 dwt product
      oil tanker with Fujian Southeast Shipyard, as
amended***4.40
            Loan
      Agreement, dated December 20, 2007, by and among The Royal Bank of
      Scotland Plc, as Lender, and Aegean Marine Petroleum S.A., as
      Borrower8.1
            List
      of Subsidiaries11.1
            Code
      of Ethics****12.1
            Rule
      13a-14(a)/15d-14(a) Certification of Chief Executive
    Officer12.2
            Rule
      13a-14(a)/15d-14(a) Certification of Chief Financial
    Officer13.1
            Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section
    135013.2
            Certification
      of Chief 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 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 11.1 to the Company’s Annual Report on
      Form 20-F filed on May 25,
2007.








73


AEGEAN
MARINE PETROLEUM NETWORK INC.




INDEX
TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS







PageReport
      of Independent Registered Public Accounting Firm
            
            F-2Report
      of Independent Registered Public Accounting Firm on Internal Control over
      Financial Reporting
            
            F-3Consolidated
      Balance Sheets as of December 31, 2006 and 2007
            
            F-5Combined
      and Consolidated Statements of Income
              for
      the years ended December 31, 2005, 2006 and 2007
            
            F-6Combined
      and Consolidated Statements of Stockholders’ Equity
              for
      the years ended December 31, 2005, 2006 and 2007
            
            F-7Combined
      and Consolidated Statements of Cash Flows
              for
      the years ended December 31, 2005, 2006 and 2007
            
            F-8Notes
      to Combined and Consolidated Financial Statements
            
            F-9





F-1








REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





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





We
have audited the accompanying consolidated balance sheets of Aegean Marine
Petroleum Network Inc. and subsidiaries (the "Company") as of December 31, 2007
and 2006, and the related combined and consolidated statements of income,
stockholders' equity, and cash flows for each of the three years in the period
ended December 31, 2007.  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 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
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 combined and consolidated financial statements present fairly,
in all material respects, the financial position of Aegean Marine Petroleum
Network Inc. and subsidiaries as of December 31, 2007 and 2006, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 2007, 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, 2007, 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 7, 2008 expressed an unqualified
opinion on the Company's internal control over financial reporting.





/s/
Deloitte.,


Hadjipavlou,
Sofianos & Cambanis S.A.


Athens,
Greece


April
7, 2008









F-2


REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER
FINANCIAL REPORTING





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





We
have audited the internal control over financial reporting of Aegean Marine
Petroleum Network Inc. and subsidiaries (the "Company") as of December 31, 2007,
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 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, 2007, based on the
criteria established in Internal Control — Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission.


F-3


We
have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated balance sheets as
of December 31, 2007 and 2006, and the related combined and consolidated
statements of income, stockholders' equity, and cash flows for each of the three
years in the period ended December 31, 2007 and our report dated April 7, 2008
expressed an unqualified opinion on those financial statements.





/s/
Deloitte.,


Hadjipavlou,
Sofianos & Cambanis S.A.


Athens,
Greece


April
7, 2008





F-4




AEGEAN
MARINE PETROLEUM NETWORK INC.


CONSOLIDATED
BALANCE SHEETS




AS
OF DECEMBER 31, 2006 AND 2007




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




December
      31,2006
            
            
            2007ASSETSCURRENT
    ASSETS:Cash and cash
      equivalents
            
            $
            82,425
            
            
            $
            1,967Trade receivables, net of
      allowance for doubtful accounts
              of $1,106 and$1,603, as of December 31, 2006 and
      2007, respectively
            
            
            66,803
            
            
            
            191,654Due from related companies (Note
      4)
            
            
            469
            
            
            
            3,686Inventories (Note
      5)
            
            
            30,634
            
            
            
            97,140Prepayments and other current
      assets (Note 10)
            
            
            2,661
            
            
            
            12,417Restricted cash (Note
      2)
            
            
            750
            
            
            
            8,000Total current
      assets
            
            
            183,742
            
            
            
            314,864FIXED
    ASSETS:Advances for vessels under
      construction and acquisitions (Note 6)
            
            
            46,779
            
            
            
            84,378Vessels, cost (Notes 7, 12 and
      21)
            
            
            70,943
            
            
            
            149,866Vessels, accumulated depreciation
      (Notes 7, 12 and 21)
            
            
            (9,662
            )
            
            
            (14,312
            )Vessels’ net book
      value
            
            
            61,281
            
            
            
            135,554Other fixed assets, net (Notes 8
      and 21)
            
            
            1,206
            
            
            
            1,431Total fixed
      assets
            
            
            109,266
            
            
            
            221,363OTHER NON-CURRENT
      ASSETS:Restricted cash (Notes 2 and
      12)
            
            
            12,336
            
            
            
            10,171Deferred charges, net (Note
      9)
            
            
            10,519
            
            
            
            8,869ConcessionAgreement (Note
      3)
            
            
            -
            
            
            
            7,720Goodwill (Note
      3)
            
            
            -
            
            
            
            3,943Other non-current
      assets
            
            
            14
            
            
            
            27Total
assets
            
            $
            315,877
            
            
            $
            566,957LIABILITIES
      AND STOCKHOLDERS’ EQUITYCURRENT
      LIABILITIES:Short-term borrowings (Note
      11)
            
            
            -
            
            
            
            133,000Current portion of long-term debt
      (Note 12)
            
            
            833
            
            
            
            3,650Trade payables to third
      parties
            
            
            42,872
            
            
            
            77,862Trade payables to related
      companies (Note 4)
            
            
            19,203
            
            
            
            27,193Other payables to related
      companies
            
            
            125
            
            
            
            160Accrued and other current
      liabilities (Note 12)
            
            
            4,986
            
            
            
            9,470Total current
      liabilities
            
            
            68,019
            
            
            
            251,335LONG-TERM DEBT, net of current
      portion (Note 12)
            
            
            32,663
            
            
            
            71,381OTHER NON-CURRENT
      LIABILITIES
            
            
            196
            
            
            
            516COMMITMENTS 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, 2006 and 2007;
      42,410,000 and 42,461,428 shares, issued and outstanding at December 31,
      2006 and 2007, respectively (Note 18)
            
            
            424
            
            
            
            425Additional paid-in capital (Note
      18)
            
            
            185,103
            
            
            
            187,795Retained
      earnings
            
            
            29,472
            
            
            
            55,505Total stockholders’
      equity
            
            
            214,999
            
            
            
            243,725Total liabilities and
      stockholders’ equity
            
            $
            315,877
            
            
            $
            566,957




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


F-5


AEGEAN
MARINE PETROLEUM NETWORK INC.


