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,
2009





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)E.
      Nikolas Tavlarios, investor@ampni.com,
      299 Park Avenue, 2nd
      Floor, New York, New York 10171(Name, Telephone,
      E-mail and/or Facsimile, and address of Company Contact
      Person)
















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





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











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







NONE(Title of
      class)





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





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


NONE(Title of
      class)


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





43,009,303
shares of common stock, par value $0.01 per share.





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




Yes
              ____
              
              No
              X


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





Yes
            ____
            
            No
            X





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





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





Yes
            X
            
            No
            ____





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such
files).





Yes
            ___
            
            No
            ___





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





Large
      accelerated filer   x
            Accelerated
      filer   oNon-accelerated
      filer   o





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





X
            U.S.
      GAAP___
            International
      Financial Reporting Standards as issued by the international Accounting
      Standards Board___
            Other





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





_____
            Item
      17
            ____
            Item 18




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







Yes
            ____
            
            No
            X










TABLE
OF CONTENTS






PART
I
 
 ITEM
      1 -
              IDENTITY
      OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
              1ITEM
      2 -
              OFFER
      STATISTICS AND EXPECTED TIMETABLE
              1ITEM
      3 -
              KEY
      INFORMATION
              1ITEM
      4 -
              INFORMATION
      ON THE COMPANY
              19ITEM
      4A -
              UNRESOLVED
      STAFF COMMENTS
              35ITEM
      5 -
              OPERATING
      AND FINANCIAL REVIEW AND PROSPECTS
              35ITEM
      6 -
              DIRECTORS,
      SENIOR MANAGEMENT AND EMPLOYEES
              61ITEM
      7 -
              MAJOR
      SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
              66ITEM
      8 -
              FINANCIAL
      INFORMATION
              69ITEM
      9 -
              THE
      OFFER AND LISTING
              70ITEM
      10 -
              ADDITIONAL
      INFORMATION
              71ITEM
      11 -
              QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK
              75ITEM
      12 -
              DESCRIPTION
      OF SECURITIES OTHER THAN EQUITY SECURITIES
              76
 PART
II
 
 ITEM
      13 -
              DEFAULTS,
      DIVIDEND ARREARAGES AND DELINQUENCIES
              77ITEM
      14 -
              MATERIAL
      MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
      PROCEEDS
              77ITEM
      15 -
              CONTROLS
      AND PROCEDURES
              77ITEM
      16A-
              AUDIT
      COMMITTEE FINANCIAL EXPERT
              78ITEM
      16B-
              CODE
      OF ETHICS
              78ITEM
      16C-
              PRINCIPAL
      ACCOUNTANT FEES AND RELATED SERVICES
              78ITEM
      16D-
              EXEMPTIONS
      FROM THE LISTING STANDARDS FOR AUDIT COMMITTEE
              78ITEM
      16E-
              PURCHASES
      OF EQUITY SECURITIES BY ISSUER AND AFFILIATES.
              78ITEM
      16F-
              CHANGE
      IN REGISTRANT'S CERTIFYING ACCOUNTANT.
              79ITEM
      16G-
              CORPORATE
      GOVERNANCE.
              79
 PART
III
 
 ITEM
      17 -
              FINANCIAL
      STATEMENTS
              79ITEM
      18 -
              FINANCIAL
      STATEMENTS
              79ITEM
      19 –
              EXHIBITS
              80INDEX
      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 U.S. Securities and Exchange Commission filings.







PART
I




ITEM
      1.
            IDENTITY
      OF DIRECTORS, SENIOR MANAGEMENT AND
ADVISERS




Not
applicable.




ITEM 2.
            OFFER STATISTICS AND EXPECTED
      TIMETABLE




Not
applicable.




ITEM
      3.
            KEY
      INFORMATION




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




A. Selected Financial
Data




For
      the Year Ended
              December
      31,  2005
            
            2006
            
            2007
            
            2008
            
            2009(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
              
              
              505,605
              
              
              
              790,657
              
              
              
              1,345,849
              
              
              
              2,768,067
              
              
              
              2,449,445Voyage
      revenues
              
              
              10,450
              
              
              
              11,639
              
              
              
              5,758
              
              
              
              1,379
              
              
              
              9,044Other
      revenues
              
              
              1,275
              
              
              
              1,516
              
              
              
              1,266
              
              
              
              8,526
              
              
              
              12,471Total
      revenues
              
              
              517,330
              
              
              
              803,812
              
              
              
              1,352,873
              
              
              
              2,777,972
              
              
              
              2,470,960Cost
      of marine petroleum products sold (exclusive of items shown separately
      below)
              
              
              464,801
              
              
              
              728,637
              
              
              
              1,251,712
              
              
              
              2,594,443
              
              
              
              2,266,960Salaries,
      wages and related costs
              
              
              8,958
              
              
              
              12,871
              
              
              
              24,363
              
              
              
              41,666
              
              
              
              47,708Vessel
      hire charges
              
              
              518
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Depreciation
              
              
              2,226
              
              
              
              4,240
              
              
              
              6,373
              
              
              
              12,604
              
              
              
              16,792Amortization
      of drydocking costs
              
              
              636
              
              
              
              1,684
              
              
              
              3,172
              
              
              
              3,640
              
              
              
              4,574Amortization
      of concession agreement
              
              
              -
              
              
              
              -
              
              
              
              52
              
              
              
              313
              
              
              
              312Management
      fees
              
              
              182
              
              
              
              223
              
              
              
              54
              
              
              
              -
              
              
              
              -Gain
      on sale of vessel
              
              
              -
              
              
              
              -
              
              
              
              (2,693
              )
              
              
              -
              
              
              
              (4,094
              )Other
      operating expenses
              
              
              16,629
              
              
              
              25,697
              
              
              
              39,042
              
              
              
              73,157
              
              
              
              79,492Operating
      income
              
              
              23,380
              
              
              
              30,460
              
              
              
              30,798
              
              
              
              52,149
              
              
              
              59,216Write-off
      of deferred offering costs (1)
              
              
              -
              
              
              
              (1,588
              )
              
              
              -
              
              
              
              -
              
              
              
              -Interest
      and finance costs
              
              
              (2,347
              )
              
              
              (5,207
              )
              
              
              (3,473
              )
              
              
              (12,377
              )
              
              
              (10,255
              )Interest
      income
              
              
              70
              
              
              
              976
              
              
              
              1,990
              
              
              
              501
              
              
              
              46Foreign
      exchange gains (losses), net
              
              
              396
              
              
              
              (414
              )
              
              
              (1,569
              )
              
              
              1,521
              
              
              
              (329
              )Income
      taxes
              
              
              (24
              )
              
              
              (2
              )
              
              
              (8
              )
              
              
              (1,879
              )
              
              
              (153
              )Net
      income
              
              
              21,475
              
              
              
              24,225
              
              
              
              27,738
              
              
              
              39,915
              
              
              
              48,525Basic
      earnings per share (2)
              
              
              0.72
              
              
              
              0.84
              
              
              
              0.65
              
              
              
              0.94
              
              
              
              1.13Diluted
      earnings per share (2)
              
              
              0.72
              
              
              
              0.84
              
              
              
              0.65
              
              
              
              0.94
              
              
              
              1.13Weighted
      average number of shares, basic (2)
              
              
              29,878,398
              
              
              
              28,954,521
              
              
              
              42,417,111
              
              
              
              42,497,450
              
              
              
              42,579,187Weighted
      average number of shares, diluted (2)
              
              
              29,878,398
              
              
              
              28,954,622
              
              
              
              42,505,704
              
              
              
              42,625,801
              
              
              
              42,644,448Dividends
      declared per share (2)
              
              
              0.05
              
              
              
              0.14
              
              
              
              0.04
              
              
              
              0.04
              
              
              
              0.04


1





As
      of and for the Year Ended
              December
      31, 2005
            
            2006
            
            2007
            
            2008
            
            2009 (in
      thousands of U.S. dollars, unless otherwise stated)  Balance
      Sheet Data:Cash
      and cash equivalents
              
              
              7,602
              
              
              
              82,425
              
              
              
              1,967
              
              
              
              46,927
              
              
              
              54,841Total
      assets
              
              
              161,359
              
              
              
              315,877
              
              
              
              566,957
              
              
              
              641,907
              
              
              
              967,345Total
      debt
              
              
              101,236
              
              
              
              33,496
              
              
              
              208,031
              
              
              
              253,621
              
              
              
              401,037Total
      liabilities
              
              
              151,832
              
              
              
              100,878
              
              
              
              323,232
              
              
              
              356,904
              
              
              
              632,288Total
      stockholders' equity
              
              
              9,527
              
              
              
              214,999
              
              
              
              243,725
              
              
              
              285,003
              
              
              
              335,057Other
      Financial Data:Gross
      spread on marine petroleum products (3)
              
              
              40,804
              
              
              
              62,020
              
              
              
              89,671
              
              
              
              160,963
              
              
              
              176,498Gross
      spread on lubricants(3)
              
              
              264
              
              
              
              455
              
              
              
              536
              
              
              
              1,298
              
              
              
              2,755Gross
      spread on marine fuel(3)
              
              
              40,540
              
              
              
              61,565
              
              
              
              89,135
              
              
              
              159,665
              
              
              
              173,743Gross
      spread per metric ton of marine fuel sold
                (U.S. dollars) (3)
              
              
              23.2
              
              
              
              26.0
              
              
              
              25.9
              
              
              
              30.7
              
              
              
              28.1EBITDA(4)
              
              
              26,638
              
              
              
              34,382
              
              
              
              38,826
              
              
              
              70,227
              
              
              
              80,565Net
      cash provided by (used in) operating activities
              
              
              1,475
              
              
              
              17,064
              
              
              
              (128,128
              )
              
              
              136,737
              
              
              
              (61,353
              )Net
      cash used in investing activities
              
              
              34,973
              
              
              
              55,190
              
              
              
              124,692
              
              
              
              135,667
              
              
              
              75,230Net
      cash provided by financing activities
              
              
              37,820
              
              
              
              112,949
              
              
              
              172,362
              
              
              
              43,890
              
              
              
              144,497Operating
      Data:Sales
      volume of marine fuel (metric tons) (5)
              
              
              1,746,377
              
              
              
              2,367,289
              
              
              
              3,437,269
              
              
              
              5,200,256
              
              
              
              6,192,755Number
      of markets served, end of period (6)
              
              
              4.0
              
              
              
              5.0
              
              
              
              6.0
              
              
              
              11.0
              
              
              
              14.0Number
      of operating bunkering vessels, end of period (7)
              
              
              10.0
              
              
              
              12.0
              
              
              
              17.0
              
              
              
              30.0
              
              
              
              38.0Average
      number of operating bunkering vessels (7)(8)
              
              
              9.0
              
              
              
              11.1
              
              
              
              13.5
              
              
              
              22.7
              
              
              
              33.7Specialty
      tankers, end of period
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1
              
              
              
              -Special
      purpose vessels, end of period (9)
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1
              
              
              
              1Floating
      storage facilities, end of period (10)
              
              
              -
              
              
              
              2
              
              
              
              2
              
              
              
              4
              
              
              
              3





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




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




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




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, 2005
            
            2006
            
            2007
            
            2008
            
            2009 (in
      thousands of U.S. dollars, unless otherwise stated) Sales
      of marine petroleum products
                
                
                505,605
                
                
                
                790,657
                
                
                
                1,345,849
                
                
                
                2,768,067
                
                
                
                2,449,445Less:
      Cost of marine petroleum products sold
                
                
                464,801
                
                
                
                728,637
                
                
                
                1,251,712
                
                
                
                2,594,443
                
                
                
                2,266,960Less:
      Cargo transportation costs
                
                
                -
                
                
                
                -
                
                
                
                4,466
                
                
                
                12,661
                
                
                
                5,987Gross
      spread on marine petroleum products
                
                
                40,804
                
                
                
                62,020
                
                
                
                89,671
                
                
                
                160,963
                
                
                
                176,498Less:
      Gross spread on lubricants
                
                
                264
                
                
                
                455
                
                
                
                536
                
                
                
                1,298
                
                
                
                2,755Gross
      spread on marine fuel
                
                
                40,540
                
                
                
                61,565
                
                
                
                89,135
                
                
                
                159,665
                
                
                
                173,743Sales
      volume of marine fuel (metric tons)
                
                
                1,746,377
                
                
                
                2,367,289
                
                
                
                3,437,269
                
                
                
                5,200,256
                
                
                
                6,192,755Gross
      spread per metric ton of marine fuel sold (U.S. dollars)
                
                
                23.2
                
                
                
                26.0
                
                
                
                25.9
                
                
                
                30.7
                
                
                
                28.1





The
following table reconciles our gross spread on marine petroleum products sold to
the most directly comparable United States generally accepted accounting
principles, or U.S. GAAP, measure, operating income, for all periods
presented:




For
      the Year Ended
              December
      31, 2005
            
            2006
            
            2007
            
            2008
            
            2009


(in
      thousands of U.S. dollars) Gross
      spread on marine petroleum products
              
              
              40,804
              
              
              
              62,020
              
              
              
              89,671
              
              
              
              160,963
              
              
              
              176,498Add:
      Voyage revenues
              
              
              10,450
              
              
              
              11,639
              
              
              
              5,758
              
              
              
              1,379
              
              
              
              9,044Add:
      Other revenues
              
              
              1,275
              
              
              
              1,516
              
              
              
              1,266
              
              
              
              8,526
              
              
              
              12,471Add:
      Gain on sale of vessel
              
              
              -
              
              
              
              -
              
              
              
              2,693
              
              
              
              -
              
              
              
              4,094Add:
      Cargo transportation costs
              
              
              -
              
              
              
              -
              
              
              
              4,466
              
              
              
              12,661
              
              
              
              5,987Less:
      Salaries, wages and related costs
              
              
              (8,958
              )
              
              
              (12,871
              )
              
              
              (24,363
              )
              
              
              (41,666
              )
              
              
              (47,708
              )Less:
      Vessel hire charges
              
              
              (518
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Less:
      Depreciation
              
              
              (2,226
              )
              
              
              (4,240
              )
              
              
              (6,373
              )
              
              
              (12,604
              )
              
              
              (16,792
              )Less:
      Amortization
              
              
              (636
              )
              
              
              (1,684
              )
              
              
              (3,224
              )
              
              
              (3,953
              )
              
              
              (4,886
              )Less:
      Management fees
              
              
              (182
              )
              
              
              (223
              )
              
              
              (54
              )
              
              
              -
              
              
              
              -Less:
      Other operating expenses
              
              
              (16,629
              )
              
              
              (25,697
              )
              
              
              (39,042
              )
              
              
              (73,157
              )
              
              
              (79,492
              )Operating
      income
              
              
              23,380
              
              
              
              30,460
              
              
              
              30,798
              
              
              
              52,149
              
              
              
              59,216





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




3


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




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




(4)
            EBITDA
      represents net income before interest, taxes, depreciation and
      amortization. EBITDA does not represent and should not be considered as an
      alternative to net income, operating income or any other indicator of
      Company's performance, as determined by U.S. GAAP and our calculation of
      EBITDA may not be comparable to that reported by other companies. EBITDA
      is included herein because it is a basis upon which the Company assesses
      its operating performance and because the Company believes that it
      presents useful information to investors regarding the Company's ability
      to service and/or incur indebtedness. The following table reconciles net
      income to EBITDA for the periods
presented:




For
      the Year Ended
                  December
      31, 2005
                
                2006
                
                2007
                
                2008
                
                2009
 (in
      thousands of U.S. dollars)
 Net
      income
              
              
              21,475
              
              
              24,225
              
              
              
              27,738
              
              
              
              39,915
              
              
              
              48,525Add:
      Net financing cost
              
              
              2,277
              
              
              4,231
              
              
              
              1,483
              
              
              
              11,876
              
              
              
              10,209Add:
      Income taxes
              
              
              24
              
              
              2
              
              
              
              8
              
              
              
              1,879
              
              
              
              153Add:
      Depreciation and amortization
              
              
              2,862
              
              
              5,924
              
              
              
              9,597
              
              
              
              16,557
              
              
              
              21,678EBITDA
              
              
              26,638
              
              
              34,382
              
              
              
              38,826
              
              
              
              70,227
              
              
              
              80,565







(5)
            The
      sales volume of marine fuel is the volume of sales of MFO and MGO for the
      relevant period and is denominated in metric tons. We do not utilize the
      sales volume of lubricants as an indicator. The sales volume of marine
      fuel includes the volume of sales made to the United States Navy, which
      individually accounted for approximately 3% of our total revenues for the
      year ended December 31, 2005. Sales to the United States Navy comprised
      less than 1% of our total revenues for the years ended December 31, 2006,
      2007, 2008 and 2009.




(6)
            The
      number of markets served includes our operations at our service centers in
      the United Arab Emirates, Gibraltar, Jamaica, Singapore, Northern Europe,
      West Africa, Vancouver, Portland (U.K.), Trinidad and Tobago (Southern
      Caribbean), Tangiers (Morocco) and Greece, where we conduct operations
      through our related company, Aegean Oil, as well as our trading operations
      in Montreal and Mexico. The number of markets served is an indicator of
      the geographical distribution of our operations and affects both the
      amount of revenues and expenses that we record during a given period. We
      commenced physical supply operations in Singapore on June 2, 2006, in
      Northern Europe on October 9, 2007, in Ghana on January 15, 2008, in
      Portland (U.K.) on April 1, 2008, in Canada and Mexico on July 1, 2008, in
      Trinidad and Tobago on April 1, 2009 and in Tangiers, Morocco on August
      25, 2009.




(7)
            Bunkering
      vessels includes both bunkering tankers and barges.  This data
      does not include our special purpose vessel, Orion, a 550 dwt tanker,
      which is based in Greece.




4


(8)
            Average
      number of operating bunkering vessels is the number of operating bunkering
      vessels in our fleet for the relevant period, as measured by the sum of
      the number of days each bunkering vessel was used as a part of our fleet
      during the period divided by the cumulative number of calendar days in the
      period multiplied by the number of operating bunkering vessels at the end
      of the period.  This figure does not take into account
      non-operating days due to either scheduled or unscheduled
      maintenance.




(9)
            This figure includes
      our service tanker, Orion, based in
Greece.




(10)
            This
      figure includes our two Panamax tankers, Ouranos and Fos, used as floating
      storage facilities in the United Arab Emirates and Ghana, respectively,
      our Aframax tanker, Leader, used as a floating storage facility in
      Gibraltar, and our tanker, Aegean IX, used as a floating storage facility
      in Jamaica. On November 18, 2009, we signed a memorandum of agreement with
      a third-party purchaser for the sale of the Aegean IX. The vessel was
      delivered on December 18, 2009.




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





B.
            Capitalization
      and Indebtedness




Not
applicable.




C.
            Reasons
      for the Offer and Use of Proceeds




Not
applicable.




D.
            Risk
      Factors




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




Risk
Factors Relating to Our Business




If
the contraction of the global credit markets and the resulting volatility in the
financial markets continues or worsens then 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 depends, in part, on our ability to obtain financing for our existing and
new operations and business lines. Over the last year, global financial markets
have experienced extraordinary volatility following significant contraction,
deleveraging and reduced liquidity in the global credit markets.
  Recently,
a number of major financial institutions have experienced serious financial
difficulties and, in some cases, have entered into bankruptcy proceedings or are
in regulatory enforcement actions. These difficulties may adversely affect the
financial institutions that may provide us with credit to support our working
capital requirements and may impair their ability to continue to perform under
their financing obligations to us, which could negatively impact our ability to
fund current and future obligations. We cannot predict how long the current
market conditions will last. However, these recent and developing economic
factors may have a material adverse effect on our ability to expand our
business.


5


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


·
            increase
      our fleet of bunkering vessels;




·
            identify
      suitable markets for expansion;




·
            consummate
      vessel acquisitions;




·
            integrate
      acquired vessels successfully with our existing
  operations;




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




·
            improve
      our operating and financial systems and
  controls;




·
            maintain
      or improve our credit control
procedures;




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




·
            provide timely service at
      competitive prices; and




·
            attract and retain
      customers.




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




If
further emergency governmental measures are implemented in response to the
economic downturn, that could have a material adverse impact on our results of
operations, financial condition and cash flows




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




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




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




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




6




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




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




·
            the
      ability to effectively integrate and manage acquired
      businesses;




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




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




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




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




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




·
            exposure
      to unknown liabilities.




Our
management may not properly evaluate the risks inherent in any particular
transaction. In the current economic and regulatory climate, it may be
especially difficult to assess the risks involved in a particular transaction,
because we cannot predict what course of action governments and regulatory
agencies will take in response to market volatility and the contracted credit
markets.
  In
addition, future acquisitions could result in the incurrence of substantial
additional indebtedness and other expenses. Future acquisitions may also result
in potentially dilutive issuances of equity securities and may affect the market
price of our common shares. Difficulties encountered with acquisitions may have
a material adverse effect on our business, financial condition and results of
operations.
  Our
failure to successfully integrate Verbeke Bunkering into our operations on a
timely basis could reduce our profitability
  We have
entered into a binding heads of agreement to acquire the bunkering business of
Verbeke Shipping N.V., or Verbeke Bunkering, and expect to complete this
transaction in the beginning of the second quarter of 2010. We expect that the
acquisition of Verbeke Bunkering will result in certain business opportunities
and growth prospects. We, however, may never realize these expected business
opportunities and growth prospects. Our assumptions underlying estimates of the
expected growth of our business and/or the profitability of Verbeke Bunkering
may be inaccurate or general industry and business conditions may deteriorate.
The acquisition of Verbeke Bunkering involves numerous risks, including, but not
limited to:


·
            difficulties
      in assimilating and integrating the operations of Verbeke Bunkering into
      our business;




·
            the
      diversion of our management's attention from other business
      concerns;




·
            our
      current operating and financial systems and controls may be inadequate to
      deal with the combined company's
operations;




·
            the
      risks associated with our entering markets where we have limited
      experience; and




·
            the
      loss of key employees.




If these
factors limit our ability to integrate the operations of Verbeke Bunkering
successfully or on a timely basis, our expectations of future results of
operations may not be met. In addition, our growth and operating strategies for
Verbeke Bunkering's business may be different from the strategies that Verbeke
Bunkering is currently pursuing. If our strategies are not the proper strategies
for Verbeke Bunkering, it could have a material adverse effect on our combined
business, financial condition and result of operations. For further discussion
of acquisition of the acquisition of Verbeke Bunkering, please refer to the
section of this report entitled "Business Overview."




7


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




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




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




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




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




Our fleet
renewal and expansion strategy includes the acquisition of secondhand vessels as
well as newbuildings.  Since December 2007, we have acquired 13
secondhand bunkering vessels, including barges.  Unlike newbuildings,
secondhand vessels typically do not carry warranties with respect to their
condition. Our inspections of secondhand vessels would normally not provide us
with as much knowledge of its condition as we would possess if the vessel had
been built for us and operated by us throughout its life. Repairs and
maintenance costs for secondhand vessels are difficult to predict and may be
more substantial than for vessels we have operated since they were built. These
costs could decrease our profits and reduce our liquidity.




The
market value of our vessels may decrease, which could cause us to incur losses
if we decide to sell them following a decline in their market
values.




The fair
market value of the vessels that we currently own or may acquire in the future
may increase or decrease depending on a number of factors, including general
economic and market conditions affecting the international marine fuel supply
industry, supply and demand for bunkering tankers, costs of newbuildings and
governmental or other regulations.  If we sell any vessel when vessel
prices have fallen and before we have recorded an impairment adjustment to our
financial statements, the sale may be at less than the vessel's carrying amount
on our financial statements, resulting in a loss.  Such loss could
adversely affect our financial condition, results of operations and our ability
to pay dividends to our shareholders.




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




We have
entered into newbuilding contracts for the construction of double hull bunkering
tankers; as of the date of this report, we have 12 vessels remaining to take
delivery. These projects are subject to the risk of delay or defaults by the
shipyards caused by, among other things, quality or engineering problems, work
stoppages, weather interference, unanticipated cost increases, delays in receipt
of necessary equipment, and inability to obtain the requisite permits or
approvals. In accordance with industry practice, in the event the shipyards are
unable or unwilling to deliver the tankers, we may not have effective remedies.
Failure to construct or deliver the ships by the shipyards or any significant
delays could increase our expenses and diminish our net income and cash
flows.




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




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


8




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




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




Our
operations involving the storage of fuel in the United Kingdom are subject to
stringent laws and regulations governing the discharge of materials into the
environment, otherwise relating to protection of the environment, operational
safety and related matters. Compliance with these laws and regulations increases
our overall cost of business in the United Kingdom, including our capital costs
to maintain and upgrade equipment and facilities, or claims for damages to
property or persons resulting from our operations. Failure to comply with these
laws and regulations may result in the assessment of administrative, civil, and
criminal penalties, the imposition of investigatory and remedial liabilities,
and the issuance of injunctions that may restrict or prohibit our United Kingdom
operations or even claims of damages to property or persons resulting from our
United Kingdom operations. The laws and regulations applicable to our United
Kingdom operations are subject to change, and compliance with current and future
laws and regulations may 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.




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




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




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




We extend
trade credit to most of our customers. Our success in attracting business has
been due, in part, to our willingness to extend trade credit on an unsecured
basis to our customers. As of December 31, 2009, 62 of our customers had
outstanding balances with us of at least $1.0 million under the lines of credit
that we have extended to them. Our credit procedures and policies do not fully
eliminate customer credit risk. The recent adverse changes in world credit
markets may cause these numbers to increase if our customers cannot borrow money
and are illiquid. We may not be able to collect on the outstanding balances of
our customers if any of our customers enter bankruptcy proceedings. Losses due
to nonpayment by our customers, if significant, would diminish our financial
position and results of operations.




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




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




9


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. Our insurance policies
that protect us against most of the risks involved in the conduct of our
business may not be adequate and recourse against our suppliers for marine fuel
which fails to meet agreed specifications cannot be assured.  The loss
of customers and increased liabilities would reduce our earnings and could have
a material adverse effect on our business, weaken our financial condition and
reduce our results of operations.




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




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




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




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




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




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




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




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




10


We
generate almost all of our revenues and incur the majority of our expenses in
U.S. dollars. In the year ended December 31, 2009, we incurred not more than 2%
of our operating expenses and general and administrative expenses in currencies
other than the U.S. dollar—primarily the Euro, the British Pound, the UAE
dirham, the Gibraltar pound, the Jamaican dollar and the Singapore dollar.
Changes in the rates of exchange between these currencies and the U.S. dollar
would lead to deviations from our budgeted operating expenses, which would
affect our financial results. When translated into U.S. dollars, expenses
incurred in currencies other than the U.S. dollar increase when the value of the
U.S. dollar falls, which reduces our profitability.




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




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




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




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




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




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




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




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




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




Our
credit facilities contain 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.




11


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 a PFIC, for U.S.
federal income tax purposes. This characterization could result in adverse U.S.
tax consequences to our U.S. shareholders. If we are classified as a PFIC, a
U.S. shareholder of our common stock could be subject to increased U.S. federal
income tax liability upon the sale or other disposition of our common stock or
upon the receipt of amounts treated as "excess distributions." Under these
rules, the excess distribution and any gain upon a sale of our stock would be
allocated ratably over the U.S. shareholder's holding period for the common
stock, 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. In addition, shareholders of a PFIC may not
receive a "step-up" in basis on shares acquired from a decedent. U.S.
shareholders should consult with their own U.S. tax advisors with respect to the
U.S. tax consequences of investing in our common stock as well as the specific
application of the "excess distribution" rule and other rules discussed in this
paragraph. For a discussion of how we might be characterized as a PFIC and
related U.S. federal 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 subsidiaries, including our principal
operating subsidiary, Aegean Marine Petroleum S.A., or AMP, which conduct no
business in Liberia and were 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 subsidiaries 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 subsidiaries will be wholly exempt from Liberian income tax as
under the Prior Law.