COMBINED
AND CONSOLIDATED STATEMENTS OF INCOME


FOR
THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007




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




For
      the Year Ended December 31,2005
            
            
            2006
            
            
            2007REVENUES:Sales of marine petroleum products
      – third parties (Note 21)
            
            $
            497,443
            
            
            $
            775,816
            
            
            $
            1,331,144Sales of marine petroleum products
      – related companies (Notes 4 and 21)
            
            
            8,162
            
            
            
            14,841
            
            
            
            14,705Voyage
    revenues
            
            
            10,450
            
            
            
            11,639
            
            
            
            5,758Other
    revenues
            
            
            1,275
            
            
            
            1,516
            
            
            
            1,266Total
    revenues
            
            
            517,330
            
            
            
            803,812
            
            
            
            1,352,873OPERATING
      EXPENSES:Cost of marine petroleum products
      sold – third parties
            
            
            360,223
            
            
            
            573,615
            
            
            
            1,091,769Cost of marine petroleum products
      sold – related companies (Note 4)
            
            
            104,578
            
            
            
            155,022
            
            
            
            159,943Salaries, wages and related
      costs
            
            
            8,958
            
            
            
            12,871
            
            
            
            24,363Vessel hire charges (Note
      4)
            
            
            518
            
            
            
            -
            
            
            
            -Depreciation (Notes 7 and
      8)
            
            
            2,226
            
            
            
            4,240
            
            
            
            6,373Amortization of drydocking costs
      (Note 9)
            
            
            636
            
            
            
            1,684
            
            
            
            3,172Amortization of concession
      agreement (Note 3)
            
            
            -
            
            
            
            -
            
            
            
            52Management fees (Note
      4)
            
            
            182
            
            
            
            223
            
            
            
            54Gain on sale of vessel (Note
      7)
            
            
            -
            
            
            
            -
            
            
            
            (2,693
            )Other operating expenses (Note
      14)
            
            
            16,629
            
            
            
            25,697
            
            
            
            39,042Total operating
      expenses
            
            
            493,950
            
            
            
            773,352
            
            
            
            1,322,075Operating
      income
            
            
            23,380
            
            
            
            30,460
            
            
            
            30,798OTHER
      INCOME/(EXPENSE):Write-off of deferred IPO costs
      (Note 16)
            
            
            -
            
            
            
            (1,588
            )
            
            
            -Interest and finance costs (Notes
      11, 12 and 15)
            
            
            (2,347
            )
            
            
            (5,207
            )
            
            
            (3,473
            )Interest
    income
            
            
            70
            
            
            
            976
            
            
            
            1,990Foreign exchange gains (losses),
      net
            
            
            396
            
            
            
            (414
            )
            
            
            (1,569
            )(1,881
            )
            
            
            (6,233
            )
            
            
            (3,052
            )Income before income
      taxes
            
            
            21,499
            
            
            
            24,227
            
            
            
            27,746Income taxes (Note
      20)
            
            
            (24
            )
            
            
            (2
            )
            
            
            (8
            )Net income
            
            $
            21,475
            
            
            $
            24,225
            
            
            $
            27,738Basic earnings per common
      share
            
            $
            0.72
            
            
            $
            0.84
            
            
            $
            0.65Diluted earnings per common
      share
            
            $
            0.72
            
            
            $
            0.84
            
            
            $
            0.65Weighted average number of shares,
      basic
            
            
            29,878,398
            
            
            
            28,954,521
            
            
            
            42,417,111Weighted average number of shares,
      diluted
            
            
            29,878,398
            
            
            
            28,954,622
            
            
            
            42,505,704




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





F-6


AEGEAN
MARINE PETROLEUM NETWORK INC.


COMBINED
AND CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


FOR
THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007




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




Common
      Stock#
      of Shares
            
            
            Par
      Value
            
            
            Additional
              Paid-in
      Capital
            
            
            Retained
              Earnings
            
            
            TotalBALANCE, December 31,
      2004
            
            
            30,472,827
            
            
            $
            305
            
            
            $
            14,454
            
            
            $
            9,702
            
            
            $
            24,461- Net
income
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            21,475
            
            
            
            21,475- Contribution to additional
      paid-in capital
            
            
            -
            
            
            
            -
            
            
            
            100
            
            
            
            -
            
            
            
            100- Dividends declared and paid
      ($0.05 per share)
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (1,509
            )
            
            
            (1,509
            )- Repurchase and cancellation of
      shares (Note 18)
            
            
            (2,437,827
            )
            
            
            (25
            )
            
            
            (14,554
            )
            
            
            (20,421
            )
            
            
            (35,000
            )BALANCE, 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
      17)
            
            
            -
            
            
            
            -
            
            
            
            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
      ($0.01 per
    share)
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (1,705
            )
            
            
            (1,705
            )- Issuance of common stockin connection with an
      acquisition
            
            
            20,000
            
            
            
            -
            
            
            
            773
            
            
            
            -
            
            
            
            773-Share-based compensation (Note
      17)
            
            
            31,428
            
            
            
            1
            
            
            
            1,919
            
            
            
            -
            
            
            
            1,920BALANCE, December 31,
      2007
            
            
            42,461,428
            
            
            $
            425
            
            
            $
            187,795
            
            
            $
            55,505
            
            
            $
            243,725











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


F-7


AEGEAN
MARINE PETROLEUM NETWORK INC.