If our
Liberian subsidiaries were to be subject to Liberian income tax under the New
Act, they would be subject to tax at a rate of 35% on its worldwide income. As a
result, their, 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 subsidiaries, would be subject to Liberian
withholding tax on dividends paid by our Liberian subsidiaries 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 income, 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, 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.




12


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




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




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




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




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




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




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




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




13


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




Our
principal shareholders, Leveret, a company controlled by Mr. Melisanidis, and
Peter C. Georgiopoulos, the Chairman of our board of directors, currently own
31.8% and 9.0% 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 43.2% 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 31.8% of our outstanding common
shares. For so long as Leveret is controlled by Mr. Melisanidis and owns a
significant percentage of our outstanding common shares, Mr. Melisanidis may be
able to exercise effective control over us and will be able to strongly
influence the outcome of shareholder votes on other matters, including the
adoption or amendment of provisions in our articles of incorporation or bylaws
and approval of possible mergers, amalgamations, control transactions and other
significant corporate transactions. This concentration of ownership may have the
effect of delaying, deferring or preventing a change in control, merger,
amalgamations, consolidation, takeover or other business combination. This
concentration of ownership could also discourage a potential acquirer from
making a tender offer or otherwise attempting to obtain control of us, which
could in turn have an adverse effect on the market price of our common
shares.




Mr.
Melisanidis, through Leveret, may not necessarily act in accordance with the
best interests of other shareholders. Moreover, Mr. Melisanidis and members of
Mr. Melisanidis' family hold significant interest in our related companies. For
further discussion, please refer to the section of this report entitled "Major
Shareholders and Related Party Transactions." The interests of Mr. Melisanidis
may not 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.




14


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




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




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




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




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




·
            both
      a nominating and corporate governance and a compensation committee be
      established and composed entirely of independent directors and each
      committee has a written charter addressing its purpose and
      responsibilities;




·
            an
      annual performance evaluation of the nominating and corporate governance
      and compensation committees be
undertaken;




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




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




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




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




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




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




These
provisions include:




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




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




·
            prohibiting
      cumulative voting in the election of
directors;




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




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




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




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




15


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




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




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




Risk
Factors Relating to Our Industry




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




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




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





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




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




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




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




16


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




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




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




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




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




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




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




17


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




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




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




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




Over the
last year, the stock market has experienced extreme price and volume
fluctuations. This volatility has often been unrelated to the operating
performance of particular companies. The market price of our common shares
fluctuated substantially during 2009, with a high of $28.36 and a low of $11.82.
If the volatility in the market continues or worsens, it could have a further
adverse affect on the market price of our common shares, regardless of our
operating performance.




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




·
            fluctuations
      in interest rates;




·
            fluctuations
      in the availability or the price of
oil;




·
            fluctuations
      in foreign currency exchange rates;




·
            announcements
      by us or our competitors;




·
            changes
      in our relationships with customers or
  suppliers;




·
            changes
      in governmental regulation of the fuel
industry;




·
            changes
      in United States or foreign tax
laws;




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




·
            changes
      in financial estimates or recommendations by securities
      analysts;




·
            changes
      in accounting principles;




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




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




·
            our
      failure to successfully implement our business
  plan.




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




The
market price of our common stock could decline due to sales, or the
announcements of proposed sales, of a large number of common stock in the
market, including sales of common stock 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
stock.




Our amended and restated articles of
incorporation authorize our board of directors to, among other things, issue
additional shares of common or preferred stock or securities convertible or
exchangeable into equity securities, without shareholder approval. We may issue
such additional equity or convertible securities to raise additional capital.
The issuance of any additional shares of common or preferred stock or
convertible securities could be substantially dilutive to our shareholders.
Moreover, to the extent that we issue restricted stock units, stock appreciation
rights, options or warrants to purchase our common shares in the future and
those stock appreciation rights, options or warrants are exercised or as the
non-vested share units vest, our shareholders may experience further dilution.
Holders of shares of our common stock have no preemptive rights that entitle
such holders to purchase their pro rata share of any offering of shares of any
class or series and, therefore, such sales or offerings could result in
increased dilution to our shareholders.




18




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.  On
January 27, 2010, we completed a public offering of an additional 4,491,900
shares of common stock.




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 an
independent physical supplier and marketer of refined marine fuel and
lubricants.  We procure marine fuel from refineries, major oil
producers, and resell to a diversified customer base, representing all segments
of the shipping industry, including tankers, container ships, drybulk carriers,
cruise ships, reefers, LNG/LPG, car carriers, ferries, and marine fuel traders
and brokers.  We serve the following markets: Greece, Gibraltar, the
United Arab Emirates, Jamaica, Singapore, Northern Europe, Portland (U.K.), West
Africa, Vancouver, Montreal, Mexico, Trinidad and Tobago and Morocco. We are one
of the largest owners and operators of bunkering vessels.  As of March
30, 2010, we own a fleet of 42 bunkering vessels, 37 of which are
double-hull.




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




We intend
to continue expanding our business and marine fuel delivery capabilities. In
January 2008 and April 2008, we commenced operations in West Africa and in the
United Kingdom, respectively.  In July 2008, we acquired Canada-based
marketer and physical supplier, ICS Petroleum, with operations in Vancouver,
Montreal, and Mexico, and in June 2009, we commenced our physical operations in
Trinidad and Tobago. In August 2009, we also commenced operations in Tanger-Med,
Morocco. 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 by at least 12 new
double hull bunkering tankers, for which we have firm orders, during the next
year and may purchase additional secondhand vessels in the future.




In
certain markets, we have deployed floating storage facilities which enable us to
maintain more efficient refueling operations, have more reliable access to a
supply of bunker fuel, and deliver a higher quality service to our customers. We
own two double hull Panamax tankers, Fos and Ouranos, with a cargo-carrying
capacity of approximately 68,000 dwt each, which we use as floating storage
facilities in Ghana and the United Arab Emirates, respectively. We also own one
double hull Aframax tanker, Leader, with a cargo-carrying capacity of
approximately 82,000 dwt, which we have positioned in Gibraltar for use as a
floating storage facility and, in January 2010, we entered into a memorandum of
agreement with a third party seller to acquire a second double hull Aframax
tanker, Difko Chaser (to be renamed Aeolos), which we plan to use as a floating
storage facility.  Until the fourth quarter of 2009, we used our
single hull tanker, Aegean IX, as a floating storage facility in
Jamaica.  In November 2009 we entered into an agreement with a third
party purchaser to sell the Aegean IX, which was delivered in December
2009.  In addition, in the United Kingdom, we store our marine fuel in
land-based storage tanks with 40,000 metric tons capacity.




19







We have
also entered into a binding heads of agreement to acquire the bunkering business
of Verbeke Shipping N.V., or Verbeke Bunkering.  Verbeke Bunkering is
a leading physical supplier of marine fuel in the Antwerp-Rotterdam-Amsterdam,
or ARA, region.  Verbeke Bunkering operates a fleet of 18 bunkering
barges, of which nine are double hull, and provides marine fuel delivery
services in port to a diverse group of ship operators as well as marine fuel
traders, brokers and other users.  As a result of this transaction, we
expect to acquire: (i) seven bunkering barges, of which one is double hull; (ii)
a minority ownership interest in one double hull bunkering barge; and (iii) a
10% and a 50% ownership interest in a double hull bunkering barge and a
newbuilding double hull bunkering barge to be delivered, respectively. We plan
to use the one single hull bunkering barge as a floating storage facility and
the remaining vessels in the delivery of marine petroleum
products.  We also expect to assume the charters for nine vessels
currently chartered-in by Verbeke Bunkering. The acquisition of Verbeke
Bunkering is subject to certain closing conditions, including our satisfaction
of the results of legal, accounting, financial and operational due diligence,
agreement on the purchase price, the receipt of required consents and approvals
and the retention of existing trade and business financing. Assuming all closing
conditions are met, we expect the acquisition of Verbeke Bunkering to close in
the beginning of the second quarter of 2010.




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




Our
Service Centers




Greece




We
currently service our customers through our related company, Aegean Oil, in
Piraeus, Patras, and other parts of Greece. Aegean Oil has a license, which we,
as a non-Greek company, are not qualified to obtain, to operate as a physical
supplier of refined marine petroleum products in Greece. We currently operate
nine double hull and one double bottom bunkering tankers in Greece.




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




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




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




Gibraltar




We
possess a license issued by the Bunkering Superintendent of the Port of
Gibraltar to act as a physical supplier of marine petroleum products in
Gibraltar. We currently operate five double hull bunkering tankers in
Gibraltar.




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




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




United
Arab Emirates




We
possess a license issued by Sharjah Economic Development Department to act as a
physical supplier of marine petroleum products in the port area of Fujairah. We
currently operate six double hull bunkering tankers in the UAE. We purchase our
fuel in Fujairah from a variety of different suppliers including FAL Energy Co.
Ltd., which also engages in supply operations in the port, Vitol, and ENOC. We
store our fuel in our floating storage facility, the double hull Panamax tanker,
Ouranos.  We compete here against other physical suppliers, including
ENOC Bunkering (Fujairah) LLC, Akron Trade and Transport, International Supply,
and Oil Marketing & Trading Inc., and Chemoil.




20


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. We operate two double hull tankers and one single hull
bunkering tanker in Jamaica.




In
Jamaica, we have a long-term contract to purchase our fuel from the state
refinery, Petrojam Limited, which also engages in limited supply operations
within the port. Until the fourth quarter of 2009, we used our single hull
tanker, Aegean IX, as a floating storage facility in Jamaica.  In
November 2009, we entered into an agreement with a third party purchaser to sell
the Aegean IX, which was delivered in December 2009.




We
support our bunkering operations from our office in Kingston, which we lease. We
also own real property in Jamaica which we intend to use as a land-based storage
facility.




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. We
operate six double hull bunkering tankers in Singapore.




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




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




Northern
Europe




We
possess a license issued by the Belgian Federal Ministry of Finance to trade and
supply marine petroleum products offshore and in ports. We deliver fuel offshore
and service over 45 ports located throughout Northern Europe, including the
North and Irish Sea, the French Atlantic, the English Channel and St. George
Channel. We operate three double hull bunkering tankers in Northern
Europe.




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




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




West
Africa




We
possess a license from Ghana's National Petroleum Authority to act as a physical
supplier of marine petroleum products both off the coast and in the ports of
Ghana. We commenced physical supply operation in January 2008. We operate two
double hull and two single hull bunkering tankers in West Africa. We are not
aware of any other competing physical suppliers of marine petroleum products in
Ghana.




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




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




21


United
Kingdom




We own a
marine fuel terminal infrastructure located in Portland Harbor. Our terminal is
located near the southern access of the North Sea Sulphur Emission Control Area
(SECA) and provides convenient access for commercial vessels to refuel. We store
our marine fuel in land-based storage tanks, which we lease from Portland Port
Limited. We commenced bunkering and terminal operations in April 2008. We
operate one double hull bunkering tanker in the United Kingdom.




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




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




Vancouver




We trade
and supply marine petroleum products off the coast and in the port of
Vancouver.  We operate one double hull and two single hull bunkering
barges in the port of Vancouver.




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




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




Trinidad
and Tobago




We
possess a license issued by the Republic of Trinidad and Tobago to act as a
physical supplier of marine petroleum products in the Port of Spain in Trinidad
and Tobago. We currently operate two double hull bunkering tankers in Trinidad
and Tobago.




We
purchase our fuel in Trinidad and Tobago from a major supplier, Petrotin. We
compete here against other physical suppliers, including Shell, BP and
Ventrin.




We
support our bunkering operations here from our office in Port of Spain, which we
lease..




Morocco




We
possess a license issued by the Agence Spéciale Tanger-Mediterranée, or the
TMSA, to act as a physical supplier of marine petroleum products off the coast
of Morocco and in the port of Tanger Med. We currently operate three double hull
bunkering tankers in Morocco.




We source
our fuel in Morocco through our service center in Gibraltar.  We were
selected by Horizon Tangiers Terminal S.A., a special purpose consortium, as the
exclusive bunkering company for the new port in Tanger Med.




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




Sales
and Marketing




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




Administrative
Offices




Cyprus




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




22


New
York City




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




Customers




We market
marine fuel and related services to a broad and diversified base of customers.
During the years ended December 31, 2007, 2008, and 2009, none of our customers
accounted for more than 10% of our total revenues.  Our customers
serviced during the past three years, include Greek-owned commercial shipping
companies such as Capital Maritime & Trading Corp., Neptune Line Shipping
and ENESEL S.A., other international shipping companies such as A.P. Moller and
Royal Carribean Cruises Ltd., marine fuel traders and brokers such as World Fuel
Services Corporation and oil majors, such as Exxon Mobil
Corporation.




Suppliers




We
purchase our marine fuel and lubricants from refineries, oil majors or other
select suppliers around the world. In the year ended December 31, 2009, we
purchased marine petroleum products of approximately $267.8 million, or
approximately 12% 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, 2009, were made from unrelated
third-party suppliers and totaled $1,999.2 million, or approximately 88% 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.  Compliance with such laws, regulations and other
requirements entails significant expense, including vessel modification and
implementation of certain operating procedures.





A variety
of government, quasi-governmental and private organizations subject our tankers
to both scheduled and unscheduled inspections.  These organizations
include the local port authorities, national authorities, harbor masters or
equivalent, classification societies, flag state and charterers, particularly
terminal operators and oil companies.  Some of these entities require
us to obtain permits, licenses and certificates and approvals for the operation
of our tankers and marine fuel facilities.  Our failure to maintain
necessary permits, licenses, certificates or approvals could require us to incur
substantial costs or temporarily suspend operation of our marine fuel terminal
or one or more of the vessels in our fleet.





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




23


International
Maritime Organization




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




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





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





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 or
      lubricating oil as cargo, and of 30,000 dwt and above carrying other oils,
      which do comply with the protectively located segregated ballast tank
      requirements
              and
              
              Category 3—oil tankers
      of 5,000 dwt and above but less than the tonnage specified for Category 1
      and 2 tankers.
            
            April
      5, 2005 for ships delivered on April 5, 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-out date in accordance with the above
schedule.  Under regulation 13G, the flag state may allow for some
newer single hull oil tankers registered in its country that conform to certain
technical specifications to continue operating until the earlier of the
anniversary of the date of delivery of the vessel in 2015 or the 25th
anniversary of their delivery.  Under regulations 13G and 13H, as
described below, certain Category 2 and 3 tankers fitted only with double
bottoms or double sides may be allowed by the flag state to continue operations
until their 25th anniversary of delivery.  Any port state, however,
may deny entry of those single hull oil tankers that are allowed to operate
under any of the flag state exemptions.


24


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





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




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




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




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




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




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




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




·
            bitumen,
      tar and their emulsions.




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





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





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





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




25


Air
Emissions




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




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




Safety
Requirements




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




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




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




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




26


Oil Pollution
Liability




Many
countries have ratified and follow the liability plan adopted by the IMO and set
out in the International Convention on Civil Liability for Oil Pollution Damage
of 1969, as amended in 2000, or the CLC. Under this convention and depending on
whether the country in which the damage results is a party to the CLC, a
vessel's registered owner is strictly liable for pollution damage caused in the
territorial waters of a contracting state by discharge of persistent oil,
subject to certain affirmative defenses. The limits on liability outlined in the
1992 Protocol use the International Monetary Fund currency unit of Special
Drawing Rights, or SDR. Under an amendment to the 1992 Protocol that became
effective on November 1, 2003 for vessels of 5,000 to 140,000 gross tons (a unit
of measurement for the total enclosed spaces within a vessel), liability will be
limited to approximately 4.51 million SDR plus 631 SDR for each additional gross
ton over 5,000. For vessels over 140,000 gross tons, liability will be limited
to 89.77 million SDR. The exchange rate between SDRs and U.S. dollars was
0.656046 SDR per U.S. dollar on March 22, 2010. The right to limit liability is
forfeited under the CLC where the spill is caused by the owner's actual fault
and under the 1992 Protocol where the spill is caused by the owner's intentional
or reckless conduct. Vessels trading to states that are parties to these
conventions must provide evidence of insurance covering the liability of the
owner. In jurisdictions where the CLC has not been adopted various legislative
schemes or common law govern, and liability is imposed either on the basis of
fault or in a manner similar to that of the CLC. We believe that our insurance
will cover the liability under the plan adopted by the IMO.




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




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




European
Union Restrictions




The
European Union has adopted legislation that: (1) ban manifestly sub-standard
vessels (defined as those over 15 years old that have been detained by port
authorities at least twice in a six month period) from European waters and
create an obligation of port states to inspect vessels posing a high risk to
maritime safety or the marine environment; and (2) provide the European Union
with greater authority and control over classification societies, including the
ability to seek to suspend or revoke the authority of negligent societies. In
addition, European Union regulations enacted in 2003 now prohibit all single
hull tankers from entering into its ports or offshore terminals.




In
October 2009, the European Union amended a directive to impose criminal
sanctions for illicit ship-source discharges of polluting substances, including
minor discharges, if committed with intent, recklessly or with serious
negligence and the discharges individually or in the aggregate result in
deterioration of the quality of water. Criminal liability for pollution may
result in substantial penalties or fines and increased civil liability
claims.




United
Kingdom




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




27




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.




Greenhouse
Gas Regulation




In
February 2005, the Kyoto Protocol to the United Nations Framework Convention on
Climate Change, or UNFCCC, which we refer to as the Kyoto Protocol, entered into
force. Pursuant to the Kyoto Protocol, adopting countries are required to
implement national programs to reduce emissions of certain gases, generally
referred to as greenhouse gases, which are suspected of contributing to global
warming. Currently, the emissions of greenhouse gases from international
shipping are not subject to the Kyoto Protocol. However, international
negotiations are continuing with respect to a successor to the Kyoto Protocol,
which sets emission reduction targets through 2012, and restrictions on shipping
emissions may be included in any new treaty. In December 2009, more than 27
nations, including the United States and China, signed the Copenhagen Accord,
which includes a non-binding commitment to reduce greenhouse gas emissions. The
European Union has indicated that it intends to propose an expansion of the
existing European Union emissions trading scheme to include emissions of
greenhouse gases from vessels, if such emissions are not regulated through the
IMO or the UNFCCC by December 31, 2010. In addition, the IMO is evaluating
various mandatory measures to reduce greenhouse gas emissions from international
shipping, including market-based instruments.  Any passage of climate
control legislation or other regulatory initiatives by the EU, IMO or other
countries where we operate that restrict emissions of greenhouse gases could
require us to make significant financial expenditures that we cannot predict
with certainty at this time.




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.


28


Inspection
by Classification Societies




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




Risk
of Loss and Insurance Coverage




General




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




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 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. 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.




29


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.




In
November 2005, an unrelated party filed a declaratory action against one of our
subsidiaries before the First Instance Court of Piraeus, Greece. The plaintiff
asserted that he was instrumental in the negotiation of the Company's eight-year
Fuel Purchase Agreement with a government refinery in Jamaica and sought a
judicial affirmation of his alleged contractual right to receive a commission of
$1 per metric ton over the term of the contract. In December 2008, the First
Instance Court of Piraeus dismissed the plaintiff's action. While the
plaintiff's action was pending in Greece, the plaintiff commenced a new action
involving the same cause of action before the Commercial Court of Paris, France,
which dismissed that action in June 2009. The plaintiff's appeal of the
dismissal was denied by the Paris Court of Appeal in February 2010. We do not
believe that the outcome of this lawsuit will have a material effect on the
Company.




In
January 2010, a former director of our Ghanaian subsidiary and a company
controlled by him, commenced an action in Ghana against two of our subsidiaries
for alleged wrongful termination of such director's directorship and deprivation
of an opportunity to hold 70% shares in an oil trading company and 30% shares in
a shipping agency allegedly agreed to be formed by the parties. The plaintiffs
are seeking a payment of approximately $7 million and damages for breach of
trust, extreme mental anguish, pain and suffering, and loss of
earnings.  The Company believes that the plaintiffs's claims are
unwarranted and that the outcome of this litigation will have no material effect
on the Company.




C.           Organizational
Structure




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




30


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




Vessel-owning Subsidiary
            Country of Incorporation
            Vessel
      Name or
              Hull NumberAegean
      Rose Maritime Company
            Greece
            Aegean
      RoseAegean
      Daisy Maritime Company
            Greece
            Aegean
      DaisyClyde
      I Shipping Corp.
            Marshall
      Islands
            Aegean
      TulipAegean
      Tiffany Maritime Company
            Greece
            Aegean
      TiffanyAegean
      Breeze Maritime Company
            Greece
            Aegean
      Breeze IAegean
      X Maritime Inc.
            Marshall
      Islands
            Aegean
      XAegean
      Marine Petroleum LLC1
            United
      Arab Emirates
            Aegean
      FlowerAegean
      Seven Maritime Inc.
            Liberia
            Aegean
      VIICarnaby
      Navigation Inc.
            Liberia
            Aegean
      Pride IBaltic
      Navigation Company
            Marshall
      Islands
            Aegean
      ForceMare
      Vision S.A.
            Marshall
      Islands
            Aegean
      XIMilos
      I Maritime Inc.
            Marshall
      Islands
            HopeSea
      Breezer Marine S.A.
            Marshall
      Islands
            Aegean
      PrincessMilos
      Shipping (Pte.) Ltd.
            Singapore
            MilosVera
      Navigation S.A.
            Liberia
            VeraOuranos
      Tanking S.A.
            Liberia
            OuranosPontos
      Navigation Inc.
            Marshall
      Islands
            LeaderAegean
      Bunkers at Sea NV
            Belgium
            SaraAegean
      Tanking S.A.
            Liberia
            Fos
      IISerifos
      Shipping (Pte.) Ltd.
            Singapore
            SerifosKithnos
      Maritime Inc.
            Marshall
      Islands
            KithnosAmorgos
      Maritime Inc.
            Marshall
      Islands
            AmorgosKimolos
      Shipping (Pte.) Ltd.
            Singapore
            KimolosSyros
      I Maritime Inc.
            Marshall
      Islands
            SyrosMykonos
      I Maritime Inc.
            Marshall
      Islands
            MykonosSantorini
      I Maritime Inc.
            Marshall
      Islands
            SantoriniParos
      Shipping (Pte.) Ltd.
            Singapore
            ParosNaxos
      Shipping (Pte.) Ltd.
            Singapore
            NaxosEton
      Marine Ltd.
            Liberia
            PatmosTasman
      Seaways Inc.
            Liberia
            KalymnosICS
      Petroleum Ltd.
            British
      Columbia (Canada)
            PT36West
      Coast Fuel Transport Ltd.
            British
      Columbia (Canada)
            PT25Aegean
      Maistros Maritime Company
            Greece
            Aegean
      OrionAegean
      Ship III Maritime Company
            Greece
            Aegean
      IIIAegean
      Ship VIII Maritime Company
            Greece
            Aegean
      VIIIAegean
      Ship XII Maritime Company
            Greece
            Aegean
      XIIAegean
      Ace Maritime Company
            Greece
            Aegean
      AcePaxoi
      Marine S.A.
            Liberia
            PaxoiKerkyra
      Marine S.A.
            Liberia
            KerkyraIthaki
      Shipping (Pte) Ltd.
            Singapore
            IthakiCephallonia
      Marine S.A.
            Liberia
            KefaloniaPT22
      Shipping Co. Ltd.
            British
      Columbia (Canada)
            PT22Silver
      Sea Shipping S.A.
            Liberia
            Aegean
      StarAMP
      Maritime S.A.
            Liberia
            Aegean
      ChampionZakynthos
      Marine S.A.
            Liberia
            ZakynthosAndros
      Marine Inc.
            Liberia
            AndrosLefkas
      Shipping (Pte) Ltd.
            Singapore
            LefkasDilos
      Marine Inc.
            Liberia
            DN-3800-12Ios
      Marine Inc.
            Liberia
            DN-3800-13Sifnos
      Marine Inc.
            Liberia
            DN-3800-14Tinos
      Marine Inc.
            Liberia
            DN-3800-15Kythira
      Marine S.A.
            Liberia
            QHS
      217Benmore
      Services S.A.
            Liberia
            QHS
      222Ingram
      Enterprises Co.
            Liberia
            QHS
      223Santon
      Limited
            Liberia
            QHS
      224Kassos
      Navigation S.A.
            Liberia
            QHS
      225Tilos
      Navigation S.A.
            Liberia
            QHS
      226Halki
      Navigation S.A.
            Liberia
            QHS
      227Symi
      Navigation S.A.
            Liberia
            QHS
      228







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


31


D.           Property,
Plant and Equipment




Real
Property




The
following table presents certain information on our leased and owned properties
as of March 30, 2010.  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
            October
      2032Fujairah,
      the United Arab Emirates
            Administrative
      and operations office
            Leased
            December
      2010Khor
      Fakkan, the United Arab Emirates
            Administrative
      and operations office
            Leased
            December
      2010Gibraltar
            Administrative
      and operations office
            Leased
            April
      2040Kingston,
      Jamaica
            Administrative
      and operations office
            Leased
            July
      2011Jamaica
            Land
      storage facility
            OwnedSingapore
            Administrative
      and operations office
            Leased
            September
      2010Antwerp,
      Belgium
            Administrative
      and operations office
            Leased
            October
      2010Edgewater,
      New Jersey
            Sales
      and marketing office
            OwnedNew
      York City, New York
            Administrative
      office
            Leased
            April
      2010Nicosia,
      Cyprus
            Administrative
      office
            Leased
            May
      2010Vancouver,
      Canada
            Administrative
      and operations office
            Leased
            February
      2016Montreal,
      Canada
            Sales
      and marketing office
            Leased
            January
      2012Tema,
      Ghana
            Administrative
      and operations office
            Leased
            December
      2012Port
      of Spain, Trinidad
            Administrative
      and operations office
            Leased
            March
      2012









32




Fleet




The
following table lists our fleet of owned vessels as of March 30,
2010:




Name
            Double Hull
            Flag
            Build
            DwtBunkering
      Tankers:Lefkas
            Yes
            Singapore
            2010
            5,500Andros
            Yes
            Liberia
            2010
            4,600Zakynthos
            Yes
            Liberia
            2010
            6,272Kerkyra
            Yes
            Liberia
            2009
            6,290Paxoi
            Yes
            Liberia
            2009
            6,310Kalymnos
            Yes
            Liberia
            2009
            6,283Kefalonia
            Yes
            Liberia
            2009
            6,272Ithaki
            Yes
            Singapore
            2009
            6,272Syros
            Yes
            Liberia
            2008
            4,596Patmos
            Yes
            Liberia
            2008
            6,262Naxos
            Yes
            Singapore
            2009
            4,626Paros
            Yes
            Singapore
            2008
            4,629Mykonos
            Yes
            Liberia
            2008
            4,626Santorini
            Yes
            Liberia
            2008
            4,629Kimolos
            Yes
            Singapore
            2008
            4,664Kithnos
            Yes
            Liberia
            2007
            4,626Amorgos
            Yes
            Liberia
            2007
            4,664Serifos
            Yes
            Singapore
            2007
            4,664Milos
            Yes
            Singapore
            2007
            4,626Aegean
      Tiffany
            Yes
            Greece
            2004
            2,747Aegean
      Breeze I
            Yes
            Greece
            2004
            2,747Aegean
      Flower
            Yes
            United
      Arab Emirates
            2001
            6,523Aegean
      Tulip
            Yes
            Liberia
            1993
            4,853Aegean
      Ace
            Yes
            Greece
            1992
            1,615Aegean
      Princess
            Yes
            Liberia
            1991
            7,030Aegean
      Champion
            Yes
            Liberia
            1991
            23,400Sara
            Yes
            Malta
            1990
            7,389Aegean
      III
            Yes
            Greece
            1990
            2,973Aegean
      VIII
            Yes
            Greece
            1990
            2,973Aegean
      Rose
            Yes
            Greece
            1988
            4,935Aegean
      Daisy
            Yes
            Greece
            1988
            4,935Vera
            No
            Liberia
            1985
            3,720Aegean
      VII
            No
            Liberia
            1984
            3,892Aegean
      XI
            Yes
            Liberia
            1984
            11,050Aegean
      X
            Yes
            Panama
            1982
            6,400Aegean
      Pride I
            Yes
            Liberia
            1982
            11,538Aegean
      Force
            Yes
            Liberia
            1980
            6,679Hope
            Yes
            Liberia
            1980
            10,597Aegean
      Star
            Yes
            Liberia
            1980
            11,520Aegean
      XII
            No
            Greece
            1979
            3,680





Bunkering
      BargesPT22
            Yes
            Canada
            2001
            2,315PT36
            No
            Canada
            1980
            3,730PT25
            No
            Canada
            1988
            2,560





Floating
      Storage FacilitiesMediterranean
            Yes
            Greek
            1982
            20,000Aeolos
            Yes
            Liberia
            1990
            84,040Leader
            Yes
            Panama
            1985
            83,890Ouranos
            Yes
            Liberia
            1983
            67,980Fos
      II
            Yes
            Liberia
            1981
            67,980





Special
      Purpose VesselOrion
            No
            Greek
            1991
            550





33




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




We intend
to expand our business and marine fuel delivery capability. In furtherance of
this objective, we have entered into newbuilding contracts with two shipyards
located in China for the construction of new double hull bunkering tankers; we
have 12 remaining vessels for delivery in the year. 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
12 newbuildings that we have under contract, we expect to have 55 double hull
vessels in our operating fleet of bunkering tankers.




The
following table presents certain information concerning 12 bunkering tankers
that we have contracted to build as of March 30, 2010.




Hull Number
            Hull Type
            Expected Delivery
            Dwt
            ShipyardBunkering
      Tankers Under Contracts:DN-3800-12
            Double
      Hull
            Q2
      2010
            4,600
            FujianDN-3800-13
            Double
      Hull
            Q2
      2010
            4,600
            FujianDN-3800-14
            Double
      Hull
            Q2
      2010
            4,600
            FujianDN-3800-15
            Double
      Hull
            Q2
      2010
            4,600
            FujianQHS
      217
            Double
      Hull
            Q2
      2010
            5,500
            HyundaiQHS
      222
            Double
      Hull
            Q2
      2010
            5,500
            HyundaiQHS
      223
            Double
      Hull
            Q2
      2010
            5,500
            HyundaiQHS
      224
            Double
      Hull
            Q2
      2010
            5,500
            HyundaiQHS
      225
            Double
      Hull
            Q2
      2010
            5,500
            HyundaiQHS
      226
            Double
      Hull
            Q2
      2010
            5,500
            HyundaiQHS
      227
            Double
      Hull
            Q3
      2010
            5,500
            HyundaiQHS
      228
            Double
      Hull
            Q3
      2010
            5,500
            Hyundai






34


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 section entitled "Risk Factors" and elsewhere in this
report.




A.      Operating
Results




General




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




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




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




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




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




35


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




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




For
      the Year Ended
              December
      31, 2005
            
            2006
            
            2007
            
            2008
            
            2009 (in
      thousands of U.S. dollars, unless otherwise stated)


Sales
      of marine petroleum products
              
              505,605
              
              
              790,657
              
              
              1,345,849
              
              
              2,768,067
              
              
              2,449,445Less:
      Cost of marine petroleum products sold
              
              464,801
              
              
              728,637
              
              
              1,251,712
              
              
              2,594,443
              
              
              2,266,960Less:
      Cargo transportation costs
              
              -
              
              
              -
              
              
              4,466
              
              
              12,661
              
              
              5,987Gross
      spread on marine petroleum products
              
              40,804
              
              
              62,020
              
              
              89,671
              
              
              160,963
              
              
              176,498Less:
      Gross spread on lubricants
              
              264
              
              
              455
              
              
              536
              
              
              1,298
              
              
              2,755Gross
      spread on marine fuel
              
              40,540
              
              
              61,565
              
              
              89,135
              
              
              159,665
              
              
              173,743Sales
      volume of marine fuel (metric tons)
              
              1,746,377
              
              
              2,367,289
              
              
              3,437,269
              
              
              5,200,256
              
              
              6,192,755Gross
      spread per metric ton of marine fuel sold (U.S. dollars)
              
              23.2
              
              
              26.0
              
              
              25.9
              
              
              30.7
              
              
              28.1






36





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




For
      the Year Ended
              December
      31, 2005
            
            2006
            
            2007
            
            2008
            
            2009




(in
      thousands of U.S. dollars) Gross
      spread on marine petroleum products
              
              
              40,804
              
              
              
              62,020
              
              
              
              89,671
              
              
              
              160,963
              
              
              
              176,498Add:
      Voyage revenues
              
              
              10,450
              
              
              
              11,639
              
              
              
              5,758
              
              
              
              1,379
              
              
              
              9,044Add:
      Other revenues
              
              
              1,275
              
              
              
              1,516
              
              
              
              1,266
              
              
              
              8,526
              
              
              
              12,471Add:
      Gain on sale of vessel
              
              
              -
              
              
              
              -
              
              
              
              2,693
              
              
              
              -
              
              
              
              4,094Add:
      Cargo transportation costs
              
              
              -
              
              
              
              -
              
              
              
              4,466
              
              
              
              12,661
              
              
              
              5,987Less:
      Salaries, wages and related costs
              
              
              (8,958
              )
              
              
              (12,871
              )
              
              
              (24,363
              )
              
              
              (41,666
              )
              
              
              (47,708
              )Less:
      Vessel hire charges
              
              
              (518
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Less:
      Depreciation
              
              
              (2,226
              )
              
              
              (4,240
              )
              
              
              (6,373
              )
              
              
              (12,604
              )
              
              
              (16,792
              )Less:
      Amortization
              
              
              (636
              )
              
              
              (1,684
              )
              
              
              (3,224
              )
              
              
              (3,953
              )
              
              
              (4,886
              )Less:
      Management fees
              
              
              (182
              )
              
              
              (223
              )
              
              
              (54
              )
              
              
              -
              
              
              
              -Less:
      Other operating expenses
              
              
              (16,629
              )
              
              
              (25,697
              )
              
              
              (39,042
              )
              
              
              (73,157
              )
              
              
              (79,492
              )Operating
      income
              
              
              23,380
              
              
              
              30,460
              
              
              
              30,798
              
              
              
              52,149
              
              
              
              59,216





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




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




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




EBITDArepresents net income before interest, taxes, depreciation and
      amortization. EBITDA does not represent and should not be considered as an
      alternative to net income, operating income or any other indicator of the
      Company's performance, as determined by U.S. GAAP, and our calculation of
      EBITDA may not be comparable to that reported by other companies. EBITDA
      is included herein because it is a basis upon which we assess our
      performance and because we believe that it presents useful information to
      investors regarding Company's ability to service and/or incur
      indebtedness. The following table reconciles net income to EBITDA for the
      periods presented:




37







For
      the Year Ended
              December
      31, 2005
            
            2006
            
            2007
            
            2008
            
            2009 (in
      thousands of U.S. dollars) Net
      income
              
              
              21,475
              
              
              
              24,225
              
              
              
              27,738
              
              
              
              39,915
              
              
              
              48,525Add:
      Net financing cost
              
              
              2,277
              
              
              
              4,231
              
              
              
              1,483
              
              
              
              11,876
              
              
              
              10,209Add:
      Income taxes
              
              
              24
              
              
              
              2
              
              
              
              8
              
              
              
              1,879
              
              
              
              153Add:
      Depreciation and amortization
              
              
              2,862
              
              
              
              5,924
              
              
              
              9,597
              
              
              
              16,557
              
              
              
              21,678EBITDA
              
              
              26,638
              
              
              
              34,382
              
              
              
              38,826
              
              
              
              70,227
              
              
              
              80,565




·
            Number of
      markets served.The number of markets served includes
      our operations at our service centers in the United Arab Emirates,
      Gibraltar, Jamaica, Singapore, Northern Europe, West Africa,
      Vancouver,  Portland (U.K.), Trinidad and Tobago (Southern
      Caribbean), Tangiers (Morocco) and Greece, where we conduct operations
      through our related company, Aegean Oil, as well as our trading operations
      in Montreal and Mexico. The number of markets served is an indicator of
      the geographical distribution of our operations and affects both the
      amount of revenues and expenses that we record during a given period. We
      commenced physical supply operations in Singapore on June 2, 2006, in
      Northern Europe on October 9, 2007, in Ghana on January 15, 2008, in
      Portland (U.K.) on April 1, 2008, in Canada and Mexico on July 1, 2008, in
      Trinidad and Tobago on April 1, 2009 and in Tangiers, Morocco on August
      25, 2009.




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




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




Year
      Ended December 31,2007
            
            2008
            
            2009(in
      thousands of U.S. dollars, unless otherwise stated)Sales
      volume of marine fuel (metric tons)
            
            3,437,269
            
            5,200,256
            
            6,192,755Gross
      spread on marine petroleum products
            
            89,671
            
            160,963
            
            176,498Gross
      spread per metric ton of marine fuel sold (U.S. dollars)
            
            25.9
            
            30.7
            
            28.1Number
      of markets served, end of period
            
            6.0
            
            11.0
            
            14.0Average
      number of operating bunkering vessels
            
            13.5
            
            22.7
            
            33.7





38




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




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




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




·
            our
      entrance into new markets;




·
            our
      purchasing methods of marine petroleum
products;




·
            our
      marketing strategy;




·
            our
      vessel acquisitions and disposals;




·
            PLATTS
      prices;




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




·
            regulation
      of the marine fuel supply industry;




·
            regulation
      of the tanker industry;




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




·
            levels
      of competition; and




·
            other
      factors affecting our industry.




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, 2007, 2008 and 2009, 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 may act as a
broker, generally in locations where we do not have service centers. This
business involves activities whereby we contract with third-party physical
suppliers to sell us marine fuel and to deliver the marine fuel to a customer in
the relevant location. Accordingly, our trading activities do not involve our
physical possession of marine fuel and require less complex logistical
operations and infrastructure. As such, we typically earn a significantly lower
gross spread from our trading activities than from our physical supply
activities.




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




39


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




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, 2007
            
            2008
            
            2009 (in
      thousands of U.S. dollars) Third-party
      suppliers
              
              
              1,091,769
              
              
              
              2,242,911
              
              
              
              1,999,193Related
      company suppliers
              
              
              159,943
              
              
              
              351,532
              
              
              
              267,767Total
              
              
              1,251,712
              
              
              
              2,594,443
              
              
              
              2,266,960





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




Voyage
Revenues




Our
voyage revenues are derived from the employment of our specialty tanker with
roll-on roll-off facilities and refueling capabilities for fuel trucks and from
the employment of our bunkering tankers based in Greece.  In 2009, we
employed our specialty tanker, Maistros, under a contract of affreightment with
Aegean Oil for the distribution of gasoline and other refined petroleum products
in the Greek islands. During the year ended December 31, 2009, we recognized
$2.1 million revenue from Aegean Oil under this contract of
affreightment.  On June 10, 2009, we sold the specialty tanker,
Maistros, to an unaffiliated third-party purchaser and terminated this contract
of affreightment.  Additionally, in 2009 we have employed our vessels
Aegean III, Aegean VIII, Aegean XII, Aegean Daisy, Aegean Rose, Aegean Breeze
and Aegean Tiffany under a contract with an unaffiliated third party for the
distribution of refined marine petroleum products in Greek ports. During the
year ended December 31, 2009, we recognized $6.9 million revenue under this
contract.




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. On April 17, 2007,
we sold Aegean Hellas to an unrelated third party.




40


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
located and 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.




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




Year
      Ended December 31, 2007
            
            2008
            
            2009 (in
      thousands of U.S. dollars) Shipboard
      personnel
              
              
              11,509
              
              
              
              21,017
              
              
              
              23,546Shoreside
      personnel
              
              
              12,854
              
              
              
              20,649
              
              
              
              24,162Total
              
              
              24,363
              
              
              
              41,666
              
              
              
              47,708




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




Depreciation




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




Other
Operating Expenses




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




Other
operating expenses also include expenses relating to rent, communal charges,
advertising, travel, public relations and auditing and legal fees. We expect
these expenses to increase further as we enter new markets.




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




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




41




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 strategic, technical and commercial
management services in connection with the deployment of our bunkering tankers
and Aframax tankers. On April 17, 2007, we sold the last vessel managed by
Aegean Shipping, Aegean Hellas. We believe the amounts we paid to our related
company manager were comparable to amounts that we would have negotiated in
arm's-length transactions with unaffiliated third parties.




Interest
and Finance Costs




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




We
believe that, in the short-term, a majority of 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, AMP 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 because AMP is considered a non-resident domestic corporation. 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 margin applies are deducted from
gross income for Greek corporate income tax purposes. Accordingly, under Greek
Law 3427/2005, as currently applied to us, we expect that AMP will continue to
have no liability for any material amount of Greek income tax.





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




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




Our
business is affected by taxes imposed on the purchase and sale of marine
petroleum products in various jurisdictions in which we operate from time to
time. These taxes include income, sales, excise, goods and services taxes,
value-added taxes, and other taxes. Other than in Canada, we do not pay a
material amount of tax in any jurisdiction in which we operate.  For
the years ended December 31, 2009, 2008 and 2007, our income tax amounted to
$0.2 million, $1.9 million and $8,000, respectively.  The income tax
amounts in 2008 and 2009 were mainly attributable to our Canadian
operations.




42




Results
of Operations




Year
ended December 31, 2009, compared to the year ended December 31,
2008




Sales of Marine Petroleum
Products.  Sales of marine petroleum products decreased by
$318.7 million, or 11.5%, to $2,449.4 million for the year ended December 31,
2009, compared to $2,768.1 million for the year ended December 31, 2008. Of the
total decrease in sales of marine petroleum products, $724.3 million was
attributable to a 26.3% decrease in the average price of marine fuel (using
sales volumes for the year ended December 31, 2008), $387.0 million was
attributable to an increase in sales volume of marine fuel (using average prices
for the year ended December 31, 2009), and $18.6 million was attributable to an
increase in the sales of lubricants. Sales volume of marine fuel increased by
992,499 metric tons, or 19.1%, to 6,192,755 metric tons for the year ended
December 31, 2009, compared to 5,200,256 metric tons for the year ended December
31, 2008 due to additional volume of sales of marine fuel in the United Arab
Emirates, Singapore and Canada and due to sales in our new markets, Trinidad and
Tobago and Tanger-Med, Morocco.




Gross Spread on Marine Petroleum
Products.  Gross spread on marine petroleum products increased
by $15.5 million, or 9.6%, to $176.5 million for the year ended December 31,
2009, compared to $161.0 million for the year ended December 31, 2008. The
increase in our gross spread on marine petroleum products mainly resulted from
the increased sales volume of marine fuel. Our gross spread per metric ton of
marine fuel sold during the year ended December 31, 2009 decreased by $2.6, or
8.5%, to $28.1 compared to $30.7 for the year ended December 31,
2008.  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,
increased from 5.8% for the year ended December 31, 2008 to 7.1% for the year
ended December 31, 2009.  Gross spread on marine petroleum products
and gross spread per metric ton of marine fuel sold are non-GAAP measures and
should not be considered as alternatives to operating income, net income or
other GAAP measures and may not be comparable to similarly titled measures of
other companies. Please refer to the section entitled "Factors Affecting Our
Results of Operations" for a reconciliation of gross spread on marine petroleum
products to the most directly comparable GAAP measure.




Voyage
Revenues.  Voyage revenues increased by $7.7 million, or
550.0%, to $9.1 million for the year ended December 31, 2009, compared to $1.4
million for the year ended December 31, 2008. Voyage revenues for the year ended
December 31, 2009 were attributable to the employment of our specialty tanker,
Maistros, under the contract of affreightment with Aegean Oil, which commenced
on October 1, 2008, and from the employment of seven of our bunkering tankers
with an unaffiliated third party for the distribution of refined marine
petroleum products in Greek ports. Voyage revenues for the year ended December
31, 2008, were attributable to the employment of our specialty tanker,
Maistros.




Salaries, Wages and Related
Costs.  Salaries, wages and related costs increased by $6.0
million, or 14.4%, to $47.7 million for the year ended December 31, 2009,
compared to $41.7 million for the year ended December 31, 2008. This increase
was mainly due to an increase in the number of full-time employees as we hired
new employees to manage our expanded fleet and service center network.
Furthermore, crew costs increased as the average number of operating bunkering
vessels increased to 33.7 for the year ended December 31, 2009, compared to 22.7
for the year ended December 31, 2008.




Depreciation.   Depreciation
increased by $4.2 million, or 33.3%, to $16.8 million for the year ended
December 31, 2009, compared to $12.6 million for the year ended December 31,
2008. This increase is in line with the 48.5% increase in the average number of
operating bunkering vessels.




Other Operating
Expenses. Other operating expenses increased by $6.3 million, or
8.6%, to $79.5 million for the year ended December 31, 2009, compared to $73.2
million for the year ended December 31, 2008. This increase in other operating
expenses was primarily attributable to the higher cost on marine fuel
consumption and to the increased overhead costs.




Interest and Finance
Costs.  Interest and finance costs decreased by $2.1 million,
or 16.9% to $10.3 million for the year ended December 31, 2009, compared to
$12.4 million for the year ended December 31, 2008. The decrease in interest and
finance costs was mainly attributable to the decrease in the interest
rates.


43


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





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




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




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




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




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




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




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


44


Inflation




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




Critical
Accounting Policies




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




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




Trade
Receivables and Allowance for Doubtful Accounts




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




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




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.




45




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




An
increase in the estimated useful life of a tanker or in its estimated residual
value would have the effect of decreasing the annual depreciation charge and
extending it into later periods. A decrease in the estimated useful life of a
tanker or in its estimated residual value would have the effect of increasing
the annual depreciation charge. A 20% decrease in the remaining estimated useful
lives of our vessels would increase our depreciation charge for the year ended
December 31, 2009 by $4.1million.




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




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




Impairment
of Long-lived Assets




We
evaluate the carrying amounts of our long-lived assets to determine if events
have occurred which would require modification to their carrying values. In
evaluating useful lives and carrying values of long-lived assets, we review
certain indicators of potential impairment, such as vessel sale and purchase
prices in the marketplace, business plans and overall market conditions. If an
indicator of impairment exists, we determine undiscounted projected net
operating cash flow for each vessel or group of vessels and compare it to the
relevant carrying value. In developing estimates of future cash flows, the
Company relied upon estimates made by management with regard to the Company's
vessels, including future deliveries, operating expenses, and the estimated
remaining useful lives of the vessels.  These assumptions are based on
historical trends as well as future expectations and are consistent with the
plans and forecasts used by management to conduct its business.  The
variability of these factors depends on a number of conditions, including
uncertainty about future events and general economic conditions; therefore, the
Company's accounting estimates might change from period to period. 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.




The fair
market value of the vessels that we currently own or may acquire in the future
may increase or decrease depending on a number of factors, including general
economic and market conditions affecting the international marine fuel supply
industry, supply and demand for bunkering tankers, costs of newbuildings and
governmental or other regulations.  If we sell any vessel when vessel
prices have fallen and before we have recorded an impairment adjustment to our
financial statements, the sale may be at less than the vessel's carrying amount
on our financial statements, resulting in a loss.  Such loss could
adversely affect our financial condition, results of operations and our ability
to pay dividends to our shareholders.




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.




46




Average Number of
      Vessels
              Drydock
      costsYear Ended December
31,
              Bunkering
              Non-bunkering
              As Reported
              As
      Incurred(in
      thousands of U.S. dollars)2007
              13.5
              1.7
              3,172
              3,1862008
              22.7
              4.8
              3,640
              6,8902009
              33.7
              5.4
              4,574
              5,504





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




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




Our
estimates of the frequency of required drydocking of our vessels have not
changes in the past periods.  We do not expect these estimates to
change in the future because we believe they will continue to accurately
represent the frequency of drydocking inspections necessary for the maintenance
of our vessels.




B.           Liquidity
and capital resources




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




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




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




47




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 from banks, 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, 2009, we believe that
we were in compliance in all material respects with all covenants of our credit
facilities. We also believe that our working capital resources are sufficient
for our present requirements.




Credit
Facilities




As of December 31, 2008 and 2009,
we had the following outstanding loans:




Loan
                Date
                
                2008
                
                
                2009(in
      millions of U.S. dollars)2009
      senior secured credit facility
                March
      16, 2009
                
                
                -
                
                
                
                152.02008
      senior secured credit facility
                September
      30, 2008
                
                
                90.0
                
                
                
                -Secured
      term loan with respect to three vessels
                July
      8, 2008
                
                
                14.5
                
                
                
                12.6Secured
      term loan with respect to four new buildings
                April
      24, 2008
                
                
                15.1
                
                
                
                25.3Revolving
      overdraft credit facility
                March
      11, 2008
                
                
                -
                
                
                
                -Senior
      secured revolving credit facility
                September
      17, 2009
                
                
                -
                
                
                
                50.0Trade
      Credit facility
                November
      19, 2009
                
                
                -
                
                
                
                -Secured
      syndicated term loan facility with respect to five
      newbuildings
                July
      5, 2007
                
                
                6.6
                
                
                
                19.8Secured
      syndicated term loan facility with respect to seven
      newbuildings
                October
      30, 2006
                
                
                28.0
                
                
                
                48.9Secured
      term loan facility with respect to two newbuildings
                October
      27, 2006
                
                
                7.9
                
                
                
                13.8Secured
      term loan facility with respect to three newbuildings
                October
      25, 2006
                
                
                14.2
                
                
                
                18.4Secured
      term loan facility under the 2006 senior secured credit facility with
      respect to five newbuildings
                December
      19, 2006
                
                
                31.0
                
                
                
                28.2Secured
      syndicated term loan facility with respect to two
    newbuildings
                October
      26, 2005
                
                
                16.0
                
                
                
                -Secured
      syndicated term loan facility with respect to five
      newbuildings
                August
      30, 2005
                
                
                30.3
                
                
                
                32.1253.6
                
                
                
                401.1


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




Senior secured credit
facilities.





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


48


2008 senior secured credit
facility.  On September 30, 2008, AMP entered into a senior
secured syndicated revolver, guarantee and letter of credit facility with
international commercial lenders for an amount of up to $1.0 billion, for
working capital and general corporate purposes, or our 2008 senior secured
credit facility.  Our 2008 senior secured credit facility replaced our
2007 senior secured credit facility discussed below.  Our 2008 senior
secured credit facility had a committed amount of up to $420.0 million,
consisting of a guarantee and/or letter of credit line in an amount of up to
$310.0 million and a cash advance limit in an amount of up to $320.0 million.
The borrowings under our 2008 senior secured credit facility bore interest at a
rate of LIBOR plus a margin of 1.50%.  Documentary and standby letters
of credit were subject to commissions of 0.35% and 0.75%, respectively. We
replaced our 2008 senior secured credit facility with our senior secured credit
facility discussed above.





Our
senior secured credit facility is, and our 2008 senior secured credit facility
was, secured by, among other things:




·
            a
      first priority mortgage on 11 of our double hull bunkering tankers and our
      three floating storage facilities, or our mortgaged
    vessels;




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




·
            a
      charge over AMP's operating
account;




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




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




·
            a
      floating charge on our inventories;
and




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




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




·
            maintain
      our listing at the New York Stock
Exchange;




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




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




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




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




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




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




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




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




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




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




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




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




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




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




As of
December 31, 2008 and December 31, 2009, we had $90.0 million and $152.0 million
outstanding under our senior secured credit facilities,
respectively.




49


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




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




As of
December 31, 2008 and December 31, 2009, we had $31.0 million and $28.2 million
outstanding under our 2006 senior secured credit facility.




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




The loan
is collateralized by:




·
            a
      first priority mortgage over each of the
  vessels;




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




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




·
            our
      corporate guarantee.




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




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




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




·
            the
      ratio of total liabilities to total assets shall not exceed
      0.65:1.




As of
December 31, 2008 and December 31, 2009, the outstanding balance of the loan was
$14.5 million and $12.6 million, respectively.




50


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




The loan
is collateralized by:




·
            a
      first priority mortgage over each of the
  vessels;




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




·
            our
      corporate guarantee.




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




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




·
            the
      ratio of total liabilities to total assets shall not exceed
      0.65:1;




·
            the
      current ratio shall not be less than 1.25:1;
and




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




As of
December 31, 2008 and December 31, 2009, the outstanding balance of the loan was
$15.1 million and $25.3 million, respectively.




Revolving overdraft credit
facility.  On March 11, 2008, we entered into a one year,
annually-renewable revolving overdraft facility with a local bank in an amount
of $20.0 million. On March 1, 2010, the facility was renewed for a period ending
March 15, 2011 and amended to increase the amount to $30.0 million. The renewed
facility bears interest at LIBOR plus 2.50% for the first $10.0 million borrowed
and LIBOR plus $3.50% for additional amounts outstanding.  The
facility is secured, among other things, by a first priority mortgage over the
vessels, Vera, Sara, Hope, Aegean Ace, Aegean Star and Aegean
Champion.  Furthermore, the credit facility contains financial
covenants requiring us, among other things, to ensure that:





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




·
            our
      ratio of total liabilities to total assets shall not exceed 0.65:1;
      and




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




As of
December 31, 2008 and December 31, 2009, we had no amounts outstanding under
this facility.




Senior secured revolving credit
facility:On September 17, 2009, we entered into an annually renewable
senior secured revolving credit facility with a local bank in an amount of $50.0
million. The facility is secured by, among other things, our receivables and
corporate guarantee, and bears interest at LIBOR plus 2.50%. The credit facility
contains certain covenants and undertakings that require, among other things,
that:





·
            we
      maintain our listing on the New York Stock
  Exchange;





·
            the
      net equity base will not be less than $175.0
  million;





·
            our  interest
      coverage ratio will not be less than
1.3:1;





·
            our
      total liabilities to total assets will not exceed
  65%;





·
            we
      maintain additional free liquidity of $25.0 million at the end of each
      calendar month; and





·
            we
      maintain an average minimum daily free liquidity of $10.0
      million.





As of
December 31, 2009, we had $50.0 million outstanding under this
facility.




51


Trade Credit Facility:On
November 19, 2009, our subsidiary, AMP, entered into an uncommitted trade credit
facility, which we refer to as the 2009 New Trade Credit Facility, with an
international commercial lender. The 2009 New Trade Credit Facility is in an
amount of $100.0 million, with a sub-limit in an amount of $20.0 million for a
short-term transit and storage financing. The 2009 New Trade Credit Facility has
a one-year term. The availability of any letters of credit, overdrafts or cash
advances under the 2009 New Trade Credit Facility is subject to the lender's
discretion. The facility will bear interest at a rate of the lender's cost of
funds plus 2.0% for overdrafts. The facility is guaranteed by us and is secured
by, among other things, our assigned receivables and fuel oil and gas oil stored
or to be stored in a storage facility acceptable to the lender and pledged in
its favor. Under the 2009 New Trade Credit Facility the maximum credit terms
given to any individual counterparty will be 45 days from the delivery of the
products; the inventories will only be financed up to 30 days from the date such
inventories are delivered to the storage facility; and the product to be stored
and in transit will be financed up to ten calendar days from the date of the
bill of lading. The 2009 New Trade Credit Facility contains covenants requiring,
among other things, that:




·
            the
      minimum total net equity of AMP is at least $80.0
  million;





·
            we
      maintain our listing on the New York Stock
  Exchange;





·
            our
      minimum net equity will not be less than $180.0 million;
    and





·
            our
      minimum current ratio will be 1.15 with a minimum working capital need of
      $50.0 million.