COMBINED
AND CONSOLIDATED STATEMENTS OF CASH FLOWS


FOR
THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007





(Expressed in thousands of U.S.
dollars)




For
      the Year Ended December 31,2005
            
            
            2006
            
            
            2007Cash flows from operating
      activities:Net income
            
            $
            21,475
            
            
            $
            24,225
            
            
            $
            27,738Adjustments to reconcile net
      income to net cash provided by operating
      activities:Depreciation
            
            
            2,226
            
            
            
            4,240
            
            
            
            6,373Provision for doubtful
      accounts
            
            
            129
            
            
            
            412
            
            
            
            497Share-based
      compensation
            
            
            -
            
            
            
            38
            
            
            
            1,920Amortization
            
            
            654
            
            
            
            1,855
            
            
            
            3,457Gain on sale of
      vessel
            
            
            -
            
            
            
            -
            
            
            
            (2,693
            )Other non-cash
      charges
            
            
            14
            
            
            
            88
            
            
            
            320(Increase) decrease
      in:Trade
      receivables
            
            
            (42,088
            )
            
            
            (985
            )
            
            
            (115,707
            )Due from related
      companies
            
            
            409
            
            
            
            6,346
            
            
            
            (3,217
            )Insurance
      claims
            
            
            900
            
            
            
            -
            
            
            
            -Inventories
            
            
            (4,509
            )
            
            
            (24,250
            )
            
            
            (65,205
            )Prepayments and other current
      assets
            
            
            185
            
            
            
            (1,836
            )
            
            
            (9,414
            )Increase (decrease)
      in:Trade
    payables
            
            
            22,166
            
            
            
            12,897
            
            
            
            27,213Other payables to related
      companies
            
            
            56
            
            
            
            18
            
            
            
            35Accrued and other current
      liabilities
            
            
            882
            
            
            
            3,783
            
            
            
            3,751Decrease (increase) in other
      non-current assets
            
            
            (870
            )
            
            
            870
            
            
            
            (10
            )Payments for
      drydocking
            
            
            (154
            )
            
            
            (10,637
            )
            
            
            (3,186
            )Net cash provided by (used in)
      operating activities
            
            
            1,475
            
            
            
            17,064
            
            
            
            (128,128
            )Cash flows from investing
      activities:Advances for vessels under
      construction
            
            
            (11,228
            )
            
            
            (35,396
            )
            
            
            (55,529
            )Advances for vessel
      acquisitions
            
            
            (8,175
            )
            
            
            (34,895
            )
            
            
            (66,217
            )Corporate acquisitions, net of
      cash acquired
            
            
            -
            
            
            
            -
            
            
            
            (5,728
            )Net proceeds from sale of
      vessels
            
            
            -
            
            
            
            12,900
            
            
            
            8,276Purchase of other fixed
      assets
            
            
            (1,072
            )
            
            
            (83
            )
            
            
            (409
            )Decrease (increase) in restricted
      cash
            
            
            (14,498
            )
            
            
            2,284
            
            
            
            (5,085
            )Net cash used in investing
      activities
            
            
            (34,973
            )
            
            
            (55,190
            )
            
            
            (124,692
            )Cash flows from financing
      activities:Proceeds from long-term
      debt
            
            
            15,539
            
            
            
            41,714
            
            
            
            41,815Repayment of long-term
      debt
            
            
            (3,587
            )
            
            
            (42,866
            )
            
            
            (280
            )Net change in short-term
      borrowings
            
            
            39,000
            
            
            
            (42,993
            )
            
            
            133,000Net change in short-term related
      company borrowings
            
            
            23,595
            
            
            
            (23,595
            )
            
            
            -Financing costs
      paid
            
            
            (218
            )
            
            
            (520
            )
            
            
            (468
            )IPO proceeds, net of issuance
      costs
            
            
            -
            
            
            
            185,209
            
            
            
            -Share repurchase (Note
      18)
            
            
            (35,000
            )
            
            
            -
            
            
            
            -Dividends
    paid
            
            
            (1,509
            )
            
            
            (4,000
            )
            
            
            (1,705
            )Net cash provided by financing
      activities
            
            
            37,820
            
            
            
            112,949
            
            
            
            172,362Net increase (decrease) in cash
      and cash equivalents
            
            
            4,322
            
            
            
            74,823
            
            
            
            (80,458
            )Cash and cash equivalents at
      beginning of year
            
            
            3,280
            
            
            
            7,602
            
            
            
            82,425Cash and cash equivalents at end
      of year
            
            $
            7,602
            
            
            $
            82,425
            
            
            $
            1,967SUPPLEMENTAL
      CASH FLOW INFORMATIONCash paid during the year for
      interest:
            
            $
            1,636
            
            
            $
            5,777
            
            
            $
            3,935Cash paid during the year for
      income taxes:
            
            $
            8
            
            
            $
            18
            
            
            $
            8Shares issued to acquire a
      business:
            
            
            -
            
            
            
            -
            
            
            $
            773Other non-cashfinancing
      activities:
            
            $
            100
            
            
            
            -
            
            
            
            -




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


F-8
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND 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 combined and
consolidated financial statements include the accounts of Aegean Marine
Petroleum Network Inc. (hereinafter referred to as “Aegean”) and its
subsidiaries (Aegean and 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 the Marshall 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
combined and consolidated financial statements of the Company have been
presented giving retroactive effect to the transaction described above, using
combined and consolidated historical carrying costs of the assets and
liabilities.




In December 2006, Aegean completed 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
            
            05/18/2007Bunkers
      at Sea NV (the “NW Europe Service Center”)
            
            Belgium
            
            12/16/1999Portland
      Bunkers International Ltd. (the “UK Service Center”)
            
            United
      Kingdom
            
            12/13/1999









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




(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-9
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND 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
      VII Shipping Ltd. (“Aegean VII”)
            
            01/20/1998
            
            Aegean
      VII
            1984
            3,892
            02/04/1998Venus
      Holding Company (“Venus”)
            
            10/13/1999
            
            Aegean
      IX
            1976
            7,216
            06/14/2001Carmel
      Investment Corp. (“Carmel”)
            
            12/02/2002
            
            Aegean
      Rose
            1988
            4,935
            01/21/2003Evian
      Enterprises Co. (“Evian”)
            
            12/02/2002
            
            Aegean
      Daisy
            1988
            4,935
            01/21/2003Clyde
      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
            11,910
            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
            09/21/2007Baldwin
      Management Co. (“Baldwin”)
            
            09/25/2002
            
            Sara
            1990
            7,389
            10/09/2007





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





Vessel
      DetailsCompany
      Name
            
            Date
      of
              Incorporation
            
            Hull
              Number
            Size
              (dwt)Kithnos
      Maritime Inc. (“Kithnos”)
            
            01/28/2005
            
            DN-3500-3
            4,600Amorgos
      Maritime Inc. (“Amorgos”)
            
            01/28/2005
            
            DN-3500-4
            4,600Kimolos
      Maritime Inc. (“Kimolos”)
            
            01/28/2005
            
            DN-3500-5
            4,600Syros
      Maritime Inc. (“Syros”)
            
            01/28/2005
            
            DN-3500-6
            4,600Mykonos
      Maritime Inc. (“Mykonos”)
            
            01/28/2005
            
            DN-3500-7
            4,600Santorini
      Maritime Inc. (“Santorini”)
            
            01/28/2005
            
            DN-3500-8
            4,600Paros
      Maritime Inc. (“Paros”)
            
            01/28/2005
            
            DN-3500-9
            4,600Naxos
      Maritime 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
            2,400Sea
      Global S.A. (“Sea Global”)
            
            05/27/2005
            
            N
      2220000
            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
            5,500Eton
      Marine Ltd. (“Eton”)
            
            12/21/2005
            
            QHS
      220
            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
            5,500





F-10
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND 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)
            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
      office





As of December 31, 2006and 2007, Aegean’s ownership interest in all the
above subsidiaries, except for the UAE Service Center, amounted to
100%.




During
the years ended December 31, 2005, 2006 and 2007, 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 accompanying combined and 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, 2007, the accounts and operating results of the
Company. Intercompany balances and transactions have been eliminated in
combination and consolidation.




Use of
Estimates: The preparation of combined and 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 combined and 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. The Company
has no such transactions in the periods presented and, accordingly,
comprehensive income equals net income for all periods presented.




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 combined and consolidated
statements of 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.




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


2.      Significant
Accounting Policies: (Continued)




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 $67,909 and
$193,257, before allowances for bad debts of $1,106 and $1,603, as of December
31, 2006 and 2007, 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.




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 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 at least annually 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.




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


2.      Significant
Accounting Policies: (Continued)




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.




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.




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


2.      Significant
Accounting Policies: (Continued)




Repairs and
Maintenance:All vessel repair and
maintenance expenses, including major overhaulings (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 combined and 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. Generally, Aegean and its
subsidiaries are involved in non-taxable activities and, as such, no material
deferred tax assets or liabilities arose in any of the periods presented (refer
to Note 20).




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 reflects 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,
2007, 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.




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 Company is currently evaluating the potential effect on
the consolidated financial statements of adopting SFAS No. 160.





Business
Combinations. In December 2007, the FASB issued SFAS No. 141(R),
“Business Combinations” (“SFAS 141R”).  SFAS 141R supersedes SFAS No.
141 and establishes principles and requirements for how the acquirer of a
business recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, and any non-controlling interest in
the acquired. SFAS 141R also provides guidance for recognizing and measuring the
goodwill acquired in the business combination and determines what information to
disclose to enable users of the financial statements to evaluate the nature and
financial effects of the business combination.  SFAS 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. An entity may not apply it before that date. The Company is
currently evaluating the effect, if any; this statement may have on future
financial statements.


F-14
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND 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.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 is not expected to 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 is not expected to have a material impact on the Company’s
financial statements.





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.




3.      Significant
Acquisitions:




On October 9, 2007, the Company acquired
all of the outstanding share capital of Bunkers at Sea NV (“BAS”), a marine fuel
logistics company incorporated in Belgium, for a total consideration of $4,764
(excluding direct acquisition costs). BAS purchases, sells and delivers marine
fuel to end users such as shipping companies (which complements Aegean’s
business) and performs these functions in Northwestern Europe where Aegean
previously had no presence. The Company entered into this transaction on the
premise that Aegeanwould
increase itsmarket share
in NorthwesternEurope
where BAS has a presence.




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







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




F-15
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND 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
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 earning per
      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 the port of Portland (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.




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 cash
      equivalents
            
            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 the port
of Portland which gives Aegean an 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 was recognized for the
year ended December 31, 2007.




The
annual aggregate amortization expense expected to be recognized after December
31, 2007, are as follows:




Amount2008
            3122009
            3122010
            3122011
            3122012
            312







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 earning per
      share
            0.83
            
            0.61


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


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 450 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 select Greek refineries, plus a
      margin.




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 select 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 2005, 2006 and 2007, the Company purchased from the
Greek Subcontractor marine petroleum products of $99,417, $155,022 and $159,943,
respectively, all of which are included under cost of marine petroleum products
sold in the accompanying combined and consolidated statements of income. As of
December 31, 2006 and 2007, the amounts due to the Greek Subcontractor were
$19,203 and $27,193, respectively, and are included under trade payables to
related companies in the accompanying consolidated balance sheets.




(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:




(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, 2005, 2006 and
      2007, amounted to $182, $223 and $54, respectively, and are separately
      disclosed in the accompanying combined and consolidated statements of
      income.




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


4.      Transactions
with Related Parties:




(ii)
            Prior
      to January 1, 2006, the Company time chartered (short-term) certain
      vessels of Aegean Shipping in order to meet increased levels of demand for
      its services at times when its own vessels were operating at full
      capacity, or for special situations. Vessel hire charges for the year
      ended December 31, 2005 amounted to $518 and are separately disclosed in
      the accompanying combined and consolidated statements of
      income.




(iii)
            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, 2005, 2006 and 2007, amounted to $8,162, $13,146
      and $13,509, respectively, and are included under sales of marine
      petroleum products in the accompanying combined and consolidated
      statements of income.




(iv)
            On
      December 20, 2005, the Company purchased an 11,538 dwt (built in 1982)
      double hull bunkering tanker Aegean Pride from Aegean Shipping for a price
      of $6,700, which was fully paid on that date. The price includes Aegean
      Shipping’s initial purchase price of the vessel from an unrelated third
      party plus additional costs incurred by Aegean Shipping to convert the
      vessel into a bunkering tanker. The cost of this vessel is included under
      vessels, cost, in the accompanying consolidated balance
      sheets.




(v)
            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.




As
of December 31, 2006 and 2007, the amounts due from Aegean Shipping were $162
and $3,438, respectively, and are included in due from related companies in the
accompanying consolidated balance sheets.