As of
December 31, 2009, we had no amounts outstanding under this
facility.





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




The loan
is collateralized by:




·
            a
      first priority mortgage over each of the
  vessels;




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




·
            our
      corporate guarantee.




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




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




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




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




Furthermore,
we are required to maintain the listing of our shares on the New York Stock
Exchange.




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




·
            the
      minimum value of the collateral;




·
            incurrence
      of debt; and




·
            payment
      of dividends.




52


The
facility, as amended, is available in five tranches of $8.6 million each. Each
tranche is repayable in 40 consecutive quarterly installments in the amount of
$216,000 each. The first installment of each tranche is repayable three months
after the date of drawdown of the final advance.  As of December 31,
2008 and December 31, 2009, the outstanding balance under this loan was $6.6
million and $19.8 million, respectively.




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




The loan
is collateralized by:




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




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




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




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




·
            the
      payment of dividends and the distribution of
  assets;




·
            the
      incurrence of debt;




·
            mergers
      and consolidations;




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




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




The
facility is available in seven tranches of $9.25 million each. Each tranche is
repayable in 40 quarterly installments in the amount of $125,000 each, plus a
balloon payment of $4.25 million payable together with the last
installment. The first installment of each tranche is repayable three months
after the date of drawdown of the respective delivery advance.  As of
December 31, 2008 and December 31, 2009, the balance on the loan was $28.0
million and $48.9 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;




53


·
            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, 2008 and
December 31, 2009, the balance on the loan was $7.9 million and $13.8 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 ASI as the holding company of the
      vessel-owning subsidiaries;




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




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




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




·
            the
      payment of dividends and the distribution of
  assets;




·
            the
      incurrence of debt;




·
            mergers
      and consolidations;




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




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




The
facility is available in three tranches of $8.75 million each. Each tranche is
repayable in 40 quarterly installments in the amount of $125,000 each, plus a
balloon payment of $3.75 million payable together with the last installment. The
first installment of each tranche is repayable three months after the date of
drawdown of the respective delivery advance.  As of December 31, 2008
and December 31, 2009, the balance on the loan was $14.2 million and $18.4
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.




54


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, 2008 and December 31,
2009, no amounts were outstanding under this credit facility, as it was replaced
with the newbuilding facility of our 2006 senior secured credit facility,
discussed above.




As of
December 31, 2008 and December 31, 2009, we had $31.0 million and $28.2 million
outstanding under our 2006 senior secured credit facility.




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




The loan
is collateralized by:




·
            a
      first priority mortgage over each of the
  vessels;




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




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




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




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




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




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




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




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




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




·
            the
      minimum value of the collateral;




·
            incurrence
      of debt; and




·
            payment
      of dividends.




55


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, 2008, the balance on the loan was $16.0 million (Euro 11.5
million), and on June 17, 2009, the then-outstanding balance under this facility
was fully repaid with the proceeds of the sale of the vessels.




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, 2008, the balance on this secured letter of credit facility was
$3.8 million, and on February 24, 2009, the secured letter of credit
facility was terminated with the proceeds of the sale of the
vessels.




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




The loan
is collateralized by:




·
            a
      first priority mortgage over each of the
  vessels;




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




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




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




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




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




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




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




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




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




·
            the
      minimum value of the collateral;




·
            incurrence
      of debt; and




·
            payment
      of dividends.




56


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, 2008
and December 31, 2009, the balance on the loan was $30.3 million and $32.1
million, respectively.




Liquidity
and Uses of Cash




Cash and
cash equivalents, as of December 31, 2008 and 2009 amounted to $46.9 million and
$54.8 million, respectively. The table below illustrates our working capital and
working capital excluding cash and debt as of December 31, 2008 and 2009.
Working capital is defined as current assets less current
liabilities.




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




As
      of December 31,2008
            
            2009(in
      thousands of U.S. dollars)Working
      capital
            49,365
            
            218,488Working
      capital excluding cash and debt
            100,158
            
            221,794





During
the year ended December 31, 2009, our working capital, excluding cash,
restricted cash and debt, increased to $221.8 million as compared to $100.2
million as of December 31, 2008.  At the same time, our working
capital, defined as current assets minus current liabilities, position as of
December 31, 2009 increased to $218.5 million from $49.4 million a year
ago.  These increases were primarily attributable to an increase in
the price of marine petroleum products during the last quarter of 2009 compared
to the same period of 2008.




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






We also
use our cash to fund the acquisition or construction costs of vessels as well as
to fund the maintenance cost of these vessels. The following table illustrates
the cash paid for the acquisition and construction of vessels and the cash paid
for drydocking of our vessels, for the years ended December 31, 2007, 2008 and
2009.




57






Year
      Ended December 31,2007
            
            
            
            2008
            
            
            
            2009(in
      thousands of U.S. dollars)Payments
      for net vessel acquisitions
            
            
            66,217
            
            
            
            21,665
            
            
            
            25,420Payments
      for vessel construction
            
            
            55,529
            
            
            
            116,990
            
            
            
            84,444Payments
      for drydocking
            
            
            3,186
            
            
            
            6,890
            
            
            
            5,504




Payments
for vessel acquisitions will continue in the coming years due to our existing
commitments on our newbuilding contracts. As of December 31, 2009, three of the
15 bunkering tankers on order have a total construction cost of $11.0 million
each, three have a total construction cost of $11.6 million each, five have a
construction cost of $10.7 million each, and the remaining four have a
construction cost of $12.2 million each.  These costs include
newbuilding contracts with the shipyards as well as supervision contracts. The
construction costs of both the bunkering tankers and the specialty tanker are
payable in milestones over the duration of the construction of these vessels.
The 2010 payment schedule for these newbuilding contracts for the bunkering
tankers is $61,921.




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




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




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




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




Cash
Flow




Net
Cash Provided By Operating Activities




Net cash
used in operating activities was $61.4 million for the year ended December 31,
2009 as compared to net cash provided by operating activities of $136.7 million
for 2008. This decrease was primarily attributable to an increase in working
capital as a result of the increase in the price of marine petroleum products
during the last quarter of 2009.  Working capital excluding cash and
debt increased by $121.6 million, to a surplus of $221.8 million as of December
31, 2009 compared to a surplus of $100.2 million as of December 31,
2008.





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


58






Net
Cash Used In Investing Activities




Net cash
used in investing activities was $75.2 million for the year ended December 31,
2009. During the period, we paid $84.4 million as milestone payments under our
newbuilding and engineering contracts and we paid $25.4 million mainly to
acquire the secondhand vessels, Aegean Star, Aegean Champion and Aegean Ace.
Furthermore, we received net cash consideration of $34.5 million for the sale of
our specialty tankers and our vessel Aegean IX.




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




Net
Cash Provided by Financing Activities




Net cash
provided by financing activities was $144.5 million for the year ended December
31, 2009 mainly due to additional drawdowns of $133.6 million under our term
loan facilities and our senior secured credit facility to finance a portion of
the construction costs of our new vessels and the marine petroleum purchases for
resale to our customers and due to an increase in short-term borrowings under
our credit facilities for the same purposes.  Part of this increase in
funding was offset by repayments of long-term debt of $36.2
million.  Furthermore, during the year ended December 31, 2009, we
paid for financing costs $1.2 million and declared and paid dividends of $1.7
million to our shareholders.




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




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




Not
applicable.




D.           Trend
information.




During
the year ended December 31, 2009, our sales volume of marine fuel increased by
19.1% as compared to the prior year, which was mainly due to additional sales of
marine fuel in the United Arab Emirates, Singapore and Canada.  We
have also expanded our bunkering fleet by taking delivery of five double-hull
bunkering tanker newbuildings and one specialty tanker newbuilding and by
acquiring three secondhand double-hull bunkering tankers.  We expect
our growth to continue in 2010 as we expand our business and marine fuel
delivery capabilities in existing markets and enter new markets, mainly in
connection with our expected acquisition of Verbeke Bunkering N.V. We have
commenced operations in Tangiers, Morocco and Trinidad and Tobago in the second
quarter of 2009 and we will expand our fleet by at least 15 new double hull
bunkering tankers, for which we have firm orders, during the next two years, and
may purchase additional secondhand vessels in the future.




In
addition to our bunkering operations, we market and distribute marine lubricants
under the Alfa Marine Lubricants brand. In February 2009, we entered into an
agreement to join the Sealub Alliance Network, a group formed by Gulf Oil Marine
Ltd. to collaborate in the marketing and distribution of marine
lubricants.  We expect the sales volumes of lubricants to further
increase in 2010.




59


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




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, 2009:




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)
            
            13.1
            
            182.7
            
            33.2
            
            122.1
            
            351.1Capital
      lease
            
            0.9
            
            2.0
            
            1.5
            
            -
            
            4.4Interest
      on long-term bank debt (1)
            
            9.7
            
            12.3
            
            8.6
            
            15.4
            
            46.0Minimum
      purchase commitments (2)
            
            171.2
            
            342.4
            
            342.4
            
            42.8
            
            898.8Newbuilding
      contracts—bunkering tankers
            
            61.9
            
            -
            
            -
            
            -
            
            61.9Total
            
            256.8
            
            539.4
            
            385.7
            
            180.3
            
            1,362.2





(1)
            Our long-term bank debt
      outstanding as of December 31, 2009 bears variable interest at margin over
      LIBOR. The calculation of variable rate interest payments is based on an
      actual weighted average rate of 2.70% for the year ended December 31,
      2009, adjusted upward by 10 basis points for each year
      thereafter.




(2)
            In the normal course of business,
      we have entered into long-term contracts with reputable suppliers, such as
      government refineries or major oil producers. The contractual commitments
      set forth in the above table include the minimum purchase requirements in
      our contract with Aegean Oil. The minimum purchase requirements provided
      for in our contract with Aegean Oil have been calculated by multiplying
      the minimum monthly volumes of marine fuel specified in the contract by an
      indicative market price based on quoted PLATTS prices as of December 31,
      2009.




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 the section entitled "Cautionary Statement Regarding Forward-Looking
Statements" in this report.




60




ITEM
6.        DIRECTORS, SENIOR
MANAGEMENTAND EMPLOYEES




A.           Directors
and Senior management




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




Name
            Age
            Position  Peter
      C. Georgiopoulos
            49
            Chairman
      of the Board, Class B DirectorYiannis
      N. Papanicolaou
            58
            Class
      A DirectorKonstantinos
      D. Koutsomitopoulos
            42
            Class
      A DirectorJohn
      P. Tavlarios
            48
            Class
      B DirectorSpyridon
      Fokas
            55
            General
      Counsel and Corporate Secretary, Class B DirectorAbel
      L. Rasterhoff
            69
            Class
      C DirectorGeorge
      Konomos
            71
            Class
      C DirectorE.
      Nikolas Tavlarios
            47
            PresidentDimitris
      Melisanidis
            59
            Head
      of Corporate DevelopmentSpyros
      Gianniotis
            49
            Chief
      Financial OfficerGregory
      Robolakis
            51
            General
      Manager, Aegean Marine Petroleum S.A.Nikolas
      Hondos
            56
            General
      Manager, Aegean Bunkering Services
Inc.


_______________


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





Our board
of directors is divided into three classes, as nearly equal in number as
possible, with each director serving a three-year term and one class being
elected at each year's annual meeting of shareholders. Class A Directors' term
expires in 2010.  Class B Directors' term expires in 2011. Class C
Directors' term expires in 2012.




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




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




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




61


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




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




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




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




62


George Konomos has served as
a member of our board of directors and as the chairman of our audit committee
since November 2008. Mr Konomos has also served as a member of the nominating
and corporate governance committee since May 2009. Currently, Mr. Konomos is a
Senior Advisor with Latigo Partners L.P., an alternative asset manager and
serves on the Board of Directors of General Maritime Corporation. From 2000 to
2005, Mr. Konomos was the Co-Portfolio Manager at Mellon-HBV Rediscovered
Opportunities Fund. Mr. Konomos' experience prior to joining Mellon-HBV includes
11 years as an Investment Manager at Baker Nye Investments, service as a senior
advisor to the World Bank on privatizations and financial restructurings of
state-owned companies and a 14-year career in investment banking at Lehman
Brothers and Samuel Montague & Co. Mr. Konomos holds a bachelor's degree in
economics from the University of Arizona, a master's degree in economics from
American University and a juris doctor degree from George Washington University
Law School.




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




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




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




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




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




63


Framework
Agreement




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




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




B.           Compensation.




The
aggregate annual compensation paid to our executive officers was $2.7 million
for the year ended December 31, 2009. We also paid $0.4 million to our
non-executive directors during the year ended December 31, 2009. Furthermore,
our executive officers and directors received an aggregate of 123,000 non-vested
shares pursuant to our equity incentive plan during the year ended December 31,
2009. In addition, each director is reimbursed for out-of-pocket expenses
incurred attending any meeting of the board of directors or any committee of the
board of directors. We do not maintain a medical, dental or retirement plan for
our directors. Officers who also serve as directors do not receive additional
compensation for their services as directors.




C.           Board
Practices.




Committees
of the Board of Directors




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




Audit
Committee




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




64







Compensation
Committee




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




Nominating
and Corporate Governance Committee




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




D.           Employees




The
following table reflects the number of our crews and salaried employees for the
periods indicated.




Year
      Ended December 31,2007
              
              
              2008
              
              
              2009Shipboard
      personnel
              
              
              386
              
              
              
              512
              
              
              
              684Shoreside
      personnel
              
              
              144
              
              
              
              203
              
              
              
              225Total
              
              
              530
              
              
              
              715
              
              
              
              909





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, 2009, we granted an aggregate of 590,336
restricted shares pursuant to the Plan to certain of our employees, executive
officers and directors.




65




ITEM 7.
            MAJOR SHAREHOLDERS AND RELATED
      PARTY TRANSACTIONS.




A.           Major
shareholders.




The
following table presents certain information regarding (1) the beneficial owner
of more than 5% of the shares of common stock and (2) the total amount of common
stock beneficially owned by all of our directors and executive officers, other
than Messrs. Melisanidis, Georgiopoulos and John Tavlarios, as a group in each
case as of March 30, 2010.




Name
            
            Number
            
            
            PercentageDimitris
      Melisanidis (1)
            
            
            15,178,031
            
            
            
            31.8
            %Peter
      C. Georgiopoulos
            
            
            4,295,250
            
            
            
            9.0
            %John
      P. Tavlarios (2)
            
            
            1,119,444
            
            
            
            2.3
            %Other
      directors and executive officers as a group
            
            
            330,938
            
            
            
            *


_________________


*
            Less
      than 1%




(1)
            Mr.
      Melisanidis beneficially owns 90,000 shares in his individual capacity and
      15,088,031 shares through Leveret International Inc., a Liberian
      corporation controlled by Mr.
Melisanidis.




(2)
            Includes
      shares owned by a trust for the benefit of members of Mr. Tavlarios's
      family.




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




As of
March 30, 2010, there were 13 record holders in the United States holding
approximately  67.6% 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. Under the agreement, as
amended and supplemented, we must purchase a minimum, and Aegean Oil must sell
up to a maximum, quantity of marine petroleum products. Aegean Oil sells the
marine petroleum products at an amount equal to its purchase costs from selected
Greek refineries plus a margin. 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.




66






Prior to
entering into the new marine fuel supply service agreement, we were a party to a
bunkering supply and representation agreement with Aegean Oil, which we entered
into on December 30, 1999, as amended on September 25, 2000. Pursuant to the
bunkering supply and representation agreement, Aegean Oil sold and delivered
marine petroleum products to our customers within Greek territorial waters.
Under the terms of the agreement, we paid Aegean Oil an amount equal to its
purchase costs of marine petroleum products from selected Greek refineries plus
a margin which was reviewed and negotiated monthly. During the years ended
December 31, 2007, 2008 and 2009 we purchased marine petroleum products from
Aegean Oil in the amount of $159.9 million, $351.5 million and $267.8,
respectively.




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




Bunkering
Agreement.  On July 31, 2008, we have entered into a bunkering
agreement with Aegean Oil.  Pursuant to the bunkering agreement,
Aegean Oil provides bunkering services on our behalf in the port of Piraeus and
other Greek ports.  Under the agreement, we pay a barging fee of
$25,000 per month, per vessel used.  During the year ended December
31, 2009, we had paid $2.5 million under the bunkering agreement




Bareboat
Charters.  On July 31, 2008, we have entered into a bareboat
charters with Aegean Oil for the charter of Aegean III, Aegean VIII, Aegean XII,
Aegean Rose, Aegean Daisy, Aegean Breeze I, Aegean Tiffany, Aegean Ace and
Aegean Orion. Under the bareboat agreements, Aegean Oil pays us a bareboat fee
of $500 per vessel, per day. During the year ended December 31, 2009, we have
received $1.3 million in bareboat payments from Aegean Oil.




Contract of
Affreightment.  On October 1, 2008, we had entered into a
contract of affreightment with Aegean Oil for the employment of our specialty
tanker, Maistros.  Pursuant to this agreement, Aegean Oil agreed to
annually ship 55,000 cubic meters of petroleum products at Euro 70 ($91) per
cubic meter.  During the year ended December 31, 2009, under the
contract of affreightment, we received $2.1 million in payments from Aegean Oil.
In May 2009, we entered into an agreement to sell the Maistros to an unrelated
third party for a purchase price of Euro 11.5 million. This contract of
affreightment was terminated on June 10, 2009 with the sale of the vesselr to an
unaffiliated third party purchaser.




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 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, 2007, 2008 and 2009 amounted to $0.1 million, $0 and $0,
respectively.




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, 2007, 2008 and 2009 amounted to $13.5
million, $9.6 million and $5.8, respectively.




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




67


On
October 14, 2009, the Company's subsidiary, Aegean Ostria Maritime Company,
entered into a memorandum of agreement with Aegean Gas Maritime Company, a
company owned and controlled by members of the family of Mr. Melisanidis, for
the purchase of a 20,000 dwt double hull bunkering barge, the Mediterranean, to
be used as a floating storage facility. The purchase price of the vessel was
$17.0 million, which was determined by disinterested members of our board of
directors to be no greater than it would have been with a third party on an
arm's length basis at the time we entered into the memorandum of agreement. The
acquisition was completed on February 25, 2010 by  the Company
acquiring the shares of Aegean Gas Maritime Company.




Leveret
International Inc. and AMPNInvest LLC




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 15,088,042 shares andMessrs. Georgiopoulos and
John Tavlarios own respectively 4,265,250 and 1,119,444 shares entitled to these
registration rights.




Fairy
Marine Ltd




In 2009,
we entered into three separate agreements with the Fairy Marine Ltd, or Fairy
Marine, a company owned and controlled by relatives of Mr. Melisanidis, relating
to  Aegean IX. On January 9, 2009, we entered into a bareboat charter
agreement and chartered the vessel to Fairy Marine for a $200 per day fee, and a
time charter agreement pursuant to which we chartered in Aegean IX in exchange
for a daily time charter fee of $3,500.  On January 10, 2009, we
signed a  management agreement for the management of the vessel in
exchange for a monthly fee of $6,000 payble to us. For the year ended December
31, 2009, the bareboat charter agreement and the management agreement resulted
in revenues of $136,000 collectively, while the time charter expenses amounted
to approximately $1.2 million.




Other
Related Parties




Sale of Marine Petroleum Products to
General Maritime Corporation.    General Maritime
Corporation, or General Maritime, a tanker company, purchases marine fuel and
lubricants from us. Mr. Georgiopoulos, our Chairman of the Board and
shareholder, serves as Chairman of the Board of General Maritime, and Mr.
Tavlarios, our director and shareholder, is the President, Chief Executive
Officer and a member of the board of directors of General Maritime and Mr.
Konomos, our director, is a member of the board of directors of General
Maritime. Our sales of marine petroleum products to General Maritime for the
years ended December 31, 2007, 2008 and 2009 amounted to $1.2 million, $1.3
million and $7.3, respectively.




Office
Lease.    We lease an office at
299 Park Avenue, New York, New York 10171, from General Maritime.  Our
lease currently expires on April 30, 2010.  We pay an average monthly
rental, which includes services that General Maritime provides for us, of
approximately $3,500.




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 non-vested shares previously
granted under the Plan were immediately vested.




Jamaica
Property.   On January 14, 2010, we entered into an
agreement with companies owned and controlled by members of Mr. Melisanidis'
family, for the purchase of property in Jamaica, to be used as a land-based
storage facility. The purchase price for the property was $9.8 million, which
was determined by disinterested members of our board of directors to be no
greater than it would have been with a third party on an arm's length basis at
the time we entered into the memorandum of agreement. The closing of the
transaction is subject to a number of conditions precedent, including that we
shall have secured the necessary financing.  We expect that the
Jamaican property will require capital expenditures in the next few years
between $15.0 and $20.0 million.




68






C.           Interests
of experts and counsel.




Not
applicable.




ITEM
8.       FINANCIAL INFORMATION




A.
Consolidated Statements and Other Financial Information




See Item
18.




Dividend
Distribution Policy




Our
policy is to pay regular cash dividends on a quarterly basis on shares of our
common stock so long as we have sufficient capital or earnings to do so. While
we cannot assure you that we will do so, and subject to, among other things,
legal requirements, our ability to obtain financing on terms acceptable to us
and our ability to satisfy financial covenants contained in our financing
arrangements, we paid dividends of $0.01 per share in March, June, September and
December 2009 for the fourth quarter of 2008 and the first, second and third
quarters of 2009, respectively. We have also declared a dividend of $0.01 per
share payable in March 2010 for the fourth quarter of 2010. 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 $300 and $50
million senior secured credit facilities, we are prohibited from paying
dividends if, among other things: (i) an event of default has occurred or will
occur as a result of the payment of the dividend; (ii) our book net worth is
less than $175.0 million; (iii) our ratio of total liabilities to total assets
exceeds 0.65-to-one; (iv) we fail to maintain free liquidity of $25.0 million in
an account at our lender's bank at the end of each month with average minimum
daily free liquidity of $10.0 million, or (v) our interest cover is less than
1.3.  Under our new trade 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 minimum net
equity base is less than $80 million; (iii) the net equity base of our guarantor
is less than $180 million; or (iv) our guarantor fails to maintain a current
ratio of 1.15 with a minimum working capital need of $50 million.




B.           Significant
Changes.




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




69




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
      ended December 31, 2007
            
            $
            13.70
            
            
            $
            48.63Year
      ended December 31, 2008
            
            $
            7.62
            
            
            $
            44.43Year
      ended December 31, 2009
            
            $
            11.82
            
            
            $
            28.36First
      Quarter 2008
            
            $
            22.23
            
            
            $
            40.18Second
      Quarter 2008
            
            $
            34.35
            
            
            $
            44.43Third
      Quarter 2008
            
            $
            19.22
            
            
            $
            40.00Fourth
      Quarter 2008
            
            $
            7.62
            
            
            $
            22.30First
      Quarter 2009
            
            $
            13.39
            
            
            $
            20.39Second
      Quarter 2009
            
            $
            11.82
            
            
            $
            18.51Third
      Quarter 2009
            
            $
            15.04
            
            
            $
            23.90Fourth
      Quarter 2009
            
            $
            20.70
            
            
            $
            28.36October
      2009
            
            $
            20.70
            
            
            $
            25.56November
      2009
            
            $
            22.68
            
            
            $
            28.25December
      2009
            
            $
            25.37
            
            
            $
            28.36January
      2010
            
            $
            27.70
            
            
            $
            35.05February
      2010
            
            $
            27.62
            
            
            $
            32.60March
      2010*
            
            $
            26.20
            
            
            $
            29.37


_____________
 *Through
March 30, 2010.





B.           Plan
of Distribution




Not
applicable




C.           Markets.




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




D.           Selling
Shareholders




Not
applicable.




E.           Dilution




Not
applicable.




F.           Expenses
of the Issue




Not
applicable.




70




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 on Form F-3 (Registration No. 333-162935) and is incorporated by
reference herein.




C.           Material
contracts.




As of
December 31, 2009, 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
U.S. federal income tax consequences to our Company and 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 stock to all categories of
investors, some of which, such as dealers in securities, investors whose
functional currency is not the U.S. dollar and investors that own, actually or
under applicable constructive ownership rules, 10% or more of our common stock,
may be subject to special rules. This discussion deals only with holders who own
the common stock as a capital asset. Moreover, this discussion is based upon
laws, regulations and other authorities in effect as of the date of this filing,
all of which are subject to change, possibly with retroactive effect. You are
encouraged to consult your own tax advisors concerning the overall tax
consequences arising in your own particular situation under U.S. 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 Greek 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 25% for fiscal year 2007, 2008 and 2009 and 24% for
fiscal years after 2010. All expenses to which the profit margin 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.




71


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 the ownership of our common stock. 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 our common stock,
provided such shareholders are not residents of the Marshall Islands. There is
no income 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 subsidiaries, including AMP, which conduct no
business in Liberia and were 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 subsidiaries 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 subsidiaries 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 U.S. counsel, the following are the
material U.S. 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
stock. The following discussion of U.S. federal income tax matters is based on
the U.S. Internal Revenue Code of 1986, as amended, or the Code, judicial
decisions, administrative pronouncements, and existing and proposed regulations
issued by the U.S. 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 U.S. 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 U.S. trade or business, or
Effectively Connected Income.




Income
from the sale of inventory property outside of 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 of the United States, and (2) the foreign corporation has a
fixed place of business in a foreign country which materially participates in
the sale.




While we
have a place of business in the United States, we believe that none of our
income from the sale of inventory property 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 from
the sale of inventory property will be subject to United States federal income
tax on a net basis.




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




U.S.
Federal Income Taxation of U.S. Holders




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




72


If a
partnership holds our common stock, 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 stock, 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 stock 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 U.S.
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 stock on a dollar-for-dollar basis,
and thereafter as capital gain. Because we are not a U.S. 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 stock 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 U.S. foreign
tax credit purposes.




Dividends
paid on our common stock 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 Holder at preferential tax rates
(through 2010) provided that (1) the common stock is 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 stock
for more than 60 days in the 121-day period beginning 60 days before the date on
which the common stock becomes 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 stock will be eligible for these preferential rates
in the hands of a U.S. Individual Holder. Any dividends paid by us that are not
eligible for these preferential rates (including dividends paid to U.S. Holders
other than U.S. Individual Holders) will be taxed as ordinary
income.  Legislation has previously been introduced in the U.S.
Congress which, if enacted in its present form, would preclude dividends
received on our common stock after the date of its 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 its common stock. If we
pay an "extraordinary dividend" on our common stock 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 stock will be treated as long-term
capital loss to the extent of such dividend.




Sale,
Exchange or Other Disposition of Common Stock




A U.S.
Holder generally will recognize taxable gain or loss upon a sale, exchange or
other disposition of our common stock in an amount equal to the difference
between the amount realized by the U.S. Holder from such sale, exchange or other
disposition and the U.S. Holder's tax basis in such common stock. Subject to the
discussion under the heading "Passive Foreign Investment Company" below, such
gain or loss will be treated as long-term capital gain or loss if the U.S.
Holder's holding period is greater than one year at the time of the sale,
exchange or other disposition, otherwise it will be treated as short-term
capital gain or loss. 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. Individual 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 such "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 activities, income, assets and market capitalization,
among other factors, and is subject to change.




73


If we are
classified as a PFIC, a U.S. Holder of our common stock could be subject to
increased tax liability upon the sale or other disposition of our common stock
or upon the receipt of amounts treated as "excess distributions." Under these
rules, the excess distribution and any gain upon a sale of our stock would be
allocated ratably over the U.S. shareholder's holding period for the common
stock, 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. In addition, shareholders of a PFIC may not
receive a "step-up" in basis on shares acquired from a decedent. U.S.
shareholders should consult with their own U.S. tax advisors with respect to the
U.S. tax consequences of investing in our common stock as well as the specific
application of the "excess distribution" rule and other rules discussed in this
paragraph.




The
effect of the PFIC rules on a U.S. Holder may be mitigated if the U.S. Holder
makes a valid and timely "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 common stock in the case that we are determined to
be a PFIC.




U.S.
Federal Income Taxation of Non-U.S. Holders




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




Dividends
on Common Stock




Non-U.S.
Holders generally will not be subject to U.S. federal income tax or withholding
tax on dividends received from us with respect to our common stock, 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 U.S. 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.




Sale,
Exchange or Other Disposition of Common Stock




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 stock, 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 a U.S. 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 U.S. trade or business for U.S. federal income
tax purposes, the income from the common stock, including dividends and the gain
from the sale, exchange or other disposition of the common stock that is
effectively connected with the conduct of that U.S. trade or business will
generally be subject to regular U.S. 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 such effectively connected income, 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 U.S. income tax
treaty.




Other
Taxes




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




F.           Dividends
and paying agents.




Not
applicable.




74


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.,
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.  This
web address is provided as an inactive textual reference
only.  Information contained on our website does not constitute part
of this annual report.




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, West Africa, the United Kingdom and the UAE, we operate storage
facilities and we currently import and store cargos of marine fuel prior to
resale to customers. Accordingly, in Gibraltar, West Africa, the United Kingdom
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 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.




75


Interest
Rate Risk




We are
subject to market risks relating to changes in interest rates as we have
significant amounts of floating rate long-term debt and short-term borrowings
outstanding. During the year ended December 31, 2009, 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, 2009 from $9.3 million to $12.4 million. 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 in our floating rate
long-term and short-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,
2009, comprised approximately 94% of our total operating expenses have been
denominated in U.S. dollars. Our balance sheet is mainly comprised of
dollar-denominated assets including trade receivables, inventories and the cost
of vessels, and liabilities including trade payables, short-term borrowings and
long-term loans. Our foreign exchange losses in recent periods have mainly
arisen from the translation of assets and liabilities of our service centers
that are denominated in local currency. Accordingly, the impact of foreign
exchange fluctuations on our consolidated statements of income has been
minimal.




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




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.




76


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, 2009.  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. We
believe that a system of controls, no matter how well designed and operated,
cannot provide assurance that the objectives of the controls are met, and no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within a company have been
detected.




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




Management
is 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, our principal executive and principal financial
officers and effected by our 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 our
      assets;




·
            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 our 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.




77


Management
with the participation of our President and Chief Financial 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, 2009. Based upon that evaluation, our President and
Chief Financial Officer concluded that our internal controls over financial
reporting are effective as of December 31, 2009.




The
effectiveness of our internal control over financial reporting as of December
31, 2009 has been audited by Deloitte 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 our internal control over financial reporting, appearing
on page F-3 of the financial statements filed as a part of this report, and is
incorporated herein by reference.




(d)           Changes
in internal control over financial reporting.




There
were no changes in our internal controls over financial reporting that occurred
during the period covered by this annual report that have materially effected,
or are reasonably likely to materially affect, our 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, we have appointed an audit committee whose members
as of December 31, 2009 are Messrs. Konomos, Rasterhoff and
Papanicolaou.  Mr. Konomos  has been determined to be a
financial expert by our board of directors and independent, as that term is
defined in the listing standards.




ITEM
      16B.
            CODE
      OF ETHICS




We have
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
our 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, 2007, 2008 and 2009 were
Deloitte Hadjipavlou Sofianos & Cambanis S.A.  The aggregate audit
fees billed to us for the years ended December 31, 2007, 2008 and 2009 were $0.6
million, $0.5 million and $0.6 million, respectively.  There were $0.1
million and $50,000 tax fees and audit-related fees, respectively, incurred by
us during 2008 and $44,600 tax fees incurred by us during 2009.  There
were no audit-related, tax or other fees billed to us during 2007.




ITEM
      16D.
            EXEMPTIONS
      FROM LISTING STANDARDS FOR AUDIT
COMMITTEES




None.




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




None.




78







ITEM
      16F.
            CHANGE
      IN REGISTRANT'S CERTIFYING
ACCOUNTANT




None.




ITEM
      16G.
            CORPORATE
      GOVERNANCE




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




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




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







PART
III




ITEM
      17.
            FINANCIAL
      STATEMENTS




See Item
18.





ITEM
18.     FINANCIAL STATEMENTS





The
financial statements, together with the report of Deloitte Hadjipavlou Sofianos
& Cambanis S.A. thereon, are set forth on pages F-2 through F-3 and are
filed as a part of this report.





79


ITEM
      19.
            EXHIBITS





Exhibit
      Number
            Description1.1
            Amended
      and Restated Articles of Incorporation of Aegean Marine Petroleum Network
      Inc.(1)1.2
            Amended
      and Restated Bylaws of Aegean Marine Petroleum Network Inc.(1)2.1
            Form
      of common share certificate of Aegean Marine Petroleum Network Inc.(1)4.1
            Form
      of Registration Rights Agreement(1)4.2
            Amended
      and Restated 2006 Stock Incentive Plan(2)4.3
            Form
      of shipbuilding contract for construction of one 3,500 dwt product oil
      tanker with Fujian Southeast Shipyard, as amended(1)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(1)4.5
            Form
      of shipbuilding contract for the design, construction, sale and purchase
      of a 2,400 dwt double hull product oil tanker with ro-ro facility with
      Severnav S.A.(1)4.6
            Marine
      Fuel Supply Service Agreement, dated April 1, 2005, by and between Aegean
      Marine Petroleum S.A. and Aegean Oil S.A.(1)4.7
            Form
      of License Agreement by and between Aegean Oil S.A. and Aegean Marine
      Petroleum Network Inc.(1)4.8
            Loan
      Agreement, dated August 30, 2005, by and among Aegean Baltic Bank S.A. and
      HSH Nordbank AG, as Lenders, and Kithnos Maritime, Inc., Naxos Maritime
      Inc., Paros Maritime Inc. and Serifos Maritime Inc., as Borrowers(1)4.9
            Form
      of contract for design, building supervision, representation, procurement
      of machines and supplies, and turn-key delivery of a 5,500 dwt product
      tanker with IOTA Corporation(1)4.10
            Option
      Agreement, dated January 13, 2006, by and between Aegean Bunkering
      Services Inc. and Qingdao Hyundai Shipbuilding Co. Ltd., as amended(1)4.11
            Financial
      Agreement, dated October 26, 2005, by and among Aegean Baltic Bank S.A.
      and HSH Nordbank AG, as Lenders, and Dynamic Corp. and Sea Global S.A., as
      Borrowers(1)4.12
            Loan
      Agreement, dated February 10, 2006, by and among The Royal Bank of
      Scotland plc, as Lender, and Amorgos Maritime Inc., Kimolos Maritime Inc.,
      Milos Maritime Inc., Mykonos Maritime Inc. and Syros Maritime Inc., as
      Borrowers(1)4.13
            Framework
      Agreement, dated July 19, 2006, by and between Leveret International Inc.
      and AMPNInvest LLC, as amended(1)4.14
            Form
      of shipbuilding contract for construction of one 5,500 dwt product oil
      tanker with Qingdao Hyundai Shipbuilding Co. Ltd.(1)4.15
            Loan
      Agreement, dated October 25, 2006, by and among Aegean Baltic Bank S.A.
      and HSH Nordbank AG, as Lenders, and Eton Marine Ltd., Benmore Services
      S.A. and Ingram Enterprises Co., as Borrowers(1)


80




Exhibit
      Number
            Description


4.16
            Loan
      Agreement, dated October 27, 2006, by and among National Bank of Greece
      S.A., as Lender, and Tasman Seaways Inc. and Santon Limited, as
      Borrowers(1)4.17
            Loan
      Agreement, dated October 30, 2006, by and among Aegean Baltic Bank S.A.
      and HSH Nordbank AG, as Lenders, and Kerkyra Marine S.A., Ithaki Marine
      S.A., Cephallonia Marine S.A., Paxoi Marine S.A., Zakynthos Marine S.A.,
      Lefkas Marine S.A. and Kythira Marine S.A., as Borrowers(1)4.18
            Loan
      Agreement, dated December 19, 2006, by and among The Royal Bank of
      Scotland plc, as Lender, and Aegean Marine Petroleum Network Inc. and
      Aegean Marine Petroleum S.A., as Borrowers, as amended(3)4.19
            Supplemental
      Agreement, dated June 8, 2007 relating to loan agreement dated August 30,
      2005, by and among Aegean Baltic Bank S.A. and HSH Nordbank AG, as
      Lenders, and Kithnos Maritime, Inc., Naxos Maritime Inc., Paros Maritime
      Inc. and Serifos Maritime Inc., as Borrowers(3)4.20
            Supplemental
      Agreement, dated June 13, 2007 relating to a loan agreement, dated October
      30, 2006, by and among Aegean Baltic Bank S.A. and HSH Nordbank AG, as
      Lenders, and Kerkyra Marine S.A., Ithaki Marine S.A., Cephallonia Marine
      S.A., Paxoi Marine S.A., Zakynthos Marine S.A., Lefkas Marine S.A. and
      Kythira Marine S.A., as Borrowers(3)4.21
            Loan
      Agreement, dated July 5, 2007, by and among The Royal Bank of Scotland
      Plc, as Lender, and Andros Marine Inc., Dilos Marine Inc., Ios Marine
      Inc., Sifnos Marine Inc. and Tinos Marine Inc., as Borrowers, as amended
      and supplemented(6)4.22
            Form
      of shipbuilding contract for construction of one 3,800 dwt product oil
      tanker with Fujian Southeast Shipyard, as amended(3)4.23
            Loan
      Agreement, dated December 20, 2007, by and among The Royal Bank of
      Scotland Plc, as Lender, and Aegean Marine Petroleum S.A., as
      Borrower(4)4.24
            Revolving
      Overdraft Credit Facility, dated March 11, 2008, by and among Piraeus Bank
      A.E., as Lender, and Milos I Maritime Inc., Baldwin Management Co. and
      Vera Navigation S.A., as Borrowers(6)4.25
            Loan
      Agreement, dated April 24, 2008, by and among Aegean Baltic Bank S.A. and
      HSH Nordbank AG, as Lenders, and Kassos Navigation S.A., Tilos Navigation
      S.A., Symi Navigation S.A. and Halki Navigation S.A., as Borrowers(6)4.26
            Loan
      Agreement, dated July 8, 2008, by and among Piraeus Bank A.E., as Lender,
      and Aegean Bunkering Services Inc., as Borrower(6)4.27
            Loan
      Agreement, dated September 30, 2008, by and among The Royal Bank of
      Scotland Plc and HSH Nordbank AG, as
      Lenders, and Aegean Marine Petroleum S.A., as Borrower, as amended and
      supplemented(6)4.28
            Loan
      Agreement, dated August 5, 2009, by and among National Bank of Greece
      S.A., as Lender, Aegean Marine Petroleum S.A., as Borrower, and Aegean
      Marine Petroleum Inc., as Guarantor4.29
            Loan
      Agreement, dated November 19, 2009, by and among BNP Paribas, Paris, as
      Lender, Aegean Marine Petroleum S.A., as Borrower, and Aegean Marine
      Petroleum Network Inc., as Guarantor8.1
            List
      of Subsidiaries11.1
            Code
      of Ethics(5)12.1
            Rule
      13a-14(a)/15d-14(a) Certification of  Principal Executive
      Officer12.2
            Rule
      13a-14(a)/15d-14(a) Certification of  Principal Financial
      Officer13.1
            Certification
      of Principal Executive Officer pursuant to 18 U.S.C. Section
      135013.2
            Certification
      of  Principal Financial Officer pursuant to 18 U.S.C. Section
      1350


_____________


(1)
            Filed
      as an exhibit to the Company's Registration Statement on Form F-1,
      Registration No. 333-129768 and incorporated by reference
      herein.




(2)
            Filed
      as an exhibit to the Company's Current Report on Form 6-K furnished on
      September 14, 2007 and incorporated by reference
  herein.




(3)
            Filed
      as an exhibit to the Company's Registration Statement on Form F-1,
      Registration No. 333-146918 and incorporated by reference
      herein.




(4)
            Filed
      as an exhibit to the Company's Annual Report on Form 20-F filed on April
      17, 2008 and incorporated by reference
herein.




(5)
            Filed
      as an exhibit to the Company's Annual Report on Form 20-F filed on May 25,
      2007 and incorporated by reference
herein.




(6)
            Filed
      as an exhibit to the Company's Annual Report on Form 20-F filed on April
      22, 2009 and incorporated by reference
herein.








81


SIGNATURES





The
registrant hereby certifies that it meets all of the requirements for filing on
Form 20-F and that it has duly caused and authorized the undersigned to sign
this annual report on its behalf.





AEGEAN
      MARINE PETROLEUM NETWORK INC.By:
            /s/ E. Nikolas TavlariosName:  E.
      Nikolas Tavlarios
              Title:    PresidentDate:
      March 31, 2010











AEGEAN
MARINE PETROLEUM NETWORK INC.




INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS







PageReport
      of Independent Registered Public Accounting Firm
            
            F-2Report
      of Independent Registered Public Accounting Firm
            
            F-3Consolidated
      Balance Sheets as of December 31, 2008 and 2009
            
            F-4Consolidated
      Statements of Income
              for
      the years ended December 31, 2007, 2008 and 2009
            
            F-5Consolidated
      Statements of Stockholders' Equity
              for
      the years ended December 31, 2007, 2008 and 2009
            
            F-6Consolidated
      Statements of Cash Flows
              for
      the years ended December 31, 2007, 2008 and 2009
            
            F-7Notes
      to Consolidated Financial Statements
            
            F-8








F-1


REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








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


Majuro,
Republic of the Marshall Islands








We have
audited the accompanying consolidated balance sheets of Aegean Marine Petroleum
Network, Inc. and subsidiaries (the "Company") as of December 31, 2009 and 2008,
and the related consolidated statements of income, stockholders' equity, and
cash flows for each of the three years in the period ended December 31, 2009.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on the financial statements based on
our audits.





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





In our
opinion, such consolidated financial statements present fairly, in all material
respects, the financial position of Aegean Marine Petroleum Network, Inc. and
subsidiaries as of December 31, 2009 and 2008, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2009, 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, 2009, 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 March 30, 2010 expressed an unqualified
opinion on the Company's internal control over financial reporting.








Deloitte.


Hadjipavlou,
Sofianos & Cambanis S.A.


Athens,
Greece


March 30, 2010





F-2




REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





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


Majuro,
Republic of the Marshall Islands





We have
audited the internal control over financial reporting of Aegean Marine Petroleum
Network, Inc. and subsidiaries (the "Company") as of December 31, 2009, based on
criteria established in Internal Control — Integrated
Frameworkissued by the Committee of Sponsoring Organizations of the
Treadway Commission. The Company's management is responsible for maintaining
effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting, included in the
accompanying Management's Annual Report on Internal Control over Financial
Reporting.  Our responsibility is to express an opinion on the
Company's internal control over financial reporting based on our
audit.





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





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





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





In our
opinion, the Company maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2009, based on the criteria
established in Internal
Control — Integrated Frameworkissued by the Committee of Sponsoring
Organizations of the Treadway Commission.





We have
also audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the consolidated financial statements as of and
for the year ended December 31, 2009 of the Company and our report
dated March 30,
2010  expressed an unqualified opinion on those financial
statements.








Deloitte, Hadjipavlou
Sofianos & Cambanis S.A.


Athens,
Greece


March 30, 2010






F-3




AEGEAN
MARINE PETROLEUM NETWORK INC.
 CONSOLIDATED
BALANCE SHEETS
  AS
OF DECEMBER 31, 2008 AND 2009





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




December
      31,2008
            
            
            2009ASSETSCURRENT
      ASSETS:Cash
      and cash equivalents
            
            $
            46,927
            
            
            $
            54,841Trade
      receivables, net of allowance for doubtful accounts
              of
      $1,323 and $1,751, as of December 31, 2008 and 2009,
      respectively131,266
            
            
            
            275,630Due
      from related companies (Note 4)
            
            
            2,501
            
            
            
            8,454Inventories
      (Note 5)
            
            
            55,330
            
            
            
            140,115Prepayments
      and other current assets (Note 6)
            
            
            13,731
            
            
            
            24,476Deferred
      tax asset (Note 20)
            
            
            -
            
            
            
            170Restricted
      cash (Note 2 and 11)
            
            
            1,632
            
            
            
            5,000Total
      current assets
            
            
            251,387
            
            
            
            508,686FIXED
      ASSETS:Advances
      for vessels under construction and acquisitions (Note 7)
            
            
            113,564
            
            
            
            136,494Vessels,
      cost (Notes 8 and 12)
            
            
            260,741
            
            
            
            321,915Vessels,
      accumulated depreciation (Notes 8 and 12)
            
            
            (26,606
            )
            
            
            (41,993
            )Vessels'
      net book value
            
            
            234,135
            
            
            
            279,922Other
      fixed assets, net (Notes 9)
            
            
            1,681
            
            
            
            1,647Total
      fixed assets
            
            
            349,380
            
            
            
            418,063OTHER
      NON-CURRENT ASSETS:Restricted
      cash (Notes 2 and 12)
            
            
            3,838
            
            
            
            -Deferred
      charges, net (Note 10)
            
            
            12,440
            
            
            
            15,376Concession
      agreement (Note 3)
            
            
            7,407
            
            
            
            7,095Goodwill
      (Note 3)
            
            
            17,431
            
            
            
            17,431Deferred
      tax asset (Note 20)
            
            
            -
            
            
            
            598Other
      non-current assets
            
            
            24
            
            
            
            96Total
      assets
            
            $
            641,907
            
            
            
            967,345LIABILITIES AND STOCKHOLDERS'
      EQUITYCURRENT
      LIABILITIES:Short-term
      borrowings (Note 11)
            
            $
            90,000
            
            
            
            50,000Current
      portion of long-term debt (Note 12)
            
            
            9,352
            
            
            
            13,147Trade
      payables to third parties
            
            
            67,817
            
            
            
            182,438Trade
      payables to related companies (Note 4)
            
            
            22,462
            
            
            
            24,844Other
      payables to related companies  (Note 4)
            
            
            187
            
            
            
            585Accrued
      and other current liabilities
            
            
            12,204
            
            
            
            19,184Total
      current liabilities
            
            
            202,022
            
            
            
            290,198LONG-TERM
      DEBT, net of current portion (Note 12)
            
            
            154,269
            
            
            
            337,890OTHER
      NON-CURRENT LIABILITIES
            
            
            613
            
            
            
            4,200COMMITMENTS
      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, 2008
      and 2009;  42,543,608 and 43,009,303 shares, issued and
      outstanding at December 31, 2008 and 2009, respectively (Note
      18)
            
            
            425
            
            
            
            430Additional
      paid-in capital (Note 18)
            
            
            190,658
            
            
            
            194,112Accumulated
      other comprehensive income (Note 21)
            
            
            211
            
            
            
            -Retained
      earnings
            
            
            93,709
            
            
            
            140,515Total
      stockholders' equity
            
            
            285,003
            
            
            
            335,057Total
      liabilities and stockholders' equity
            
            $
            641,907
            
            
            
            967,345  The
      accompanying notes are an integral part of these consolidated financial
      statements


F-4


AEGEAN
MARINE PETROLEUM NETWORK INC.


CONSOLIDATED
STATEMENTS OF INCOME


FOR
THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009




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




For
      the Year Ended December 31,2007
            
            
            2008
            
            
            2009REVENUES:Sales
      of marine petroleum products – third parties
            
            $
            1,331,144
            
            
            $
            2,757,181
            
            
            $
            2,436,340Sales
      of marine petroleum products – related companies (Notes 4)
            
            
            14,705
            
            
            
            10,886
            
            
            
            13,105Voyage
      revenues
            
            
            5,758
            
            
            
            1,379
            
            
            
            9,044Other
      revenues
            
            
            1,266
            
            
            
            8,526
            
            
            
            12,471Total
      revenues
            
            
            1,352,873
            
            
            
            2,777,972
            
            
            
            2,470,960OPERATING
      EXPENSES:Cost
      of marine petroleum products sold (exclusive of items shown separately
      below) – third parties
            
            
            1,091,769
            
            
            
            2,242,911
            
            
            
            1,999,193Cost
      of marine petroleum products sold (exclusive of items shown separately
      below)  – related companies (Note 4)
            
            
            159,943
            
            
            
            351,532
            
            
            
            267,767Salaries,
      wages and related costs
            
            
            24,363
            
            
            
            41,666
            
            
            
            47,708Depreciation
      (Notes 8 and 9)
            
            
            6,373
            
            
            
            12,604
            
            
            
            16,792Amortization
      of drydocking costs (Note 10)
            
            
            3,172
            
            
            
            3,640
            
            
            
            4,574Amortization
      of concession agreement (Note 3)
            
            
            52
            
            
            
            313
            
            
            
            312Management
      fees (Note 4)
            
            
            54
            
            
            
            -
            
            
            
            -Gain
      on sale of vessel, net (Note 8)
            
            
            (2,693
            )
            
            
            -
            
            
            
            (4,094
            )Other
      operating expenses (Note 14)
            
            
            39,042
            
            
            
            73,157
            
            
            
            79,492Total
      operating expenses
            
            
            1,322,075
            
            
            
            2,725,823
            
            
            
            2,411,744Operating
      income
            
            
            30,798
            
            
            
            52,149
            
            
            
            59,216OTHER
      INCOME/(EXPENSE):Interest
      and finance costs (Notes 11, 12 and 15)
            
            
            (3,473
            )
            
            
            (12,377
            )
            
            
            (10,255
            )Interest
      income
            
            
            1,990
            
            
            
            501
            
            
            
            46Foreign
      exchange gains (losses), net
            
            
            (1,569
            )
            
            
            1,521
            
            
            
            (329
            )(3,052
            )
            
            
            (10,355
            )
            
            
            (10,538
            )Income
      before income taxes
            
            
            27,746
            
            
            
            41,794
            
            
            
            48,678Income
      taxes (Note 20)
            
            
            (8
            )
            
            
            (1,879
            )
            
            
            (153
            )Net
      income
            
            $
            27,738
            
            
            $
            39,915
            
            
            
            48,525Basic
      earnings per common share
            
            $
            0.65
            
            
            $
            0.94
            
            
            $
            1.13Diluted
      earnings per common share
            
            $
            0.65
            
            
            $
            0.94
            
            
            $
            1.13Weighted
      average number of shares, basic
            
            
            42,417,111
            
            
            
            42,497,450
            
            
            
            42,579,187Weighted
      average number of shares, diluted
            
            
            42,505,704
            
            
            
            42,625,801
            
            
            
            42,644,448The
      accompanying notes are an integral part of these consolidated financial
      statements





F-5


AEGEAN
MARINE PETROLEUM NETWORK INC.


CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY


FOR
THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009




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




Common
      Stock
              
              
              Additional
                Paid-in
      Capital
              
              
              Retained
                Earnings
              
              
              Accumulated
                Other
      Comprehensive Income
              
              
              Total#
      of Shares
              
              
              Par
      ValueBALANCE,
      December 31, 2006
              
              
              42,410,000
              
              
              $
              424
              
              
              $
              185,103
              
              
              $
              29,472
              
              
              
              -
              
              
              $
              214,999-
      Net income
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              27,738
              
              
              
              -
              
              
              
              27,738-
      Dividends declared and paid
                ($0.14
      per share)
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (1,705
              )
              
              
              -
              
              
              
              (1,705
              )-
      Issuance of common stock in 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-
      Net income
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              39,915
              
              
              
              -
              
              
              
              39,915-
      Dividends declared and paid
                ($0.04
      per share)
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (1,711
              )
              
              
              -
              
              
              
              (1,711
              )-
      Share-based compensation (Note 17)
              
              
              82,180
              
              
              
              -
              
              
              
              2,863
              
              
              
              -
              
              
              
              -
              
              
              
              2,863-
      Foreign currency translation adjustment (Note 21)
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              211
              
              
              
              211BALANCE,
      December 31, 2008
              
              
              42,543,608
              
              
              $
              425
              
              
              $
              190,658
              
              
              $
              93,709
              
              
              $
              211
              
              
              $
              285,003-
      Net income
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              48,525
              
              
              
              -
              
              
              
              48,525-
      Dividends declared and paid
                ($0.04
      per share)
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (1,719
              )
              
              
              -
              
              
              
              (1,719
              )-
      Share-based compensation (Note 17)
              
              
              465,695
              
              
              
              5
              
              
              
              3,454
              
              
              
              -
              
              
              
              -
              
              
              
              3,459-
      Foreign currency translation adjustment (Note 21)
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (211
              )
              
              
              (211
              )BALANCE,
      December 31, 2009
              
              
              43,009,303
              
              
              $
              430
              
              
              $
              194,112
              
              
              $
              140,515
              
              
              
              -
              
              
              $
              335,057




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


F-6


AEGEAN
MARINE PETROLEUM NETWORK INC.