(c)
            Golden Sun
      Marine Corp. (“Golden Sun”):Prior to June 1, 2005, the
      Company conducted business with Golden Sun, an investment and trading
      company in which Mr. Dimitris Melisanidis holds a controlling interest.
      During the year ended December 31, 2005, the Company purchased from Golden
      Sun marine petroleum products of $5,161, which are included under cost of
      marine petroleum products sold in the accompanying combined and
      consolidated statements of income. Effective June 1, 2005, the Company
      ceased purchasing marine petroleum products from Golden Sun and
      accordingly, during the years ended December 31, 2006 and 2007, the
      Company did not purchase marine petroleum products from Golden Sun. As of
      December 31, 2006 and 2007, no amounts were due to Golden
    Sun.




(d)
            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, 2006 and 2007, the Company’s sales to General
      Maritime amounted to $1,695 and $1,196, respectively, which are included
      under sales of marine petroleum products in the accompanying combined and
      consolidated statements of income. As of December 31, 2006 and 2007, the
      amounts due from General Maritime were $12 and $45, respectively, which
      are included in due from related companies in the accompanying
      consolidated balance sheets.




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


5.      Inventories:





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




December
      31,2006
            
            2007Held
      for sale:Marine
      Fuel Oil
            
            21,535
            
            72,255Marine
      Gas Oil
            
            7,972
            
            22,95029,507
            
            95,205Held
      for consumption:Marine
      fuel
            
            654
            
            1,195Lubricants
            
            394
            
            646Victuals
            
            79
            
            941,127
            
            1,935Total
            
            30,634
            
            97,140





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,
product oil 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, product oil tankers
with 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.




F-19
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND 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)




On
May 25, 2007, 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 $7,890, of
which $755 is payable in advance, $1,132 is payable upon steel-cutting, $1,132
is payable upon keel-laying, $1,133 is payable upon launching and $3,738 is
payable upon delivery and acceptance.




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, 2007, the account, advances for vessels under construction and
acquisitions, is analyzed as follows:




December
      31, 2007Vessel
      Name
            
            Year
      of Expected
              Delivery
            
            Contract
              Amount
            
            Contract
      Payments
            Capitalized
      Costs
            TotalFujian
      ShipyardDN-3500-3
            
            2007**
            
            8,425
            
            8,425
            682
            9,107DN-3500-4
            
            2007**
            
            8,425
            
            8,425
            445
            8,870DN-3500-5
            
            2008
            
            8,425
            
            4,593
            208
            4,801DN-3500-6
            
            2008
            
            8,425
            
            2,953
            84
            3,037DN-3500-7
            
            2008
            
            8,425
            
            2,953
            61
            3,014DN-3500-8
            
            2008
            
            8,425
            
            1,933
            122
            2,055DN-3500-9
            
            2008
            
            8,425
            
            1,933
            109
            2,042DN-3500-10
            
            2008
            
            8,425
            
            1,933
            86
            2,019DN-3800-11*
            
            2009
            
            7,890
            
            755
            20
            775DN-3800-12*
            
            2009
            
            7,890
            
            755
            20
            775DN-3800-13*
            
            2009
            
            7,890
            
            755
            20
            775DN-3800-14*
            
            2009
            
            7,890
            
            755
            20
            775DN-3800-15*
            
            2009
            
            7,890
            
            755
            20
            775Severnav
      ShipyardN
      2220000
            
            2008
            
            11,639
            
            6,495
            521
            7,016N
      2230007
            
            2008
            
            11,513
            
            3,725
            377
            4,102Qingdao
      Hyundai ShipyardQHS-207
            
            2009
            
            11,600
            
            4,080
            101
            4,181QHS-208
            
            2009
            
            11,600
            
            4,080
            91
            4,171QHS-209
            
            2009
            
            11,600
            
            4,080
            81
            4,161QHS-210
            
            2009
            
            11,600
            
            2,000
            76
            2,076QHS-215
            
            2009
            
            11,600
            
            2,000
            76
            2,076QHS-216
            
            2009
            
            11,600
            
            2,000
            76
            2,076QHS-217
            
            2009
            
            11,600
            
            2,000
            76
            2,076QHS-220
            
            2008
            
            11,000
            
            4,940
            223
            5,163QHS-221
            
            2008
            
            11,000
            
            4,940
            194
            5,134QHS-222
            
            2009
            
            11,000
            
            1,020
            83
            1,103QHS-223
            
            2009
            
            11,000
            
            1,020
            82
            1,102QHS-224
            
            2009
            
            11,000
            
            1,020
            101
            1,121Total
            
            266,202
            
            80,323
            4,055
            84,378





*Contract
amount does not include contract with the engineering firm which, as of December
31, 2007, was not signed. This contact is expected to be signed within
2008.


**Vessel
delivered in 2007 but as of December 31, 2007, was not positioned and
operational.








F-20
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND 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)





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, 2005,2006and 2007was $155,$1,295and $2,314, respectively.





During
the years ended December 31, 2006 and 2007, the movement of the account,
advances for vessels under construction and acquisitions, was as
follows:





Year Ended December
      31,2006
            
            
            2007Balance at beginning of
      period
            
            
            12,803
            
            
            
            46,779Advances for vessels under
      construction and related costs
            
            
            35,396
            
            
            
            55,529Payments for secondhand vessel
      acquisitions
            
            
            34,895
            
            
            
            66,217Vessels
      delivered
            
            
            (36,315
            )
            
            
            (84,147
            )Balance at end of
      period
            
            
            46,779
            
            
            
            84,378





As
of December 31, 2007, the remaining obligations under the construction and
supervision contracts are payable as follows:





Amount2008
            
            
            118,3502009
            
            
            67,529185,879





On June 3, 2005, in connection with the
shipbuilding contracts entered into with Severnav, the Company entered into a
call option agreement with Severnav for the design, construction and equipment
of four 2,400 dwt, double skin, double bottom, product oil tankers with roll-on
roll-off facilities for fuel trucks. The Company has the right to exercise the
option on two of the vessels on or before the launching of the first of the firm
product oil tankers mentioned above, and has the right to exercise the option on
the two remaining vessels on or before the delivery and acceptance of the first
of the firm product oil tankers mentioned above for a total price of Euro
26,240,000 (Euro 6,560,000 each). No consideration was paid by the Company for
the call option agreement.