CONSOLIDATED
STATEMENTS OF CASH FLOWS


FOR
THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009





(Expressed
in thousands of U.S. dollars)




For
      the Year Ended December 31,2007
              
              
              2008
              
              
              2009Cash
      flows from operating activities:Net
      income
              
              $
              27,738
              
              
              $
              39,915
              
              
              $
              48,525Adjustments
      to reconcile net income to net cash provided by operating
      activities:Depreciation
              
              
              6,373
              
              
              
              12,604
              
              
              
              16,792Provision
      for (release of) doubtful accounts
              
              
              497
              
              
              
              (280
              )
              
              
              428Share-based
      compensation
              
              
              1,920
              
              
              
              2,863
              
              
              
              3,458Amortization
              
              
              3,457
              
              
              
              4,783
              
              
              
              5,562Provision
      for income taxes
              
              
              8
              
              
              
              1,879
              
              
              
              153Gain
      on sale of vessel
              
              
              (2,693
              )
              
              
              -
              
              
              
              (4,094
              )Other
      non-cash charges
              
              
              -
              
              
              
              (136
              )
              
              
              -(Increase)
      decrease in:Trade
      receivables
              
              
              (115,707
              )
              
              
              87,228
              
              
              
              (144,792
              )Due
      from related companies
              
              
              (3,217
              )
              
              
              1,185
              
              
              
              (5,953
              )Inventories
              
              
              (65,205
              )
              
              
              44,550
              
              
              
              (84,785
              )Prepayments
      and other current assets
              
              
              (9,414
              )
              
              
              (1,187
              )
              
              
              (10,915
              )Increase
      (decrease) in:Trade
      payables
              
              
              27,213
              
              
              
              (35,680
              )
              
              
              114,622Other
      payables to related companies
              
              
              35
              
              
              
              27
              
              
              
              398Accrued
      and other current liabilities
              
              
              3,743
              
              
              
              (14,314
              )
              
              
              5,345(Increase)
      decrease in other non-current assets
              
              
              (10
              )
              
              
              93
              
              
              
              (670
              )Increase
      in other non-current liabilities
              
              
              320
              
              
              
              97
              
              
              
              77Payments
      for drydocking
              
              
              (3,186
              )
              
              
              (6,890
              )
              
              
              (5,504
              )Net
      cash (used in) provided by  operating activities
              
              
              (128,128
              )
              
              
              136,737
              
              
              
              (61,353
              )Cash
      flows from investing activities:Advances
      for vessels under construction
              
              
              (55,529
              )
              
              
              (116,990
              )
              
              
              (84,444
              )Advances
      for vessel acquisitions
              
              
              (66,217
              )
              
              
              (21,665
              )
              
              
              (25,420
              )Corporate
      acquisitions, net of cash acquired
              
              
              (5,728
              )
              
              
              (9,065
              )
              
              
              -Net
      proceeds from sale of vessels
              
              
              8,276
              
              
              
              -
              
              
              
              34,499Purchase
      of other fixed assets
              
              
              (409
              )
              
              
              (549
              )
              
              
              (335
              )Decrease
      in restricted cash
              
              
              2,915
              
              
              
              14,234
              
              
              
              5,470Increase
      in restricted cash
              
              
              (8,000
              )
              
              
              (1,632
              )
              
              
              (5,000
              )Net
      cash used in investing activities
              
              
              (124,692
              )
              
              
              (135,667
              )
              
              
              (75,230
              )Cash
      flows from financing activities:Proceeds
      from long-term debt
              
              
              41,815
              
              
              
              93,636
              
              
              
              133,648Repayment
      of long-term debt
              
              
              (280
              )
              
              
              (4,120
              )
              
              
              (36,232
              )Net
      change in short-term borrowings
              
              
              133,000
              
              
              
              (43,000
              )
              
              
              50,000Financing
      costs paid
              
              
              (468
              )
              
              
              (915
              )
              
              
              (1,200
              )Dividends
      paid
              
              
              (1,705
              )
              
              
              (1,711
              )
              
              
              (1,719
              )Net
      cash provided by financing activities
              
              
              172,362
              
              
              
              43,890
              
              
              
              144,497Net
      (increase) decrease in cash and cash equivalents
              
              
              (80,458
              )
              
              
              44,960
              
              
              
              7,914Cash
      and cash equivalents at beginning of year
              
              
              82,425
              
              
              
              1,967
              
              
              
              46,927Cash
      and cash equivalents at end of year
              
              $
              1,967
              
              
              $
              46,927
              
              
              
              54,841SUPPLEMENTAL CASH FLOW
      INFORMATIONCash
      paid during the year for interest, net of capitalized
      interest:
              
              $
              3,935
              
              
              $
              12,638
              
              
              $
              7,727Cash
      paid during the year for income taxes:
              
              $
              8
              
              
              
              -
              
              
              $
              1,788Shares
      issued to acquire a business:
              
              $
              773
              
              
              
              -
              
              
              
              -
  The
      accompanying notes are an integral part of these consolidated financial
      statements








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


1.      Basis
of Presentation:





The
accompanying consolidated financial statements include the accounts of Aegean
Marine Petroleum Network Inc. (hereinafter referred to as "Aegean") and its
subsidiaries (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
            
            05/18/2007Aegean
      Bunkers at Sea NV (the "NW Europe Service Center")****
            
            Belgium
            
            12/16/1999Portland
      Bunkers International Ltd. (the "UK Service Center")
            
            United
      Kingdom
            
            12/13/1999ICS
      Petroleum LTD – Vancouver***
            
            Canada
            
            11/25/1985ICS
      Petroleum (Montreal) LTD
            
            Canada
            
            06/03/1986West
      Coast Fuel Transport – Mexico**
            
            Canada
            
            09/10/1990Aegean
      Bunkering Trinidad Ltd. . (the "Trinidad Service Center")
            
            Trinidad
      & Tobago
            
            02/20/2006







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




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




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




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




*****
Also, provides technical and logistics support to our operations in Morocco in
the Tangier Med 1 area.




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




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


1.      Basis
of Presentation: (Continued)





(d)
            Vessel-owning
      companies with operating vessels:





Vessel
      DetailsCompany
      Name
            
            Date
      of
              Incorporation
            
            Vessel
              Name
            Year
              Built
            Size
              (dwt)
            Date  AcquiredAegean
      Seven Maritime Inc. ("Aegean VII")
            
            01/20/1998
            
            Aegean
      VII
            1984
            3,892
            02/04/1998Clyde
      I Shipping Corp. ("Clyde")
            
            05/10/2004
            
            Aegean
      Tulip
            1993
            4,853
            05/20/2004Aegean
      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
      II
            1981
            67,980
            09/05/2006Vera
      Navigation S.A. ("Vera")
            
            09/14/2007
            
            Vera
            1985
            3,720
            10/09/2007Milos
      I Maritime Inc. ("Milos I")
            
            01/28/2005
            
            Hope
            1980
            10,597
            08/24/2007Ouranos
      Tanking S.A. ("Ouranos")
            
            02/09/2007
            
            Ouranos
            1983
            67,980
            02/20/2007Sea
      Breezer Marine S.A. ("Sea Breezer")
            
            04/02/2004
            
            Aegean
      Princess
            1991
            7,030
            05/25/2007Milos
      Shipping Pte. Ltd. ("Milos")
            
            11/23/2006
            
            Milos
            2007
            4,626
            06/29/2007Serifos
      Shipping Pte. Ltd. ("Serifos")
            
            11/23/2006
            
            Serifos
            2007
            4,664
            11/20/2007Pontos
      Navigation Inc. ("Pontos")
            
            09/09/2002
            
            Leader
            1985
            83,890
            09/21/2007Mykonos
      I Maritime Inc. ("Mykonos I")
            
            01/28/2005
            
            Mykonos
            2008
            4,626
            06/25/2008Santorini
      I Maritime Inc. ("Santorini I")
            
            01/28/2005
            
            Santorini
            2008
            4,629
            09/26/2008Amorgos
      Maritime Inc. ("Amorgos")
            
            01/28/2005
            
            Amorgos
            2007
            4,664
            12/21/2007Eton
      Marine Ltd. ("Eton")
            
            12/21/2005
            
            Patmos
            2008
            6,262
            11/18/2008Kithnos
      Maritime Inc. ("Kithnos")
            
            01/28/2005
            
            Kithnos
            2007
            4,626
            11/30/2007Paros
      Shipping Pte. Ltd. ("Paros")
            
            01/28/2005
            
            Paros
            2008
            4,629
            11/25/2008Kimolos
      Shipping Pte. Ltd. ("Kimolos")
            
            01/28/2005
            
            Kimolos
            2008
            4,664
            03/04/2008Syros
      I Maritime Inc. ("Syros I")
            
            01/28/2005
            
            Syros
            2008
            4,596
            04/21/2008Silver
      Sea Shipping S.A. ("Aegean Star")
            
            03/09/2009
            
            Aegean
      Star
            1980
            11,520
            04/08/2009AMP
      Maritime S.A.("Aegean Champion")
            
            12/15/2008
            
            Aegean
      Champion
            1991
            23,400
            04/30/2009Kerkyra
      Marine S.A.("Kerkyra")
            
            09/26/2006
            
            Kerkyra
            2009
            6,290
            07/29/2009Tasman
      Seaways Inc.("Kalymnos")
            
            12/21/2005
            
            Kalymnos
            2009
            6,283
            02/20/2009Paxoi
      Marine S.A.("Paxoi")
            
            09/26/2006
            
            Paxoi
            2009
            6,310
            11/20/2009Ithaki
      Shipping Pte. Ltd. ("Ithaki")
            
            07/06/2009
            
            Ithaki
            2009
            6,272
            09/01/2009Naxos
      Shipping Pte. Ltd.("Naxos")
            
            12/18/2008
            
            Naxos
            2009
            4,626
            01/07/2009Cephallonia
      Marine S.A.
            
            09/26/2006
            
            Kefalonia
            2009
            6,272
            10/15/2009PT22
      Shipping Co. Ltd.("PT22")
            
            01/22/2009
            
            PT22
            2001
            2,315
            05/29/2009








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





Vessel
      DetailsCompany
      Name
            
            Date
      of Incorporation
            
            Hull
              Number
            Size
              (dwt)Andros
      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
            4,600Zakynthos
      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
            5,500Benmore
      Services S.A. ("Benmore")
            
            12/21/2005
            
            QHS
      222
            5,500Ingram
      Enterprises Co. ("Ingram")
            
            01/10/2006
            
            QHS
      223
            5,500Santon
      Limited ("Santon")
            
            01/10/2006
            
            QHS
      224
            5,500Kassos
      Navigation SA ("Kassos")
            
            02/14/2008
            
            QHS
      225
            5,500Tilos
      Navigation SA ("Tilos")
            
            02/14/2008
            
            QHS
      226
            5,500Halki
      Navigation SA ("Halki")
            
            02/14/2008
            
            QHS
      227
            5,500Symi
      Navigation SA ("Symi")
            
            02/14/2008
            
            QHS
      228
            5,500





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





1.      Basis
of Presentation: (Continued)





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





(g)
            Vessel-maritime
      companies with operating vessels:





Vessel
      DetailsCompany
      Name
            
            Date
      of
              Incorporation
            
            Vessel
              Name
            Year
              Built
            Size
              (dwt)
            Date  AcquiredAegean
      Tiffany Maritime Company
            
            01/23/2009
            
            Aegean
      Tiffany
            2004
            2,747
            07/07/2004Aegean
      Breeze  Maritime Company
            
            01/23/2009
            
            Aegean
      Breeze I
            2004
            2,747
            07/07/2004Aegean
      Rose Maritime Company
            
            12/02/2002
            
            Aegean
      Rose
            1988
            4,935
            01/21/2003Aegean
      Daisy Maritime Company
            
            12/02/2002
            
            Aegean
      Daisy
            1988
            4,935
            01/21/2003Aegean
      Ship III Maritime Company
            
            06/23/2008
            
            Aegean
      III
            1990
            2,973
            07/08/2008Aegean
      Ship VIII Maritime Company
            
            06/23/2008
            
            Aegean
      VIII
            1989
            2,973
            07/08/2008Aegean
      XII Ship Maritime Company
            
            06/23/2008
            
            Aegean
      XII
            1979
            3,680
            07/08/2008Aegean
      Ace Maritime Company
            
            01/26/2009
            
            Aegean
      Ace
            1992
            1,615
            03/23/2009Aegean
      Maistros Maritime Company
            
            11/21/2007
            
            Aegean
      Orion
            1991
            550
            09/07/2009




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





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





As of
December 31, 2008 and 2009 Aegean's ownership interest in all the above
subsidiaries, except for the UAE Service Center, amounted to 100%.




During
the years ended December 31, 2007, 2008 and 2009 no customer individually
accounted for more than 10% of the Company's total revenues.




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


2.      Significant
Accounting Policies:




Principles of
Consolidation: The consolidated financial statements have been prepared
in accordance with U.S. generally accepted accounting principles and include for
each of the three years in the period ended December 31, 2009, the accounts and
operating results of the Company. Intercompany balances and transactions have
been eliminated in consolidation.




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




Other
Comprehensive Income:The guidance regarding
reporting comprehensive income/ (loss) requires separate presentation of certain
transactions that are recorded directly as components of stockholders' equity.
During 2008, the Company reported cumulative translation adjustments in
accumulated other comprehensive income, arising from the translation of the
financial statements of its Euro functional currency subsidiaries into U.S.
dollars. As of December 31, 2008 the amount of cumulative translation
adjustments was $211. As of December 31, 2009, due to the sale of the vessels of
these subsidiaries, the amount of cumulative translation adjustments is
$0.




Foreign Currency
Transactions:The functional currency
of Aegean and its material subsidiaries is the U.S. dollar because the Company
purchases and sells marine petroleum products in the international oil and gas
markets and because the Company's vessels operate in international shipping
markets; both of these international markets transact business primarily in U.S.
dollars. The Company's accounting records are maintained in U.S. dollars.
Transactions involving other currencies during the year are converted into U.S.
dollars using the exchange rates in effect at the time of the transactions. At
the balance sheet dates, monetary assets and liabilities denominated in other
currencies are adjusted to reflect the year-end exchange rates. Resulting gains
or losses are reflected separately in the accompanying consolidated statements
of income. As required by the general accepted accounting principles for foreign
currency transactions, the financial statements of the Euro functional currency
subsidiaries have been converted to U.S. dollars by the application of the
translation method (current rate method).  All assets and liabilities
are translated using the current exchange rate.  Shareholders equity
accounts are translated using historical rates.  Revenues and expenses
are translated using the weighted average exchange rate in effect during the
period.  Exchange differences on the translation of entities with
functional currencies other than the U.S. dollar, are recognized directly in the
foreign currency translation reserve as other comprehensive income.




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




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




Trade
Receivables, net:Management is responsible for approving
credit to customers, setting and maintaining credit standards, and managing the
overall quality of the credit portfolio. The Company performs ongoing credit
evaluations of its customers based upon payment history and the assessments of
customers' credit worthiness. The Company generally provides payment terms of
approximately 30 days. The Company continuously monitors collections and
payments from its customers and maintains a provision for estimated credit
losses based upon its historical experience with its customers, current market
conditions of its customers, and any specific customer collection issues.
Accounts receivable are reduced by an allowance for amounts that may become
uncollectible in the future. The Company had accounts receivable of $132,589,
and $277,381 before allowances for bad debts of $1,323 and $1,751 as of December
31, 2008 and 2009, respectively.






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







2.      Significant
Accounting Policies: (Continued)




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




As
required by the goodwill topic of the FASB Accounting Standard Codification,
goodwill is not amortized, but reviewed as of December 31 of each year for
impairment. The Company tests for goodwill impairment using the two-step
process. The first step is a screen for potential impairment, while the second
step measures the amount of impairment. Fair values are derived using discounted
cash flow analysis.




Impairment of
Long-Lived Assets:Accounting guidance 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.




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


2.      Significant
Accounting Policies: (Continued)




Leases:The Company records vessels under capital leases as fixed assets at the
lower of the present value of the minimum lease payments at inception of the
lease or the fair value of the vessel. Vessels under capital leases are
amortized over the estimated remaining useful life of the vessel for capital
leases which provide for transfer of title of the vessel, similar to that used
for other vessels of the Company.  Assets held under capital leases
are presented as "Advances for vessels under construction and acquisitions" in
the balance sheet until the vessel is deemed ready for its intend use and the
balance is reclassified to "Vessels, cost".  The current portion of
capitalized lease obligations are reflected in the balance sheet in "Accrued and
other current liabilities" and remaining long-term capitalized lease obligations
are presented as "Other non-current liabilities".




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




Operating
expenses are accounted for on the accrual basis.




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









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


2.      Significant
Accounting Policies: (Continued)




Income Taxes:TheCompany
accounts for income taxes using the liability method, as required by the
generally accepted accounting principles for income taxes reporting. Under this
method deferred income tax assets and liabilities are established for temporary
differences between the financial reporting basis and the tax basis of the
Company's assets and liabilities at each period end corresponding to those
jurisdictions subject to income taxes.  Deferred tax assets are
recognized for all temporaryitems
and an offsetting valuation allowance is recorded to the extent that it is not
more likely than not that the asset will be realized.  Deferred tax is
measured based on tax rates and laws enacted or substantively enacted at the
balance sheet date in any jurisdiction.




Adoption
of the accounting for uncertain tax positions did not have a material impact on
the Company's 2007 consolidated financial statements.  Nevertheless,
income tax regulations in the different countries in which the Company operates
under which the Company's uncertain income tax positions are determined could be
interpreted differently.  In this sense, the income tax returns of the
Company's primary tax jurisdictions remain subject to examination by related tax
authorities.




Earnings per
Common Share:Basic earnings per common share are computed by dividing
net income available to common stockholders by the weighted average number of
common shares deemed outstanding during the year. Diluted earnings per common
share reflect the potential dilution that could occur if securities or other
contracts to issue common stock were exercised.  Dilution has been
computed by the treasury stock method whereby all of the Company's dilutive
securities (the warrants and stock options) are assumed to be exercised and the
proceeds used to repurchase common shares at the weighted average market price
of the Company's common stock during the relevant periods. The incremental
shares (the difference between the number of shares assumed issued and the
number of shares assumed purchased) shall be included in the denominator of the
diluted earnings per share computation. Non-vested shares are included in the
calculation of the diluted earnings per shares, based on the weighted average
number of non-vested shares assumed to be outstanding during the
period.




Derivatives :Guidance on accounting for derivative instruments requires 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, 2009, 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.




Financial
Instruments:The carrying amounts of cash and cash
equivalents, trade accounts receivable, and trade accounts payable reported in
the consolidated balance sheets approximate their respective fair values because
of the short term nature of these accounts. The fair value of revolving credit
facilities is estimated based on current rates offered to the Company for
similar debt of the same remaining maturities. Additionally, the Company
considers its creditworthiness in determining the fair value of the revolving
credit facilities.  The carrying value approximates the fair market
value for the floating rate loans.




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





2.      Significant
Accounting Policies: (Continued)
  Recent Accounting
Pronouncements:






In
December 2007, new guidance established accounting and reporting standards for
ownership interests in subsidiaries held by parties other than the parent, the
amount of consolidated net income attributable to the parent and to the
noncontrolling interest, changes in a parent's ownership interest, and the
valuation of retained noncontrolling equity investments when a subsidiary is
deconsolidated. The new guidance also establishes disclosure requirements that
clearly identify and distinguish between the interests of the parent and the
interests of the noncontrolling owners. The above-mentioned guidance was
effective for fiscal years beginning after December 15, 2008, and was adopted by
the Company in the first quarter of 2009. The adoption of the new guidance did
not have a material impact on the Company's consolidated financial
statements.




In
January 2009, the Company adopted guidance that amends the factors that should
be considered in developing renewal or extension assumptions used to determine
the useful life of a recognized intangible asset under previously-issued
guidance.  This guidance did not have a material impact on the
Company's financial condition and results of operations.




In June
2008, new guidance clarified that all outstanding unvested share-based payment
awards that contain rights to nonforfeitable dividends participate in
undistributed earnings with common shareholders. Awards of this nature are
considered participating securities, and the two-class method of computing basic
and diluted earnings per share must be applied. The Company determined that
non-vested shares granted under its equity incentive plan are participating
securities because the non-vested shares participate in dividends. The guidance
was effective for fiscal years beginning after December 15, 2008. This standard
did not have a material impact on the Company's disclosure of EPS.




In April
2009, new guidance was issued for interim disclosures about fair value of
financial instruments, which amends previous guidance for disclosures about fair
value of financial instruments to require disclosures about fair value of
financial instruments for interim reporting periods of publicly traded companies
as well as in annual financial statements.  The guidance also require
those disclosures in summarized financial information at interim reporting
periods.  The new guidance is effective for interim reporting periods
ending after June 15, 2009, with early adoption permitted for periods ending
after March 15, 2009.  The adoption of the above mentioned guidance in
2009 did not have an impact on the Company's consolidated financial
statements.




In June
2009, the Financial Accounting Standards Board ("FASB") issued Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles, which became the single source of authoritative U.S. GAAP recognized
by the FASB to be applied by nongovernmental entities. The Codification's
content carries the same level of authority, effectively superseding previous
guidance. The guidance is effective for financial statements issued for interim
and annual periods ending after September 15, 2009. The Company's adoption of
the new guidance in 2009 did not have an impact on the Company's consolidated
financial statements.




In June
2009, new guidance was issued with
regards to the consolidation of variable interest entities ("VIE").This guidance responds to concerns
about the application of certain key provisions of the FASB Interpretation,
including those regarding the transparency of the involvement with VIEs. The new
guidance revises the approach to determining the primary beneficiary of a VIE to
be more qualitative in nature and requires companies to more frequently reassess
whether they must consolidate a VIE. Specifically, the new guidance requires a qualitative
approach to identifying a controlling financial interest in a VIE and requires
ongoing assessment of whether an entity is a VIE and whether an interest in a
VIE makes the holder the primary beneficiary of the VIE. In addition, the
standard requires additional disclosures about the involvement with a VIE and
any significant changes in risk exposure due to that involvement. The guidance
is effective as of the beginning of the first fiscal year that begins after
November 15, 2009 and early adoption is prohibited. The Company is evaluating
the impact of this guidance on the Company's consolidated financial
statements.




In
January 2010, new guidance clarified that all assets acquired in a business
combination other than goodwill should be valued based on the fair value at the
date of acquisition.  This includes difficult-to-value intangible
assets that had previously been valued using the residual value method under
common practice.  The guidance was effective immediately upon
issuance.  This guidance did not have an impact on the Company's
financial statements as of December 31, 2009.




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







3.     Significant
Acquisitions:




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




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




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







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




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




Total
      revenues
            1,471,189Net
      income
            28,301Basic
      earnings per share
            0.67Diluted
      earnings per share
            0.67







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


3.     Significant
Acquisitions: (Continued)




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, $313 and $312 was recognized for the years ended December 31, 2007, 2008
and 2009 respectively.




The
annual aggregate amortization expense expected to be recognized after December
31, 2009, is as follows:




Amount2010
            
            
            3122011
            
            
            3122012
            
            
            3132013
            
            
            3122014
            
            
            3122015
      and therafter
            
            
            5,534







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




2007Total
      revenues
            
            
            1,354,187Net
      income
            
            
            25,947Basic
      earnings per share
            
            
            0.61Diluted
      earnings per share
            
            
            0.61







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




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


3.     Significant
Acquisitions: (Continued)




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





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





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




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




The
following table presents the unaudited proforma results as if the acquisition
had occurred at the beginning of each of the years ended December 31, 2007 and
2008:




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


F-18
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 (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 560 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 2007, 2008 and 2009, the Company purchased from the
Greek Subcontractor marine petroleum products of $159,943, $ 351,532 and
$267,767, respectively, all of which are included under cost of marine petroleum
products sold in the accompanying consolidated statements of
income.




In
2008, the Company entered into an agreement with the Greek Subcontractor. The
Company is paying $40 per month and $25 per month per vessel used, in 2008 and
2009, respectively as a barging fee, to the Greek Subcontractor for bunkering
services on the Company's behalf at Piraeus and other Greek ports. For the year
ended December 31, 2008 and 2009 we paid $700 and $2,505 under the bunkering
agreement.




As of
December 31, 2008 and 2009, the amounts due to the Greek Subcontractor were
$22,462 and $24,844 respectively, and are included under trade payables to
related companies in the accompanying consolidated balance sheets.




Also the
Subcontractor has entered into bareboat charter agreement with the owners of
Aegean III, Aegean VIII, Aegean XII, Aegean Rose, Aegean Daisy, Aegean Breeze I,
Aegean Tiffany, Aegean Ace and Aegean Orion at $0.5 per day per vessel. For the
year ended December 31, 2008 and 2009, the bareboat charter revenue was $413 and
$1,319 and is presented under other revenues in the accompanying consolidated
statement of income. In connection with the above bareboat charter agreements
with the owners of the vessels, the Company provides management services to the
Subcontractor for the ISM code at $10 per month, per vessel. For the year ended
December 31, 2008 and 2009, the revenue from the services was $90 and $784 and
is also presented under other revenues in the accompanying consolidated
statement of income.




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


4.     Transactions
with Related Parties: (Continued)




Additionally,
as of October 1, 2008, the Greek Subcontractor and our subsidiary Aegean
Maistros Maritime Company, owner of Ro-Ro Maistros, has signed an agreement so
that the Greek Subcontractor undertakes to ship
55,000 cubic meter of petroleum products per annum at Euro 0.07 or $0.09 per
cubic meter. This contract was terminated on June 10, 2009, when we sold the two
specialty tankers, Maistros and Ostria, to an unaffiliated third party
purchaser. For the year ended December 31, 2008 and 2009, the Company had
received $1,379 and $2,143, which are presented under voyage revenues in the
accompanying consolidated statement of income.




(b)
            Aegean
      Shipping Management S.A. and certain vessel-owning companies (hereinafter
      collectively referred to as "Aegean Shipping"):Aegean Shipping is
      owned by relatives of Mr. Dimitris Melisanidis and is the owner and
      operator of an international shipping fleet of tankers that 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, 2007, 2008 and
      2009, amounted to $54, $0 and $0, respectively, and are separately
      disclosed in the accompanying consolidated statements of
      income.




(ii)
            Aegean
      Shipping is a customer of the Company. It purchases marine fuel and
      lubricants, which it consumes during the voyages of its vessels. The
      Company's sales of marine fuel and lubricants to Aegean Shipping for the
      years ended December 31, 2007, 2008 and 2009, amounted to $13,509, $9,628
      and $5,779, respectively, and are included under sales of marine petroleum
      products in the accompanying consolidated statements of
      income.




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




(iv)
            On
      October 14, 2009, the Company's subsidiary, Aegean Ostria Maritime
      Company, entered into a memorandum of agreement with Aegean Gas Maritime
      Company, a company owned and controlled by members of the family of Mr.
      Dimitris Melisanidis, the Company's founder and Head of Corporate
      Development, for the purchase of a 20,000 dwt double hull bunkering barge,
      the Mediterranean, to be used as a floating storage facility. The purchase
      price of the vessel was $17.0 million, which was determined by
      disinterested members of our board of directors to be no greater than it
      would have been with a third party on an arm's length basis at the time we
      entered into the memorandum of agreement. The acquisition was completed on
      February 25, 2010. The purchase was completed by acquiring the shares of
      the company owing the Mediterranean by amending the memorandum of
      agreement.







As of
December 31, 2008 and 2009, the amounts due from Aegean Shipping were $2,480 and
$6,894 respectively, and are included in the accompanying consolidated balance
sheets.




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


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




Aegean's
Chairman of the Board, Mr. Peter C. Georgiopoulos, also serves as Chairman,
President and Chief Executive Officer of General Maritime which is a
publicly-traded tanker company with shares listed on the New York Stock
Exchange. During the years ended December 31, 2007, 2008 and 2009, the Company's
sales to General Maritime amounted to $1,196, $1,258 and $7,326, respectively,
which are included under sales of marine petroleum products in the accompanying
consolidated statements of income. As of December 31, 2007, 2008 and 2009, the
amounts due from General Maritime were $45, $21 and $1,144, respectively, which
are included in the accompanying consolidated balance sheets.




(d)
            Fairy
      Marine Ltd ("Fairy Marine"):




In 2009,
the Company entered into three separate agreements with the Fairy Marine, which
is owned and controlled by relatives of Mr. Dimitris Melisanidis, for the vessel
Aegean IX. On January 9, 2009 the bareboat charter agreement set $0.2 per day as
charter hire, the management agreement, signed on January 10, 2009, was agreed
for $6 per month and finally the charter-party agreement, on January 9, 2009,
defined the time charter fee for $3.5 per day. For the year ended December 31,
2009, the bareboat and the management agreement resulted to $136, included in
the other revenues in the accompanying consolidated balance sheets, while the
time charter expenses upon the agreement amounted to $1,201, included in the
other operating expenses in the accompanying consolidated balance sheets. As at
December 31, 2009, the Company is liable to the Fairy Marine for the amount of
$555, which is included in other payables to related parties in the accompanying
consolidated balance sheets.




F-21
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 (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
      31,2008
            
            
            2009Held
      for sale:Marine
      Fuel Oil
            
            
            44,564
            
            
            
            129,767Marine
      Gas Oil
            
            
            9,151
            
            
            
            8,92153,715
            
            
            
            138,688Held
      for consumption:Marine
      fuel
            
            
            517
            
            
            
            263Lubricants
            
            
            920
            
            
            
            959Stores
            
            
            33
            
            
            
            24Victuals
            
            
            145
            
            
            
            1811,615
            
            
            
            1,427Total
            
            
            55,330
            
            
            
            140,115





6.
            Prepayments
      and Other Current Assets:





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





December
      31,2008
            
            
            2009Insurance
      prepaid
            
            
            410
            
            
            
            223VAT
      receivable
            
            
            7,273
            
            
            
            12,854Other
      prepayments
            
            
            6,048
            
            
            
            11,399Total
            
            
            13,731
            
            
            
            24,476





7.      Advances
for Vessels under Construction and Acquisitions:





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




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




On May
25, 2007, as amended, the Company signed five separate shipbuilding contracts
with Fujian for five 4,600 dwt, double skin, double bottom, product oil tankers
(Hull Numbers DN-3800-11 to 15). The construction price of each contract is
$9,590 which is payable 8% in advance, 22% upon steel-cutting, 19% upon
keel-laying, 12% upon launching and 39% upon delivery and
acceptance.




On
February 28, 2008, and in connection with the call option agreement with the
Qingdao Hyundai Shipbuilding Co. Ltd. ("Qingdao Hyundai"), the Company signed
four separate shipbuilding contracts with




F-22
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise
  stated)


7.    Advances
for Vessels under Construction and Acquisitions: (Continued)




Qingdao
Hyundai for four 5,500 dwt, double skin, double bottom product oil tankers (hull
numbers QHS-225 to 228). The construction price of each contract is $10,600
which is payable 30% in advance, 20% upon steel-cutting, 20% upon keel-laying,
20% upon launching and 10% upon delivery and acceptance.




On
February 9, 2009, and in connection with the agreement with the Fujian Southeast
Shipyard ("Fujian"), which was signed on May 25, 2007, as amended, 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 4,600 dwt product oil tankers (hull numbers
DN-3800-11 to 15). The price of each such contract is $1,150, of which 15% is
payable upon keel-laying, 40% is payable upon launching and 45% is payable upon
delivery and acceptance.




On
February 9, 2009, and in connection with the call option agreement with the
Qingdao Hyundai Shipbuilding Co. Ltd. ("Qingdao Hyundai"), which was signed on
February 28, 2008, the Company signed four separate contracts with an
engineering firm for the design, building supervision, representation,
procurement of machineries and supplies, and turn-key delivery of the four 5,500
dwt, product oil tankers (hull numbers QHS-225 to 228). The price of each such
contract is $1,600, of which 15% is payable upon keel-laying, 40% is payable
upon launching and 45% is payable upon delivery and acceptance.




On April
30, 2009, the Company signed a Bareboat Charter Agreement with a third-party
owner for the charter of a Canadian – flagged 2,315 dwt (built in 2001) double
hull Oil Tank Barge, ITB Provider (renamed "PT 22"). The charter period is sixty
months. At expiration of the charter and upon the fulfillment of the Company's
obligations, which are separately described in the Note 16 ("Capital Leases"),
the title of PT 22 will transfer to the Company. Upon entering into the lease,
the Company incurred a capital lease obligation of $4,394.




The
amounts shown in the accompanying consolidated balance sheets include milestone
payments relating to the shipbuilding and engineering contracts 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, 2009, the account, advances for vessels under construction and
acquisitions, is analyzed as follows:




December
      31, 2009Vessel
      Name
              Year
      of Expected
                Delivery
              
              Contract
                Amount
              
              
              Contract
      Payments
              
              
              Capitalized
      Costs
              
              
              TotalFujian
      ShipyardDN-3800-11
              2010
              
              
              10,740
              
              
              
              6,485
              
              
              
              295
              
              
              
              6,780DN-3800-12
              2010
              
              
              10,740
              
              
              
              6,485
              
              
              
              156
              
              
              
              6,641DN-3800-13
              2010
              
              
              10,740
              
              
              
              4,893
              
              
              
              137
              
              
              
              5,030DN-3800-14
              2010
              
              
              10,740
              
              
              
              4,893
              
              
              
              130
              
              
              
              5,023DN-3800-15
              2010
              
              
              10,740
              
              
              
              2,888
              
              
              
              117
              
              
              
              3,005Qingdao
      Hyundai ShipyardQHS-209
              2009*
              
              
              11,382
              
              
              
              10,799
              
              
              
              995
              
              
              
              11,794QHS-210
              2009*
              
              
              11,363
              
              
              
              10,851
              
              
              
              843
              
              
              
              11,694QHS-215
              2010
              
              
              11,600
              
              
              
              8,880
              
              
              
              393
              
              
              
              9,273QHS-216
              2010
              
              
              11,600
              
              
              
              8,880
              
              
              
              324
              
              
              
              9,204QHS-217
              2010
              
              
              11,600
              
              
              
              8,880
              
              
              
              319
              
              
              
              9,199QHS-222
              2010
              
              
              11,000
              
              
              
              7,930
              
              
              
              231
              
              
              
              8,161QHS-223
              2010
              
              
              11,000
              
              
              
              7,930
              
              
              
              219
              
              
              
              8,149QHS-224
              2010
              
              
              11,000
              
              
              
              7,930
              
              
              
              256
              
              
              
              8,186QHS-225
              2010
              
              
              12,200
              
              
              
              10,420
              
              
              
              258
              
              
              
              10,678QHS-226
              2010
              
              
              12,200
              
              
              
              7,660
              
              
              
              247
              
              
              
              7,907QHS-227
              2010
              
              
              12,200
              
              
              
              7,660
              
              
              
              236
              
              
              
              7,896QHS-228
              2010
              
              
              12,200
              
              
              
              7,660
              
              
              
              214
              
              
              
              7,874Total
              
              
              193,045
              
              
              
              131,124
              
              
              
              5,370
              
              
              
              136,494





*Vessel
delivered in 2009 but as of December 31, 2009 was not positioned and
operational.


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





7.     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, 2007, 2008 and 2009 was $2,314, $2,868 and $1,774,
respectively.





During
the years ended December 31, 2008 and 2009, the movement of the account,
advances for vessels under construction and acquisitions, was as
follows:




Year
      Ended December 31,2008
            
            
            
            2009Balance
      at beginning of period
            
            
            84,378
            
            
            
            113,564Advances
      for vessels under construction and related costs
            
            
            118,396
            
            
            
            85,617Advances
      for secondhand vessel acquisitions
            
            
            21,665
            
            
            
            29,814Vessels
      delivered
            
            
            (110,875
            )
            
            
            (92,501
            )Balance
      at end of period
            
            
            113,564
            
            
            
            136,494




As of
December 31, 2009, the remaining obligations under the construction and
supervision contracts which are payable within 2010 are $61,921.




8.     Vessels:





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





Vessel
      Cost
            
            
            Accumulated
      Depreciation
            
            
            Net
      Book ValueBalance,
      December 31, 2007
            
            
            149,866
            
            
            
            (14,312
            )
            
            
            135,554-
      Vessels acquired and delivered
            
            
            110,875
            
            
            
            -
            
            
            
            110,875-
      Depreciation for the year
            
            
            -
            
            
            
            (12,294
            )
            
            
            (12,294
            )Balance,
      December 31, 2008
            
            
            260,741
            
            
            
            (26,606
            )
            
            
            234,135-
      Vessels acquired and delivered
            
            
            92,501
            
            
            
            -
            
            
            
            92,501-
      Vessels sold
            
            
            (31,327
            )
            
            
            1,051
            
            
            
            (30,276
            )-
      Depreciation for the year
            
            
            -
            
            
            
            (16,438
            )
            
            
            (16,438
            )Balance,
      December 31, 2009
            
            
            321,915
            
            
            
            (41,993
            )
            
            
            279,922





On June
10, 2009, the Company sold the vessels Maistros and Ostria to an unaffiliated
third-party purchaser for an aggregate price of $34,149. The resulting gain on
sale of $4,185 is separately reflected in the consolidated statement of income
for the year ended December 31, 2009.




On
December 18, 2009, the Company sold the vessel Aegean IX to an unaffiliated
third-party purchaser for an aggregate price of $400. The loss on sale of $91
was calculated as the sale price less the carrying value of the vessel of $372,
related sales expenses of $50 and the carrying value of unamortized dry-docking
costs of $69. This loss is separately reflected in the consolidated statement of
income for the year ended December 31, 2009.




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


As of
December 31, 2009, the Company was a party as lessee to one capital lease on a
PT barge.  The gross value of the capital lease is
$4,778.  The Company also had recorded accumulated depreciation
relating to the capital lease of $78.




During
the year ended December 31, 2008, the Company took deliveries of the following
vessels:









Vessel
      Name
            Date
      of
              operation
            Year
              Built
            
            Size
              (dwt)
            
            
            Total
      cost
              capitalizedKithnos
      (DN-3500-3)
            01/18/2008
            2007
            
            
            4,626
            
            
            
            9,272Amorgos
      (DN-3500-4)
            02/02/2008
            2007
            
            
            4,664
            
            
            
            9,118Kimolos
      (DN-3500-5)
            03/29/2008
            2008
            
            
            4,664
            
            
            
            8,912Syros
      (DN-3500-6)
            06/16/2008
            2008
            
            
            4,596
            
            
            
            9,174PT
      25
            07/01/2008
            1988
            
            
            2,560
            
            
            
            170PT
      36
            07/01/2008
            1980
            
            
            3,730
            
            
            
            426Aegean
      III
            07/08/2008
            1990
            
            
            2,973
            
            
            
            5,500Aegean
      VIII
            07/08/2008
            1990
            
            
            2,973
            
            
            
            5,522Orion
            07/23/2008
            1991
            
            
            550
            
            
            
            1,096Maistros
      (N 2220000)
            09/01/2008
            2008
            
            
            2,454
            
            
            
            13,778Mykonos
      (DN-3500-7)
            10/01/2008
            2008
            
            
            4,626
            
            
            
            9,484Alpha
      Launch
            10/01/2008
            2004
            
            
            60
            
            
            
            663Aegean
      XII
            10/17/2008
            1979
            
            
            3,680
            
            
            
            7,651Santorini
      (DN-3500-8)
            12/12/2008
            2008
            
            
            4,629
            
            
            
            9,428Paros
      (DN-3500-9)
            12/20/2008
            2008
            
            
            4,629
            
            
            
            8,855Patmos
      (QHS-220)
            12/29/2008
            2008
            
            
            6,262
            
            
            
            11,826110,875




For the
year ended December 31, 2009, the Company took deliveries of the following
vessels:




Vessel
      Name
            Date
      of
              operation
            Year
              Built
            
            Size
              (dwt)
            
            
            Total
      cost
              capitalizedKalymnos
      (QHS-221)
            06/12/2009
            2009
            
            
            6,283
            
            
            
            11,995Aegean
      Champion
            05/27/2009
            1991
            
            
            23,400
            
            
            
            12,810Aegean
      Star
            10/28/2009
            1980
            
            
            11,520
            
            
            
            8,194Kerkyra
      (QHS-207)
            10/07/2009
            2009
            
            
            6,290
            
            
            
            12,583Ostria
      (N2230007)
            Nil
            2009
            
            
            2,454
            
            
            
            16,583Aegean
      Ace
            05/18/2009
            1992
            
            
            1,615
            
            
            
            3,630Naxos
      (DN-3500-10)
            01/29/2009
            2009
            
            
            4,600
            
            
            
            8,844Ithaki
      (QHS-208)
            10/03/2009
            2009
            
            
            6,272
            
            
            
            12,043PT22
            08/20/2009
            2001
            
            
            2,507
            
            
            
            4,777Fujairah
      Launch
            05/07/2009
            1991
            
            
            41
            
            
            
            667Ghana
      Launch
            10/01/2009
            2003
            
            
            8
            
            
            
            37592,501




Cost of
vessels at December 31, 2007, 2008 and 2009, includes $19,402, $27,906 and
$35,575, 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, 2009, all of the Company's operational vessels, except for the
Aegean Flower and Aegean VII were mortgaged under the Company's various debt
agreements.




F-25
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise
  stated)


9.     Other
Fixed Assets:







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





Buildings
            
            
            Other
            
            
            TotalCost,
      December 31, 2007
            
            
            1,008
            
            
            
            750
            
            
            
            1,758-
      Additions
            
            
            -
            
            
            
            549
            
            
            
            549Cost,
      December 31, 2008
            
            
            1,008
            
            
            
            1,299
            
            
            
            2,307-
      Additions
            
            
            -
            
            
            
            335
            
            
            
            335-
      Disposals
            
            
            -
            
            
            
            (44
            )
            
            
            (44
            )Cost,
      December 31, 2009
            
            
            1,008
            
            
            
            1,590
            
            
            
            2,598Accumulated
      depreciation, December 31, 2007
            
            
            87
            
            
            
            240
            
            
            
            327-
      Depreciation expense
            
            
            35
            
            
            
            264
            
            
            
            299Accumulated
      depreciation, December 31, 2008
            
            
            122
            
            
            
            504
            
            
            
            626-
      Depreciation expense
            
            
            37
            
            
            
            317
            
            
            
            354-
      Disposals
            
            
            -
            
            
            
            (29
            )
            
            
            (29
            )Accumulated
      depreciation, December 31, 2009
            
            
            159
            
            
            
            792
            
            
            
            951Net
      book value, December 31, 2008
            
            
            886
            
            
            
            795
            
            
            
            1,681Net
      book value, December 31, 2009
            
            
            849
            
            
            
            798
            
            
            
            1,647




10.  Deferred
Charges:





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





Drydocking
            
            
            Financing
      Costs
            
            
            TotalBalance,
      December 31, 2007
            
            
            7,999
            
            
            
            870
            
            
            
            8,869-
      Additions
            
            
            7,126
            
            
            
            915
            
            
            
            8,041-
      Amortization for the year
            
            
            (3,640
            )
            
            
            (830
            )
            
            
            (4,470
            )Balance,
      December 31, 2008
            
            
            11,485
            
            
            
            955
            
            
            
            12,440-
      Additions
            
            
            7,055
            
            
            
            1,200
            
            
            
            8,255-
      Disposals
            
            
            (69
            )
            
            
            -
            
            
            
            (69
            )-
      Amortization for the year
            
            
            (4,574
            )
            
            
            (676
            )
            
            
            (5,250
            )Balance,
      December 31, 2009
            
            
            13,897
            
            
            
            1,479
            
            
            
            15,376





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








11.
            Short-term
      Borrowings:





On March
11, 2008, the Company entered into a one year, annually-renewable revolving
overdraft facility with a Greek bank for an amount of $20,000. The facility is
secured by a first priority mortgage over the vessels, Vera, Sara and Hope and
bears interest at LIBOR plus 2.50%.  Furthermore, the credit facility
contains financial covenants requiring the Company to ensure that (i) adjusted
consolidated book net worth, as defined, not be less than $175,000, (ii)
consolidated leverage ratio, as defined, not to exceed 0.65-to-one, and (iii)
consolidated liquid funds, as defined, not be less than $25,000.




F-26
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise
  stated)







On
September 30, 2008, the Company entered into a one year, renewable on January
31, 2009 and thereafter annually, revolving overdraft facility with
international banks for an amount of up to $1,000,000. The "2008 Revolving
Overdraft Facility" bears interest at LIBOR plus 1.50% and is annually renewable
subject to the  consent of the participant banks. The facility is
structured in such a way so that, depending on the Company's working capital
needs, it allows the amount to be increased with funds from existing or future
participant banks, without changing the security documents and incurring new
legal costs. The 2008 Revolving Overdraft Facility was renewed retroactively
from February 1, 2009, for a period of two years, until January 31, 2011, and
described below, in Note 12,"Long-term debt". As a result of this renewal, the
facility was reclassified from short-term borrowings to long-term debt. This
transfer was not treated as a cash outflow for the purposes of the statement of
cash flows, but rather was a non-cash transfer between accounts.




On April
23, 2009, the Company renewed retroactively from March 11, 2009, for a period of
one year, until March 11, 2010, the revolving overdraft facility with a Greek
bank for an amount of $20,000, that was signed on March 11, 2008. The renewed
facility bears interest at LIBOR plus 2.50% for the first $10,000 and LIBOR plus
3.50% for the remaining amount. All other terms and conditions remain the same
as referred above.




On
September 17, 2009, the Company entered into an annually renewable senior
secured revolving credit facility with a Greek bank for an amount of $50,000.
The facility is secured by, among other things, the Company's receivables and
corporate guarantee, and bears interest at LIBOR plus 2.50%. The credit facility
contains certain covenants and undertakings that require, among other things,
that the Company maintain its listing on the New York Stock Exchange, the net
equity base will not be less than $175,000, the interest coverage ratio will not
be less than 1.3:1; the total liabilities to total assets will not exceed 65%
and the Company maintain additional free liquidity of $25,000 at the end of each
calendar month and an average minimum daily free liquidity of
$10,000.




On
November 19, 2009, the Company entered into an uncommitted Trade Credit Facility
("2009 New Trade Credit Facility") with an international commercial lender. The
2009 New Trade Credit Facility is in an amount of $100,000, with a sub-limit in
an amount of $20,000 for a short-term transit and storage financing. The 2009
New Trade Credit Facility has a one-year term. The availability of any letters
of credit, overdrafts or cash advances under the 2009 New Trade Credit Facility
is subject to the lender's discretion. The facility will bear interest at a rate
of the lender's cost of funds plus 2.0% for overdrafts. The facility is
guaranteed by the Company and is secured by, among other things, the Company's
assigned receivables and fuel oil and gas oil stored or to be stored in a
storage facility acceptable to the lender and pledged in its favor. Under the
2009 New Trade Credit Facility the maximum credit terms given to any individual
counterparty will be 45 days from the delivery of the products; the inventories
will only be financed up to thirty days from the date such inventories are
delivered to the storage facility; and the product to be stored and in transit
will be financed up to ten calendar days from the date of the bill of lading.
The New Trade Credit Facility contains covenants requiring, among other things,
that Company's minimum total net equity is at least $80,000; maintain its
listing on the New York Stock Exchange; total net equity will not be less than
$180,000; and the minimum current ratio will be 1.15 with a minimum working
capital need of $50,000and minimum cash
collateral of $5,000  at all times.




As of
December 31, 2008 and 2009, the Company had an overdraft balance of $90,000 and
$50,000 under its short-term borrowings.




Total
interest incurred on short-term borrowings for the years ended December 31,
2007, 2008 and 2009 amounted to $1,082, $7,495 and $930, respectively, and is
included in interest and finance costs, in the accompanying consolidated
statements of income. During the years ended December 31, 2008 and 2009, the
weighted average interest rate (including the margin) was 6.42% and
3.19%.




F-27
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 (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)
            
            2008
            
            
            2009(a)
            Ocean
      and Sea Global
            
            
            15,971
            
            
            
            -(b)
            Serifos,
      Kithnos, Santorini, Paros and Naxos
            
            
            30,312
            
            
            
            32,140(c)
            Milos.
      Amorgos, Kimolos, Syros, Mykonos
            
            
            31,020
            
            
            
            28,220(d)
            Eton,
      Benmore and Ingram
            
            
            14,172
            
            
            
            18,384(e)
            Tasman
      and Santon
            
            
            7,896
            
            
            
            13,817(f)
            Kerkyra,
      Ithaki, Kefalonia, Paxoi,
              Zakynthos,
      Lefkas and Kythira
            
            
            28,000
            
            
            
            48,865(g)
            Andros,
      Dilos, Ios, Sifnos and Tinos
            
            
            6,650
            
            
            
            19,811(h)
            Kassos,
      Tilos, Halki, Symi
            
            
            15,100
            
            
            
            25,300(i)
            Aegean
      III, VIII, XII
            
            
            14,500
            
            
            
            12,500(j)
            Overdraft
      facility under senior secured
              credit
      facility dated 03/16/2009 (1)
            
            
            -
            
            
            
            152,000Total
            
            
            163,621
            
            
            
            351,037Less:
      Current portion
            
            
            (9,352
            )
            
            
            (13,147
            )Long-term
      portion
            
            
            154,269
            
            
            
            337,890







(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.  On June 17, 2009, the then-outstanding balance under
      this facility was fully repaid with the proceeds of the sale of the
      vessels as described in note 8
"Vessels".




(b)
            On
      August 30, 2005, as amended, Serifos, Kithnos, Santorini, Paros and Naxos,
      as co-borrowers, jointly and severally entered into a syndicated secured
      term loan with an international bank for an amount of $35,500 to partially
      finance the construction costs of vessels DN-3500-2, DN-3500-3, DN-3500-8,
      DN-3500-9 and DN-3500-10, respectively (five tranches of $7,100 each).
      Each tranche is available in seven advances, as defined in the loan
      agreement. Each tranche is repayable in 40 consecutive quarterly
      installments, with the first 30 being in the amount of $120 each and the
      remaining ten being in the amount of $110 each, plus a balloon payment of
      $2,400 payable with the last installment. The first installment of each
      tranche is repayable three months after the date of drawdown of the
      respective delivery advance.




The loan
bears interest at LIBOR plus 1.40% during each vessel's pre-delivery period and
at LIBOR plus 1.30% during each vessel's post-delivery period. During the years
ended December 31, 2007, 2008 and 2009, the weighted average interest rate
(including the margin) was 6.73%, 4.42% and 2.22%, respectively, while at
December 31, 2008 and 2009, the interest rate (including the margin) was 3.26%
and 1.56%, respectively. As of December 31, 2008 and 2009, the outstanding
balance of the loan was $30,312 and $32,140, 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.




F-28
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise
  stated)







(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 theloan agreement. Each
      tranche is repayable in 48 consecutive quarterly installments, with the
      first 47 being in the amount of  $140 each and the last
      installment being in the amount of $100. The first installment of each
      tranche is repayable three months after the date of drawdown of the
      respective delivery advance.




On
December 19, 2006, this facility was refinanced by a term loan (with identical
terms and conditions) with the same bank under the 2006 Senior Secured Credit
Facility.




The loan
bears interest at LIBOR plus 1.15% plus additional compliance costs. During the
years ended December 31, 2007, 2008 and 2009, the weighted average interest rate
(including the margin) was 6.37%, 3.97 % and 1.61%, respectively, while at
December 31, 2008 and 2009, the interest rate (including the margin) was 2.55%
and 1.42%, respectively. As of December 31, 2008 and 2009, the outstanding
balance of the loan was $31,020 and $28,220, respectively.




The loan
agreement contains financial covenants requiring the Company to ensure that
market value adjusted net worth shall not be less than $150,000; that minimum
liquidity shall not less than $25,000; that the ratio of total liabilities to
total assets shall not exceed 0.65-to-one.




(d)
            On
      October 25, 2006, Eton, Benmore and Ingram, as co-borrowers, jointly and
      severally entered into a syndicated secured term loan with an
      international bank for an amount of $26,250 to partially finance the
      construction costs of vessels QHS-220, QHS-222 and QHS-223 (three tranches
      of $8,750 each). Each tranche is available in five advances, as defined in
      the loan agreement. Each tranche is repayable in 40 consecutive quarterly
      installments in the amount of $125 each, plus a balloon payment of $3,750
      payable together with the last installment. The first installment of each
      tranche is repayable three months after the date of drawdown of the
      respective delivery advance.




The loan
bears interest at LIBOR plus 1.30% before delivery of each vessel and at LIBOR
plus 1.1875% after such vessel's delivery. During the years ended December 31,
2007, 2008 and 2009, the weighted average interest rate (including the margin)
was 6.42%, 4.60% and 1.99%, respectively, while at December 31, 2008 and 2009,
the interest rate (including the margin) was 3.14% and 1.38%, respectively. As
of December 31, 2008 and 2009, the outstanding balance of the loan was $14,172
and $18,384, respectively.




The loan
agreement contains financial covenants requiring the Company to ensure that book
net worth shall not be less than $100,000; that the ratio of total liabilities
to total assets shall not exceed 0.65-to-one; that the current ratio shall not
be less than 1.25-to-one.




(e)
            On
      October 27, 2006, Tasman and Santon, as co-borrowers, jointly and
      severally entered into a secured term loan with a Greek bank for an amount
      of $17,600 to partially finance the construction costs of vessels QHS-221
      and QHS-224 (two tranches of $8,800 each). Each tranche is available in
      five advances, as defined in the loan agreement. Each tranche is repayable
      in 40 consecutive quarterly installments in the amount of $154 each, plus
      a balloon payment of $2,640 payable together with the last installment.
      The first installment of each tranche is repayable three months after the
      date of delivery of the respective
vessel.




The loan
bears interest at LIBOR plus 1.15% on the principal amount repayable in
quarterly installments (for each tranche: $6,160) and at LIBOR plus 1.25% on the
principal amount repayable in a balloon payment (for each tranche: $2,640).
During the years ended December 31, 2007, 2008 and 2009, the weighted average
interest rate (including the margin) was 6.42%, 4.60% and 1.69%, respectively,
while at December 31, 2008 and 2009, the interest rate (including the margin)
was 2.62% and 1.41%, respectively. As of December 31, 2008 and 2009, the
outstanding balance of the loan was $7,896 and $13,817,
respectively.




(f)
            On
      October 30, 2006, Kerkyra, Ithaki, Kefalonia, 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.




F-29
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise
  stated)


The loan
bears interest at LIBOR plus 1.15% before delivery of each vessel and at LIBOR
plus 1.05% after such vessel's delivery. During the years ended December 31,
2007, 2008 and 2009, the weighted average interest rate (including the margin)
was 6.53%, 4.22% and 1.96%, respectively, while at December 31, 2008 and 2009,
the interest rate (including the margin) was 3.00% and 1.34%, respectively. As
of December 31, 2008 and 2009, the outstanding balance of the loan was $28,000
and $48,865, respectively. The loan agreement contains financial covenants
requiring the Company to ensure that book net worth shall not be less than
$100,000; that the ratio of total liabilities to total assets shall not exceed
0.65-to-one; that the current ratio shall not be less than 1.25-to-one and that
cash and cash equivalents exceed 50% of all debts and interest becoming due in
the next 12 month period, excluding working capital facilities and
balloons.




(g)
            On
      July 5, 2007, Andros, Dilos, Ios, Sifnos and Tinos, as co-borrowers,
      jointly and severally entered into a syndicated secured term loan with an
      international bank for an amount of $37,560 to partially finance the
      construction costs of vessels DN-3800-11, DN-3800-12, DN-3800-13,
      DN-3800-14 and DN-3800-15 (five tranches of $7,512 each). Each tranche is
      available in advances, as defined in the loan agreement. Each tranche is
      repayable in 40 consecutive quarterly installments in the amount of $187
      each. The first installment of each tranche is repayable three months
      after the date of drawdown of the respective delivery
    advance.




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.




On
September 12, 2008, the Company amended the secured term loan which had entered
into on July 5, 2007, for an amount of $37,560 with an international bank to
partially finance the construction cost of vessels DN-3800-11, DN-3800-12,
DN-3800-13, DN-3800-14 and DN-3800-15. This supplemental agreement increases the
loan to an amount of $43,160.  The loan is available in five tranches
of $8,632 each. Each tranche is repayable in 40 consecutive quarterly
instalments of $216 each. The first instalment of each tranche is repayable
three months after the date of drawdown of the final advance.




The loan
bears interest at LIBOR plus 1.00%. The loan is collateralized by a first
priority mortgage over each of the vessels.




During
the years ended December 31, 2007, 2008 and 2009, the weighted average interest
rate (including the margin) was 6.06%, 4.07% and 1.86%, respectively, while at
December 31, 2008 and 2009, the interest rate (including the margin) was 3.36%
and 1.25%, respectively. As of December 31, 2008 and 2009, the outstanding
balance of the loan was $6,650 and $19,811, respectively.




The loan
agreement contains financial covenants requiring the Company to ensure that
Market value adjusted net worth shall not be less than $150,000; that minimum
liquidity shall not be less than $25,000; that the ratio of total liabilities to
total assets shall not exceed 0.65-to-one.