On
January 13, 2006, in connection with the shipbuilding contracts entered into
with Qingdao Hyundai, the Company entered into a call option agreement with
Qingdao Hyundai for the construction and delivery of four double skin, double
bottom, 5,500 dwt class oil tankers. The Company has the right to exercise this
option on or before the delivery of the first of the five 5,500 dwt class oil
tankers mentioned above. If the Company exercises this option, Qingdao Hyundai
is bound to sign new shipbuilding contracts for the four vessels for a total
price of $38,200 ($9,550 each). No consideration was paid by the Company for the
call option agreement.




F-21
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)




7.      Vessels:





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





Vessel
      Cost
            
            
            Accumulated
      Depreciation
            
            
            Net
      Book
              ValueBalance,
      December 31, 2005
            
            
            47,528
            
            
            
            (5,514
            )
            
            
            42,014-
      Vessels acquired and delivered
            
            
            36,315
            
            
            
            -
            
            
            
            36,315-
      Vessels sold
            
            
            (12,900
            )
            
            
            -
            
            
            
            (12,900
            )-
      Depreciation for the year
            
            
            -
            
            
            
            (4,148
            )
            
            
            (4,148
            )Balance,
      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





On May 3, 2006, the acquired second-hand
bunkering tanker, Aegean XI, was delivered to the Company at atotal cost of $8,214. On July
25, 2006, the acquired
second-hand bunkering tanker, Aegean Force, was delivered to the Company at a
total cost of $5,085. On September 5, 2006, the acquired floating storage
facility, Fos, was delivered to the Company at a total cost of
$10,116.




During the year ended December 31, 2006,
the Company purchased two second-hand tankers, Omega Af Donso and Trapper, from
third-party sellers for a total amount of $12,900 and subsequently sold these
tankers to Aegean Shipping. No gain or loss was recognized by the Company on the
sale of these vessels.




On August 7, 2007, the acquired floating
storage facility, the Ouranos, with a total cost of $18,378 was operational at
the Company’s service center in Fujairah. On May 25, 2007,the acquired second-hand bunkering
tanker, AegeanPrincess, was delivered to the Company at
atotal cost of $12,241. On
September 21, 2007, the acquired floating storage facility, the Leader, was
delivered to the Company at a total cost of $20,473. On August 6, 2007, the
newly-constructed bunkering tanker, Milos (ex-DN-3500-1), with a total cost of
$9,051, was operational in the Company’s service center in Singapore. On October
10, 2007, the two bunkering tankers, the Sara and Vera, with total costs of
$6,017 and $1,964, respectively, were delivered to the Company. On December 4,
2007, the acquired double hull tanker, the Hope, with a total cost of $7,144,
was operational in the Company’s service center in Jamaica.  On
December 31, 2007, the newly-constructed bunkering tanker, Serifos
(ex-DN-3500-2), with a total cost of $8,879, was operational in the Company’s
service center in Singapore.




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 accompanyingcombined andconsolidatedstatement of incomefor theyearendedDecember 31, 2007.




Cost of vessels at December 31,
2005, 2006 and 2007, includes $8,913, $8,747 and $19,402, 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, 2007, all of the Company’soperationalvessels, except for the Aegean Flower, Aegean
VII and Aegean IX,were
mortgaged under the Company’svarious debt
agreements.




F-22
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND 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, 2005
            
            1,008
            
            258
            
            1,266-
      Additions
            
            -
            
            83
            
            83Cost,
      December 31, 2006
            
            1,008
            
            341
            
            1,349-
      Additions
            
            -
            
            409
            
            409Cost,
      December 31, 2007
            
            1,008
            
            750
            
            1,758Accumulated
      depreciation, December 31, 2005
            
            20
            
            31
            
            51-
      Depreciation expense
            
            34
            
            58
            
            92Accumulated
      depreciation, December 31, 2006
            
            54
            
            89
            
            143-
      Depreciation expense
            
            33
            
            151
            
            184Accumulated
      depreciation, December 31, 2007
            
            87
            
            240
            
            327Net
      book value, December 31, 2005
            
            988
            
            227
            
            1,215Net
      book value, December 31, 2006
            
            954
            
            252
            
            1,206Net
      book value, December 31, 2007
            
            921
            
            510
            
            1,431








9.      Deferred
Charges:





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





Drydocking
            
            
            Financing
      Costs
            
            
            TotalBalance,
      December 31, 2005
            
            
            931
            
            
            
            286
            
            
            
            1,217-
      Additions
            
            
            10,637
            
            
            
            520
            
            
            
            11,157-
      Amortization for the year
            
            
            (1,684
            )
            
            
            (171
            )
            
            
            (1,855
            )Balance,
      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





The
amortization for drydocking costs is separately reflected in the accompanying
combined and consolidated statements of income. The amortization of financing
costs is included in interest and finance costs in the accompanying combined and
consolidated statements of income.


F-23
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


10.
            Prepayments
      and Other Current Assets:





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





December
      31,2006
            
            
            2007VAT
      receivable
            
            
            1,134
            
            
            
            9,055Other
      prepayments
            
            
            1,527
            
            
            
            3,362Total
            
            
            2,661
            
            
            
            12,417








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 bears interest at
LIBOR plus 1.25%. The multi-currency revolving guarantee and letter of credit
facility of up to $100,000 charges 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
will be used for working capital purposes and expires on December 31, 2008. The
revolving overdraft facility of up to $150,000 bears interest at LIBOR plus
1.25%. The multi-currency revolving guarantee and letter of credit facility of
up to $150,000 charges a commission of 0.25% for documentary letters of credit,
and of 0.625% for standby letters of credit.




The
2007 Senior Credit Facility is 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 is 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 contains certain covenants which
include 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.




As
of December 31, 2006, the Company did not have any short-term borrowings
outstanding. As of December 31, 2007, the Company had an overdraft balance of
$133,000 under the 2007 Senior Credit Facility.




Total
interest incurred on short-term borrowings for the years ended December 31,
2005, 2006 and 2007 amounted to $900, $2,839 and $1,082, respectively, and is
included in interest expense and finance costs, in the accompanying combined and
consolidated statements of income.




F-24
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


12.
            Long-term
      Debt:





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





December
      31,Borrower(s)
            
            2006
            
            
            2007(a)
            Ocean
      and Sea Global
            
            
            13,503
            
            
            
            15,093(b)
            Serifos,
      Kithnos, Santorini, Paros and Naxos
            
            
            4,964
            
            
            
            17,668(c)
            Milos,
      Amorgos, Kimolos, Syros and Mykonos
            
            
            4,175
            
            
            
            -(c)
            Aegean
            
            
            -
            
            
            
            19,342(d)
            Eton,
      Benmore and Ingram
            
            
            2,350
            
            
            
            3,760(e)
            Tasman
      and Santon
            
            
            1,504
            
            
            
            4,512(f)
            Kerkyra,
      Ithaki, Cephallonia, Paxoi,
              Zakynthos,
      Lefkas and Kythira
            
            
            7,000
            
            
            
            11,500(g)
            Andros,
      Dilos, Ios, Sifnos and Tinos
            
            
            -
            
            
            
            3,156Total
            
            
            33,496
            
            
            
            75,031Less:
      Current portion
            
            
            (833
            )
            
            
            (3,650
            )Long-term
      portion
            
            
            32,663
            
            
            
            71,381





(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, 2005, 2006 and 2007, the weighted average interest rate
(including the margin) was 3.91%, 4.33% and 5.57%, respectively, while at
December 31, 2006 and 2007, the interest rate (including the margin) was 5.03%
and 6.12%, 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, 2006 and 2007, the outstanding balance of the loan was $13,503
(Euro 10,252,500) and $15,093 (Euro 10,252,500), 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.




(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.




F-25
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND 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 1.40% 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, 2005, 2006 and 2007, the weighted average interest rate
(including the margin) was 5.90%, 6.57% and 6.73%, respectively, while at
December 31, 2006 and 2007, the interest rate (including the margin) was 6.77%
and 6.27%, respectively. As of December 31, 2006 and 2007, the outstanding
balance of the loan was $4,964 and $17,668, 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.




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, 2006 and 2007, the weighted average interest rate
(including the margin) was 6.46% and 6.37%, respectively, while at December 31,
2006 and 2007, the interest rate (including the margin) was 6.50% and 6.07%,
respectively. As of December 31, 2006 and 2007, the outstanding balance of the
loan was $4,175 and $19,342, respectively.




(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.




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, 2006 and 2007, the weighted average interest rate (including
      the margin) was 6.67% and 6.42%, respectively, while at December 31, 2006
      and 2007, the interest rate (including the margin) was 6.67% and 6.04%,
      respectively. As of December 31, 2006 and 2007, the outstanding balance of
      the loan was $2,350 and $3,760,
respectively.




(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.




F-26
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND 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 1.15% 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, 2006 and 2007, the
      weighted average interest rate (including the margin) was 6.47% and 6.42%,
      respectively, while at December 31, 2006 and 2007, the interest rate
      (including the margin) was 6.51% and 5.99%, respectively. As of December
      31, 2006 and 2007, the outstanding balance of the loan was $1,504 and
      $4,512, 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, 2006 and 2007, the weighted average interest rate (including
      the margin) was 6.52% and 6.53%, respectively, while at December 31, 2006
      and 2007, the interest rate (including the margin) was 6.52% and 6.12%,
      respectively. As of December 31, 2006 and 2007, the outstanding balance of
      the loan was $7,000 and $11,500,
respectively.




(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.




The
      loan bears interest at LIBOR plus 0.90% before delivery of each vessel and
      at LIBOR plus 0.85% after such vessel’s delivery. During the year ended
      December 31, 2007, the weighted average interest rate (including the
      margin) was 6.06%, while at December 31, 2007, the interest rate
      (including the margin) was 5.76%. As of December 31, 2007, the outstanding
      balance of the loan was $3,156.




F-27
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND 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, 2007, 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 $(1,694)
and $(4,683), as of December 31, 2006 and 2007, respectively.




As
of December 31, 2007, all of the Company’s vessels-under-construction as well as
two newly-completed vessels, the Milos (ex-DN-3500-1) and the Serifos
(ex-DN-3500-2), having a total carrying value of $102,308, 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, 2005, 2006
and 2007 amounted to $1,036 and $2,779 and $2,958, respectively, and is included
in interest expense and finance costs in the accompanying combined and
consolidated statements of income. Accrued interest expense on long-term debt as
of December 31, 2006 and 2007 amounted to $153 and $236, 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 $159,608 as of December 31, 2007.




The
annual principal payments required to be made after December 31, 2007, are as
follows:




Amount2008
            3,6502009
            5,1262010
            5,6692011
            5,3972012
            5,3062013
      and thereafter
            49,88375,031





F-28
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND 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, 2007, the total outstanding standby letters of credit
      amounted to $136,703. 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 2008.
      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 combined and 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, is 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 Company believes that this claim is unwarranted
      and lacking in merit, and management is confident that the Company will
      not incur a material loss in connection with this
  lawsuit.




Various
      claims, suits, and complaints, 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 combined and
      consolidated financial statements.




F-29
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND 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 combined and consolidated statements of income are
analyzed as follows:




Year
      Ended December 31,2005
            
            
            2006
            
            
            2007Bunkering
      tanker voyage expenses
            
            
            445
            
            
            
            490
            
            
            
            784Bunkering
      tanker insurance
            
            
            859
            
            
            
            1,070
            
            
            
            1,315Bunkering
      tanker repairs and maintenance
            
            
            2,103
            
            
            
            1,940
            
            
            
            2,958Bunkering
      tanker spares and consumable stores
            
            
            1,245
            
            
            
            1,338
            
            
            
            1,874Bunkering tanker consumption
              of
      marine petroleum products
            
            
            1,821
            
            
            
            3,636
            
            
            
            7,865Operating
      cost of the Aegean Hellas
            
            
            4,576
            
            
            
            6,058
            
            
            
            2,930Storage
      costs
            
            
            -
            
            
            
            3,396
            
            
            
            2,778Cargo
      transportation
            
            
            -
            
            
            
            -
            
            
            
            4,466Provision
      for doubtful accounts
            
            
            129
            
            
            
            412
            
            
            
            498Other
            
            
            5,451
            
            
            
            7,357
            
            
            
            13,574Total
            
            
            16,629
            
            
            
            25,697
            
            
            
            39,042








15.   Interest
and Finance Costs:





The
amounts in the accompanying combined and consolidated statements of income are
analyzed as follows:





Year
      Ended December 31,2005
            
            
            2006
            
            
            2007Interest
      on long-term debt
            
            
            1,036
            
            
            
            2,779
            
            
            
            2,958Interest
      on short-term borrowings
            
            
            900
            
            
            
            2,839
            
            
            
            1,082Amortization
      of financing fees
            
            
            18
            
            
            
            171
            
            
            
            233Bank
      commissions, commitment fees and other charges
            
            
            548
            
            
            
            713
            
            
            
            1,514Capitalized
      interest (Notes 6 and 12)
            
            
            (155
            )
            
            
            (1,295
            )
            
            
            (2,314
            )Total
            
            
            2,347
            
            
            
            5,207
            
            
            
            3,473








16.
            Postponement
      of Initial Public Offering:





On
November 17, 2005, the Company filed a Registration Statement on Form F-1 with
the Securities and Exchange Commission for an initial public offering of
10,000,000 shares of its common stock. Subsequently, within the first quarter of
2006, the Company temporarily postponed the IPO. In accordance with SAB Topic
5A, during the year ended December 31, 2006, the Company has written off all
previously-deferred costs in connection with the offering of $1,588, which are
separately presented in the combined and consolidated statement of income for
year ended December 31, 2006.




F-30
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


17.
            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.




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 requisite
period. The expense is recorded in salaries, wages and related costs in the
accompanying combined and 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.




All
grants of restricted stock issued under the 2006 Plan are subject to accelerated
vesting upon certain circumstances set forth in the 2006 Plan.




The
following table summarizes the status of the Company’s unvested restricted stock
outstanding for the years ended December 31, 2006 and 2007:




Unvested
              Restricted
      Stock
            
            
            Weighted Average
              Grant Date Fair
      ValueAt
      December 31, 2005
            
            
            -
            
            
            
            -Granted
            
            
            107,143
            
            
            
            15.75At
      December 31, 2006
            
            
            107,143
            
            
            
            15.75Granted
            
            
            148,767
            
            
            
            15.52Vested
            
            
            (28,828
            )
            
            
            16.43At
      December 31, 2007
            
            
            227,082
            
            
            
            15.51




Total
compensation cost of $38 and $1,807 was recognized and included under salaries,
wages and related costs in the accompanying combined and consolidated statements
of income for the years ended December 31, 2006 and 2007,
respectively.




F-31
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


17.   Equity
Incentive Plan: (Continued)





As
of December 31, 2007, there was $2,151 of total unrecognized compensation cost
related to non-vested restricted stock awards. This unrecognized compensation
cost at December 31, 2007, is expected to be recognized as compensation expense
over a weighted average period of 2.2 years as follows:




Amount2008
            1,1792009
            5922010
            2912011
            892,151







18.   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.




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.




Stock
Split-ups




On
November 14, 2005, Aegean effected a stock split-up in the form of a
dividend.  The stock dividend declared and paid, of 22,249,080 shares
of Aegean’s common stock, was distributed to Aegean’s sole shareholder, Leveret.
On November 21, 2006, Aegean effected a stock split-up in the form of a
dividend. The stock dividend declared and paid, of 5,785,000 shares of Aegean’s
common stock, was distributed to Aegean’s shareholders as of that date, on a
pro-rata basis.




The
combined and consolidated financial statements for all periods presented give
retroactive effect to the above-described share issuance and split-ups of common
shares.




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.




F-32
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


18.   Common
Stock and Additional Paid-In Capital: (Continued)







Dividends




The
Company declared and paid dividends of $1,509, $4,000 and $1,705 during the
years ended December 31, 2005, 2006 and 2007, 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.







19.   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 31,2005
            
            
            2006
            
            
            2007Basic
      and diluted income
              Available to common stockholders
            
            $
            21,475
            
            
            $
            24,225
            
            
            $
            27,738Basic
      weighted average number
              of
      common shares outstanding
            
            
            29,878,398
            
            
            
            28,954,521
            
            
            
            42,417,111Add:
      Dilutive effect of unvested restricted stock
            
            
            -
            
            
            
            101
            
            
            
            88,593Diluted
      weighted average number
              of
      common shares outstanding
            
            
            29,878,398
            
            
            
            28,954,622
            
            
            
            42,505,704Basic
      earnings per common share
            
            $
            0.72
            
            
            $
            0.84
            
            
            $
            0.65Diluted
      earnings per common share
            
            $
            0.72
            
            
            $
            0.84
            
            
            $
            0.65








20.   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.




F-33
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise stated)


20.   Income
Taxes: (Continued)





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 combined and
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 $24, $2 and $8 for the years
ended December 31, 2005, 2006 and 2007, respectively, which is separately
reflected in the accompanying combined and consolidated statements of
income.







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.




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 31,2005
            
            
            2006
            
            
            2007Greece
            
            
            125,540
            
            
            
            167,061
            
            
            
            165,231United
      Arab Emirates
            
            
            130,459
            
            
            
            180,453
            
            
            
            287,347Gibraltar
            
            
            152,372
            
            
            
            240,412
            
            
            
            433,524Jamaica
            
            
            77,385
            
            
            
            147,211
            
            
            
            212,093Singapore
            
            
            -
            
            
            
            39,496
            
            
            
            193,747Northern
      Europe
            
            
            -
            
            
            
            -
            
            
            
            37,443Other
            
            
            19,849
            
            
            
            16,024
            
            
            
            16,464Total
            
            
            505,605
            
            
            
            790,657
            
            
            
            1,345,849





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.




F-34
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO COMBINED AND 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)







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 31,2006
            
            
            2007Gibraltar
            
            
            23,492
            
            
            
            39,510United
      Arab Emirates
            
            
            14,572
            
            
            
            31,364Jamaica
            
            
            14,071
            
            
            
            10,975Singapore
            
            
            5,656
            
            
            
            29,245Northern
      Europe
            
            
            -
            
            
            
            19,639Other
            
            
            4,696
            
            
            
            6,252Total
            
            
            62,487
            
            
            
            136,985








F-35


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 registration statement on its behalf.




AEGEAN MARINE PETROLEUM
      NETWORK INC.By:
            /s/ E. Nikolas
      TavlariosName:E. Nikolas
      Tavlarios
              Title:PresidentDate:April 4, 2008