(h)
            On
      April 24, 2008, Kassos, Tilos, Symi, and Halki, as co-borrowers, jointly
      and severally entered into a syndicated secured term loan with an
      international bank for an amount of $38,800 to partially finance the
      construction costs of the vessels QHS-225, QHS-226, QHS-227 and QHS-228
      (four tranches of $9,700 each). Each tranche is available in two advances,
      as defined in the loan agreement. Each tranche is repayable in 40 equal
      consecutive quarterly installments plus a balloon payment of $4,300
      payable with the last installment. The first installment of each tranche
      is repayable three months after the date of drawdown of the respective
      delivery advance. The loan bears interest at LIBOR plus 1.15% and is
      secured by the first priority mortgage on the five
  vessels.




During
the years ended December 31, 2008 and 2009, the weighted average interest rate
(including the margin) was 3.84% and 2.39%, while at December 31, 2008 and 2009,
the interest rate (including the margin) was 3.54% and 1.75%. As of December 31,
2008 and 2009, the outstanding balance of the loan was $15,100 and
$25,300.




The loan
agreement contains financial covenants requiring the Company to ensure that book
net worth shall not be less than $175,000; that the ratio of total liabilities
to total assets shall not exceed 0.65-to-one; that the current ratio shall not
be less than 1.25-to-one and that cash and cash equivalents exceed
50%  of all debts and interest becoming due in the next 12 month
period, excluding working capital facilities and balloons.




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







(i)
            On July 8, 2008, the Company
      entered into a secured term loan facility with a Greek bank for an amount
      of $15,000. The facility is collateralized by a first priority mortgage
      over the vessels, Aegean III, Aegean VIII and Aegean XII and bears
      interest at LIBOR plus 1.25%. The loan is repayable in 20 equal
      consecutive quarterly installments plus a balloon payment of $5,000
      payable with the last installment During the years ended December 31, 2008
      and 2009, the weighted average interest rate (including the margin) was
      3.78% and 2.46%, respectively, while at December 31, 2008 and 2009, the
      interest rate (including the margin) was 3.24% and 1.75%, respectively. As
      of December 31, 2008 and 2009, the outstanding balance of the loan was
      $14,500 and $12,500.The loan agreement contains financial covenants
      requiring the Company to ensure that Market value adjusted net worth shall
      not be less than $175,000; that minimum liquidity shall not less than
      $25,000; that the ratio of total liabilities to total assets shall not
      exceed 0.65-to-one.




(j)
            On
      March 16, 2009, the Company renewed retroactively from February 1, 2009,
      for a period of two years, until January 30, 2011, the senior secured
      syndicated revolving guarantee and letter of credit facility that was
      signed on September 30, 2008 as described in Note 11 "Short-term
      borrowings". The participant banks are the same group of international
      commercial lenders. The amount of the facility is up to $1,000,000, for
      working capital and general corporate purposes. The renewed facility had a
      committed amount of up to $250,000 consisting of a guarantee and/or letter
      of credit line in an amount of up to $147,500 and a cash advance limit in
      an amount of up to $208,000 on March 31, 2009. The facility bears interest
      at LIBOR plus 2.50%, while documentary and standby letters of credit are
      subject to commissions of 0.75% and 1.50%, respectively.  As
      of  December 31, 2009, the outstanding balance of the loan was
      $152,000.




As of
December 31, 2009, the outstanding vessel-financing loans are generally
collateralized as follows:




·
            First
      priority assignment of the shipbuilding contracts and first priority
      mortgages over the vessels (when
completed);




·
            Assignments
      of insurance and earnings of the mortgaged vessels (when
      completed);




·
            An
      undertaking from the vessels'
manager.




The
vessel-financing loan agreements contain ship finance covenants including
restrictions as to changes in management and ownership of the vessels,
additional indebtedness and mortgaging of vessels without the bank's prior
consent as well as minimum requirements regarding the ratio of the market value
of the relevant vessel to the outstanding loan amount and the ratio of the
insured amount of the relevant vessel to the outstanding loan amount. In
addition, the borrowing companies and/or their managers must maintain working
capital accounts with the lending banks, as defined in the loan agreements.
Furthermore, the vessel-owning subsidiary companies are not permitted to pay any
dividends without the lenders' prior consent. The vessel-owning subsidiary
companies with outstanding loans had restricted net assets amounting to $(4,637)
and $(5,154), as of December 31, 2008 and 2009, respectively.




As of
December 31, 2009, all of the Company's vessels-under-construction as well as
newly-completed vessels, having a total carrying value of $239,337, 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, 2007, 2008
and 2009 amounted to $2,958, $5,384 and $8,366, respectively, and is included in
interest expense and finance costs in the accompanying consolidated statements
of income. Accrued interest expense on long-term debt as of December 31, 2008
and 2009 amounted to $480 and $318, 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 $70,217 as of December 31, 2009.




As of
December 31, 2009, the Company was in compliance with all financial covenants on
all its loans.




The
annual principal payments required to be made after December 31, 2009, are as
follows:




Amount2010
            
            
            13,1472011
            
            
            167,3302012
            
            
            15,3302013
            
            
            19,8302014
            
            
            13,3302015
      and thereafter
            
            
            122,070351,037





F-31
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 (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, 2009, the total outstanding standby letters of credit
      amounted to $139,675. 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 2010.
      The Company expects to extend the validity date of these instruments
      throughout the duration of the Company's contractual or operating
      relationships with the respective
suppliers.





(c)
            Environmental
      and Other Liabilities:The Company
      accrues for the cost of environmental liabilities when management becomes
      aware that a liability is probable and is able to reasonably estimate the
      Company's exposure. Currently, management is not aware of any such claims
      or contingent liabilities for which a provision should be established in
      the accompanying consolidated financial statements. The Company's
      Protection and Indemnity ("P&I") insurance policies cover third-party
      liability and other expenses related to injury or death of crew,
      passengers and other third parties, loss or damage of cargo, claims
      arising from collisions with other vessels, damage to other third-party
      property, and pollution arising from oil or other
      substances.  The Company's coverage under the P&I insurance
      policies, except for pollution, are unlimited. Coverage for pollution is
      $1 billion per vessel per incident.




(d)
            Legal
      MattersIn November, 2005 an
      unrelated party filed a declaratory action against one of the Company's
      subsidiaries before the First Instance Court of Piraeus, Greece. The
      plaintiff asserted that he was instrumental in the negotiation of the
      Company's eight-year Fuel Purchase Agreement with a government refinery in
      Jamaica and sought a judicial affirmation of his alleged contractual right
      to receive a commission of $1.00 per metric ton over the term of the
      contract. In December 2008, the First Instance Court of Piraeus dismissed
      the plaintiff's action. While the plaintiff's action was pending in
      Greece, the plaintiff commenced a new action involving the same cause of
      action before the Commercial Court of Paris, France, which dismissed that
      action in June 2009.  Plaintiff's appeal of the dismissal was
      denied by the Paris Court of Appeal in February 2010. The Company does
      notbelieve
      that the outcome of this lawsuit will have a material effect on the
      Company




In
January 2010, a former director of our Ghanaian subsidiary and a company
controlled by him, commenced an action in Ghana against two of our subsidiaries
for alleged wrongful termination of such director's directorship and deprivation
of an opportunity to hold 70% shares in an oil trading company and 30% shares in
a shipping agency allegedly agreed to be formed by the parties. The plaintiffs
are seeking a payment of approximately $7 million and damages for breach of
trust, extreme mental anguish, pain and suffering, and loss of
earnings.  The Company believes that the plaintiffs's claims are
unwarranted and that the outcome of this litigation will have no material effect
on the Company.




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


Various
claims, suits, and complains, including those involving government regulations
and product liability, arise in the ordinary course of business. In addition,
losses may arise from disputes with charterers and agents and insurance and
other claims with suppliers relating to the operations of the Company's
vessels.  Currently, management is not aware of any such claims or
contingent liabilities or for which a provision should be established in the
accompanying consolidated financial statements.





14.   Other
Operating Expenses:





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




Year
      Ended December 31,2007
            
            
            2008
            
            
            2009Bunkering
      tanker voyage expenses
            
            
            784
            
            
            
            2,020
            
            
            
            2,541Bunkering
      tanker insurance
            
            
            1,315
            
            
            
            1,920
            
            
            
            2,415Bunkering
      tanker repairs and maintenance
            
            
            2,958
            
            
            
            4,417
            
            
            
            3,275Bunkering
      tanker spares and consumable stores
            
            
            1,874
            
            
            
            2,747
            
            
            
            4,468Bunkering
      tanker consumption
              of
      marine petroleum products
            
            
            7,865
            
            
            
            17,796
            
            
            
            13,673Bunkering
      tanker other operating expenses
            
            
            1,862
            
            
            
            3,097
            
            
            
            20,646Operating
      cost of the Aegean Hellas
            
            
            2,930
            
            
            
            -
            
            
            
            -Cargo
      transportation
            
            
            4,466
            
            
            
            12,661
            
            
            
            5,987Provision
      for doubtful accounts
            
            
            498
            
            
            
            (27
            )
            
            
            437Storage
      costs
            
            
            2,905
            
            
            
            4,044
            
            
            
            2,971Port
      and related expenses
            
            
            1,603
            
            
            
            4,403
            
            
            
            4,713General
      and administrative
            
            
            6,609
            
            
            
            10,723
            
            
            
            14,703Broker
      commissions
            
            
            1,437
            
            
            
            2,396
            
            
            
            2,489Other
            
            
            1,936
            
            
            
            6,960
            
            
            
            1,174Total
            
            
            39,042
            
            
            
            73,157
            
            
            
            79,492








15.   Interest
and Finance Costs:





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





Year
      Ended December 31,2007
            
            
            2008
            
            
            2009Interest
      on long-term debt
            
            
            2,958
            
            
            
            5,384
            
            
            
            8,366Interest
      on short-term borrowings
            
            
            1,082
            
            
            
            7,495
            
            
            
            930Amortization
      of financing fees
            
            
            233
            
            
            
            830
            
            
            
            679Bank
      commissions, commitment fees and other charges
            
            
            1,514
            
            
            
            1,536
            
            
            
            1,823Interest
      on lease payments
            
            
            -
            
            
            
            -
            
            
            
            231Capitalized
      interest (Notes 7 and 12)
            
            
            (2,314
            )
            
            
            (2,868
            )
            
            
            (1,774
            )Total
            
            
            3,473
            
            
            
            12,377
            
            
            
            10,255





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


16.   Capital
Leases:





As
discussed in Note 8, the Company leases Barge PT 22 under a capital
lease.  The annual future minimum lease payments under the capital
lease of Barge PT 22, together with the present value of the net minimum lease
payments required to be made after December 31, 2009, are as
follows:




Amount2010
            
            $
            1,2032011
            
            
            1,2032012
            
            
            1,2032013
            
            
            1,2032014
            
            
            402Total
      minimum lease payments
            
            
            5,214Less:
      imputed interest
            
            
            (820
            )Present
      value of minimum lease payments
            
            
            4,394Current
      portion of capitalized lease obligations
            
            
            1,203Long-term
      capitalized lease obligations
            
            $
            3,191




17.   Equity
Incentive Plan:





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 vesting period. The expense is recorded in salaries, wages
and related costs in the accompanying consolidated statements of income. Aegean
is incorporated in a non-taxable jurisdiction and accordingly, no deferred tax
assets are recognized for these stock-based incentive awards.




On
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.




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 non-vested shares
outstanding for the years ended December 31, 2008 and 2009:




Unvested
      Restricted Stock
            
            
            Weighted
      Average Grant Date Market PriceAt
      December 31, 2007
            
            
            227,082
            
            
            
            15.51Granted
            
            
            153,326
            
            
            
            40.62Vested
            
            
            (82,180
            )
            
            
            20.31Forfeited
            
            
            (533
            )
            
            
            14.06At
      December 31, 2008
            
            
            297,695
            
            
            
            27.12Granted
            
            
            564,109
            
            
            
            17.97Vested
            
            
            (465,695
            )
            
            
            22.33Forfeited
            
            
            (10,500
            )
            
            
            21.54At
      December 31, 2009
            
            
            385,609
            
            
            
            24.03







F-34
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise
  stated)


Total
compensation cost of $2,863 and $3,459 was recognized and included under
salaries, wages and related costs in the accompanying consolidated statements of
income for the years ended December 31, 2008 and 2009,
respectively.





As of
December 31, 2009, there was $5,266 of total unrecognized compensation cost
related to non-vested share-based compensation awards. This unrecognized
compensation cost at December 31, 2009, is expected to be recognized as
compensation expense over a weighted average period of 2.8 years as
follows:




Amount2010
            
            
            2,2722011
            
            
            1,5302012
            
            
            1,1362013
            
            
            3062014
            
            
            225,266




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 entirebeneficial ownership of
those members of Mr. Melisanidis' family. The excess of the purchase price over
the par value of the acquired shares is reflected first as a deduction from
additional paid-in capital and, upon exhaustion of the balance of additional
paid-in capital, as a deduction from retained earnings.




Initial Public
Offering




In
December 2006, the Company completed its initial public offering in the United
States under the United States Securities Act of 1933, as amended. In this
respect, 14,375,000 shares of common stock at par value $0.01 were issued for
$14.00 per share. The proceeds of the initial public offering, net of
underwriting commissions of $14,088, and net of offering expenses of $1,953,
amounted to $185,209.




F-35
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise
  stated)


Preferred Share Purchase
Rights




In August
2009, the Company authorized and declared a dividend distribution of one
preferred share purchase right (a "Right") on each outstanding share of its
common stock.  The dividend distribution was made to shareholders of
record as of August 14, 2009.  The rights will become exercisable and
trade separately from the common stock upon the earlier of (i) ten days
following the public announcement or disclosure that a person or group (an
"Acquiring Person") has acquired beneficial ownership, or obtained the right to
acquire, 15 percent or more of the outstanding common stock  or (ii)
ten business days following the commencement of, or the announcement of an
intention to make, a tender offer or exchange offer, the consummation of which
would result in such a group or person becoming an Acquiring
Person.  In such circumstances, each right entitles shareholders to
buy one one-thousandth of a share of a new series of junior participating
preferred stock at a purchase price of $100.00.  In the event that the
rights are triggered, shareholders of record will be able to exercise each right
to receive, upon payment of the exercise price, shares of common stock having a
market value equal to twice the exercise price.  An Acquiring Person
will not be entitled to exercise any rights.  As of December 31, 2009,
no such events had occurred, and no rights have been exercised.




Dividends




The
Company declared and paid dividends of $1,705, $1,711 and $1,719 during the
years ended December 31, 2007, 2008 and 2009, 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 non-vested share-based compensation
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.




Non-vested
share-based payment awards that contain rights to receive non forfeitable
dividends or dividend equivalents (whether paid or unpaid) and participate
equally in undistributed earnings are participating securities, and thus, are
included in the two-class method of computing earnings per share. This method
was adopted on January 1, 2009 and was applied retroactively to all periods
presented.


F-36
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise
  stated)


The
components of the calculation of basic earnings per common share and diluted
earnings per common share are as follows:




Year
      Ended December 31,2007
            
            
            2008
            
            
            2009Basic
      and diluted income
            
            $
            27,738
            
            
            $
            39,915
            
            
            $
            48,525Less:
      Dividends declared and undistributed earnings allocated to unvested
      shares
            
            
            -
            
            
            
            -
            
            
            
            (386
            )Basic
      and diluted income
              Available
      to common stockholders
            
            $
            27,738
            
            
            $
            39,915
            
            
            $
            48,139Basic
      weighted average number
              of
      common shares outstanding
            
            
            42,417,111
            
            
            
            42,497,450
            
            
            
            42,579,187Add:
      Dilutive effect of non-vested shares
            
            
            88,593
            
            
            
            128,351
            
            
            
            65,261Diluted
      weighted average number
              of
      common shares outstanding
            
            
            42,505,704
            
            
            
            42,625,801
            
            
            
            42,644,448Basic
      earnings per common share
            
            $
            0.65
            
            
            $
            0.94
            
            
            $
            1.13Diluted
      earnings per common share
            
            $
            0.65
            
            
            $
            0.94
            
            
            $
            1.13




20.   Income
Taxes:




The
Company operates through its subsidiaries, which are subject to several tax
jurisdictions, as follows:




a)
            Marshall
      Islands




The
Company is incorporated in the Marshall Islands. Under current Marshall Islands
law, the Company is not subject to tax on income or capital gains.




b)
            Republic
      of Liberia




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.




c)
            Greece




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.




d)
            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.





F-37
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise
  stated)


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





While the
Company has a place of business in the United States, the Company believes that
none of its income would be treated as Effectively Connected Income under the
rules discussed above. Specifically, the Company anticipates that (1) all of its
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 the Company's foreign offices will materially participate
in such sales. Therefore, the Company anticipates that none of its income will
be subject to United States federal income tax on a net basis.




e)
            Belgium






In
October 2007 the Company completed the acquisition of BAS, a marine fuel
logistics company incorporated in Belgium.  BAS is subject to Belgian
income taxes.




The
components of BAS's (expense)/benefit for income taxes are as
follows:




Year
      Ended December 31,2008
            
            
            2009Current
      tax (expense) benefit
            
            
            (179
            )
            
            
            (30
            )Deferred
      tax (expense) benefit
            
            
            -
            
            
            
            768Income
      tax  (expense) benefit
            
            
            (179
            )
            
            
            738Effective
      tax rateReconciliation
            
            
            6.79
            %
            
            
            (67.71
            %)




The
reconciliation between effective tax rate in Belgium on income from continuing
operations and the statutory tax rate is as follows:





Year
      Ended December 31,2008
            
            
            2009Income
      tax on profit/(loss) before tax at statutory rate
            
            
            (937
            )
            
            
            862Effect
      of permanent differences
            
            
            758
            
            
            
            (124
            )Total
      tax (expense) benefitReconciliation
            
            
            (179
            )
            
            
            738




Deferred
income taxes are the result of provisions of the tax laws that either require or
permit certain items of income or expense to be reported for tax purposes in
different periods than they are reported for financial reporting. The tax
effects of temporary differences that give rise to the deferred tax asset are as
follows:




Year
      Ended December 31,2008
            
            
            2009Deferred
      tax assets:
            
            
            -Carryforward
      of notional interest deduction
            
            
            -
            
            
            
            38Tax
      carryforward losses
            
            
            -
            
            
            
            234Investment
      tax incentive
            
            
            -
            
            
            
            496Total
      deferred tax assets
            
            
            -
            
            
            
            768





In the
accompanying balance sheets, the deferred income tax assets are included in the
current assets by the amount of $170, and in the non-current assets by the
amount of $598. Of the $768 income tax benefit at December 31, 2009 that are
carryforwards, the $38 will expire in 2016, if unused. The remaining balance
does not expire. As of and for the year ended December 31, 2009, the Company has
not recorded a valuation allowance.





f)
            Canada




In July
2008, the Company completed the acquisition of ICS, a marine fuel logistics
company incorporated in Canada.  ICS is subject to Canadian income
taxes.




F-38
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise
  stated)




The
components of ICS's (expense)/benefit for income taxes are as
follows:




Year
      Ended December 31,2008
            
            
            2009Current
      tax expense
            
            
            (1,700
            )
            
            
            (891
            )Deferred
      tax expense
            
            
            -
            
            
            
            -Income
      tax provision
            
            
            (1,700
            )
            
            
            (891
            )Effective
      tax rateReconciliation
            
            
            34.14
            %
            
            
            25.11
            %





The
reconciliation between our effective tax rate on income from continuing
operations and the statutory tax rate is as follows:





Year
      Ended December 31,2008
            
            
            2009Income
      tax on profit before tax at statutory rate
            
            
            (1,631
            )
            
            
            (822
            )Effect
      of permanent differences
            
            
            (69
            )
            
            
            (69
            )Total
      tax expenseReconciliation
            
            
            (1,700
            )
            
            
            (891
            )





g)
            Other




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 were not subject to tax on shipping income. However,
the vessel-owning companies are subject to registration and tonnage taxes, which
have been included in other operating expenses in the accompanying consolidated
statements of income.




The
Company adopted the provisions of ASC 740-10-25, "Accounting for Uncertainty in
Income Taxes," on January 1, 2007. At December 31, 2009, the Company does not
have any uncertain tax filing positions. As a result, the Company has included
all of its tax benefits in its disclosure of future income tax assets and
liabilities, as discussed above. There are no significant changes to this
assessment of uncertain tax filing positions anticipated within the next 12
months.





The
Company recognizes accrued interest and penalties related to unrecognized tax
benefits as a component of income tax expense. During the year ended December
31, 2009, the Company did not recognize any interest or penalties.





The
Company files income tax returns in the Canadian federal jurisdiction and
various provincial jurisdictions, as well as the Belgian federal jurisdiction.
In the normal course of business, the Company is subject to examination by
taxing authorities. Open tax years in Canada range from 2006 to 2009, while open
tax years in Belgium range from 2003 to 2009. However, upon examination in
subsequent years, if net operating loss carry forwards and tax credit carry
forwards are utilized, the Canadian and Belgian jurisdictions can reduce net
operating loss carry forwards and tax credit carry forwards utilized in the year
being examined if they do not agree with the carry forward amount. As of
December 31, 2009, the Company was not under audit in the Canadian or Belgian
taxing jurisdictions.


F-39
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise
  stated)


21.   Accumulated
Other Comprehensive Income:





During
2008 and 2009, the Company reported cumulative translation adjustments in
accumulated other comprehensive income, arising from the translation of the
financial statements of its Euro functional currency subsidiaries into U.S.
dollars. As of December 31, 2008 the amount of cumulative translation
adjustments was $211. As of December 31, 2009, due to the sale of the vessels of
these subsidiaries, the amount of cumulative translation adjustments is
$0.




22.   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.




The
Company is domiciled in the Marshall Islands but provides no services in that
location.  It is impracticable to disclose revenues from external
customers attributable to individual foreign countries because where the
customer is invoiced is not necessarily the country of domicile.  In
addition, due to the nature of the shipping industry, where services are
provided on a worldwide basis, the country of domicile of the customer does not
provide useful information regarding the risk that this disclosure is intended
to address.





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.




23.   Subsequent
Events:





Acquisition of
Verbeke Bunkering Business.The Company has entered into
a binding heads of agreement to acquire the bunkering business of Verbeke
Shipping N.V. (the "Verbeke Bunkering Business"), including Verbeke Bunkering
N.V ("Verbeke Bunkering").  Verbeke Bunkering is a leading physical
supplier of marine fuel in the Antwerp-Rotterdam-Amsterdam (ARA) region,
including surrounding ports of Ghent, Zeebruges, Flushing, Terneuzen, and
Sluiskil.  Verbeke Bunkering operates a fleet of 18 bunkering barges,
of which nine are double hull, and provides marine fuel delivery services in
port to a diverse group of ship operators as well as marine fuel traders,
brokers and other users.





As a
result of the transaction, the Company expects to acquire seven bunkering
barges, of which one is double hull; a minority ownership interest in one double
hull bunkering barge; and a 10% and a 50% ownership interest in a double hull
bunkering barge and a newbuilding double hull bunkering barge to be delivered,
respectively.  The Company plans to use one single hull bunkering
barge as a floating storage facility and the remaining vessels in the delivery
of marine petroleum products.  The Company also expects to assume the
charters for nine vessels currently chartered-in by Verbeke
Bunkering.


F-40
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise
  stated)


23.      Subsequent
Events: (Continued)





The
aggregate purchase price for the Verbeke Bunkering Business will be calculated
based on a formula of a basic purchase price to be agreed upon, adjusted for,
among other things, the level of marine fuel inventory and provisions, accounts
receivable and accounts payable as of December 31, 2009.




The
acquisition the Verbeke Bunkering Business is subject to the completion of
detailed documentation and satisfaction of certain conditions,
including:




·
            the
      Company's satisfaction of results of legal, accounting, financial and
      operational due diligence;




·
            the
      agreement on the basic purchase
amount;




·
            the
      receipt of required consents and
approvals;




·
            the
      absence of any event reasonably likely to have a material adverse effect
      on the Verbeke Bunkering Business;
and




·
            the
      retention of existing trade and business
  financing.




In
addition, the sellers have the right to rescind the transaction if the purchase
price is determined to be lower than Euro 40.0 million, including all
adjustments for the level of marine fuel inventory and provisions, accounts
receivable and accounts payable.  Assuming all the conditions are met,
the Company expects the Verbeke Bunkering Business acquisition to close in the
beginning of the second quarter of 2010.





Purchase of a
Floating Storage Facilities.





On
October 14, 2009, the Company's subsidiary, Aegean Ostria Maritime Company,
entered into a memorandum of agreement with Aegean Gas Maritime Company, a
company owned and controlled by members of the family of Mr. Dimitris
Melisanidis, the Company's founder and Head of Corporate Development, for the
purchase of a 20,000 dwt double hull bunkering barge, the Mediterranean, used as a
floating storage facility.  The purchase price of the vessel was $17.0
million.  The purchase price of the Mediterraneanwas determined
by disinterested members of the Company's board of directors to be no greater
than it would have been with a third party on an arm's length basis at the time
it entered into the memorandum of agreement.  The acquisition was
completed on February 25, 2010. The purchase was completed by acquiring the
shares of the company owing the Mediterranean by amending the memorandum of
agreement.





On
January 14, 2010, the Company entered into a memorandum of agreement with a
third-party seller for the purchase of a 84,040 dwt double hull bunkering
tanker, the Difko Chaser (which will be renamed "Aeolos") to be used as a
floating storage facility. The purchase price of the vessel was $6.5
million.





Purchase of
Jamaican Property.  On January 14, 2010, the Company entered
into an agreement with related companies owned and controlled by members of Mr.
Melisanidis' family, for the purchase of property in Jamaica, to be used as a
land-based storage facility.  The purchase price for the property was
$9.8 million.  The purchase price of the property was determined by
disinterested members of the Company's board of directors to be no greater than
it would have been with a third party on an arm's length basis at the time the
Company entered into the purchase agreement.  The closing of the
acquisition is subject to a number of conditions precedent, including that the
Company shall have secured the necessary financing.


F-41
 AEGEAN
      MARINE PETROLEUM NETWORK INC.
 NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 (Expressed
      in thousands of U.S. dollars –
 except
      share and per share data, unless otherwise
  stated)


23.      Subsequent
Events: (Continued)





Delivery of the
Newbuildings.  On January 20, 2010, the Company took delivery
of the Zakynthos, a
6,272 dwt double hull bunkering tanker newbuilding from the Qingdao Hyundai
Shipyard in China ("Qingdao Hyundai") that bears a construction cost of
$10,852.  The Zakynthos is deployed in the
Company's service center in Gibraltar.





On
February 5, 2010, the Company took delivery of the Andros, with a construction
cost of $10,700, a 4,605 dwt double hull bunkering tanker newbuilding from the
Fujian Southeast Shipyard in China. The Company deployed the Andros to its Fujairah
service center. On March 15, 2010, the Company took delivery of the Lefkas, with
a construction cost of $10,888, a 5,500 dwt double hull bunkering tanker
newbuilding from the Qingdao Hyundai Shipyard in China ("Qingdao Hyundai"). The
Lefkas is deployed in the Company's service center in Singapore.





Shares
Offering. On January 27, 2010, the Company completed its public offering
in the United States under the United States Securities Act. In this respect,
4,491,900 shares of common stock at par value $0.01 were issued for $32.75 per
share. The proceeds of the public offering, net of underwriting commissions of
$7,355, amounted to $139,754.























SK 23250 0002 1075535
v7


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