baltic oil terminals plc  
annual re port 
and accounts 2007
baltic coverindd   2 30042008   140215


Summary:
 04
baltic oil terminals plc annual report and accounts 2007
chief executive officer’s st atement
demand for throughput 
of hydrocarbon refined 
products through 
kaliningrad has remained 
as strong as ever and we 
are therefore well placed 
to take advantage of being 
located in russia’s only 
icefree port in the baltic
introduction
2007 has been a positive and transformational year for baltic 
the company has successfully built firm operational foundations 
and established itself as one of the leading terminal operators 
in the kaliningrad region consequently the company is in 
a strong position to continue growing its operations in scale 
and scope with a 50 joint venture interest in our main asset 
the new rosbunker terminal we have moved from a “concept” 
company to a fully operating business with strong partners 
we are already expanding and improving the site with the aim 
of increasing the throughput capacity fourfold during 2008 to 
become the only deepwater terminal in the kaliningrad region
rosbunker is already fully operational and generating cash 
flows at good margins demand for throughput of hydrocarbon 
refined products through kaliningrad has remained as strong 
as ever and we are therefore well placed to take advantage 
of being located in russia’s only icefree port in the baltic
on the exploration front we have drilled two wells in the 
kurgan oblast in western siberia and have confirmed the 
presence of hydrocarbons in both we have acquired significant 
data from these wells and other geological and geophysical work 
that has been commissioned and are now looking to exploit 
the potential further by attracting interest from external parties 
rather than utilising our own funds
summary of chief executive officer’s st atement
the company is in a strong position to continue 
growing its operations in scale and scope
the second phase of the rosbunker development 
has already commenced which will enable much 
larger vessels to load when complete
w e	are	now	firmly	established	in	kaliningrad
“
”
2balar07frontindd   4 30042008   140333 unloading facilities at the rosbunker terminal
insulated pipe rack at rosbunker terminal baltysk
our stra tegy
baltic was established to capitalise on russia’s increasing 
importance as a major supplier of hydrocarbons to northern 
europe via its baltic sea ports as russia replaces the declining 
supply from the north sea 
refined product and highquality crude which cannot be 
transported from source to the port by pipeline without losing 
its integrity is delivered by rail to the port baltic is then able to 
provide terminal handling and storage services prior to shipment 
on behalf of clients wishing to export
baltic has completed the first phase of its growth plan and 
now aims to rapidly expand as a substantial hydrocarbon 
infrastructure business by becoming the largest and only 
deepwater terminal operator for hydrocarbon product export 
from the kaliningrad oblast on russia’s baltic sea coast 
the company’s objective is to generate significant operational 
cash flows to provide a recurring dividend stream to shareholders 
the increasing operational cash flows will provide scope for 
further expansion of the company’s activities
 
“  baltic has completed the first phase of its growth plan and 
now aims to rapidly expand as a substantial hydrocarbon 
infrastructure business by becoming the largest and only 
deepwater terminal operator for hydrocarbon product export 
from the kaliningrad oblast on russia’s baltic sea coast”
baltic oil terminals plc annual report and accounts 2007
05
2balar07frontindd   5 30042008   140337 06
baltic oil terminals plc annual report and accounts 2007
chief executive officer’s st atement kaliningrad
kaliningrad
demand for transhipment facilities on russia’s baltic sea coast 
is extremely high as russia increasingly bridges the supply gap for 
hydrocarbon delivery to northern europe this is mainly due 
to the declining production of the north sea and increased asian 
consumption drawing further on traditional supplies from other 
producing countries such as the middle east
kaliningrad sits in a strategically important location on the 
baltic sea coast approximately midway between st petersburg 
and denmark although separated from the main body of russia 
and surrounded by the eu countries of poland and lithuania 
kaliningrad is sovereign russian territory linked by a domestic 
rail corridor which was originally built to supply the significant 
military presence in kaliningrad kaliningrad is russia’s only 
icefree port on the baltic and lies considerably closer to the 
markets of northern europe than its equivalent ports in and 
around st petersburg
rosbunker
in july 2007 baltic acquired a 25 interest in the rosbunker 
terminal and increased this to 50 in january 2008 rosbunker 
currently has 34000 cubic metres of new tank capacity mostly 
used for the transhipment of mazut this hydrocarbon product 
which requires specialised handling and heating including 
insulated tanks and pipelines commands a premium over 
lighter refined products since july baltic’s operational 
management have been instrumental in the commissioning 
of this first phase of the terminal modifications to the original 
design have been made including the use of more powerful 
pumps and amendments to logistical arrangements at the 
terminal throughput rose to 59000 tonnes in december 
and the aim is to increase this to an average of approximately 
80000 to 100000 tonnes per month from this initial phase 
of development although measurement on a month by month 
basis is not an accurate gauge of the business and this should 
be seen on a quarterly basis as a minimum
the rosbunker terminal is situated on the baltysk peninsular 
at the mouth of the pregol river less than 18 kilometres to 
the open sea thus giving the terminal a large advantage over 
other terminals in the region that are situated 28 kilometres 
upstream within the city of kaliningrad itself
importantly the construction of rosbunker in baltysk also falls 
under the governor’s and regional administration’s policy of 
concentrating this type of infrastructure outside of the city 
limits and away from any populated areas 
the second phase of development has already commenced 
and it is planned to add a further 80000 cubic metres of 
tank capacity crucially phase two will include the dredging 
of the small distance between the rosbunker terminal and 
the main channel thereby enabling much larger vessels to load 
this coupled with the plan for lighter product handling from 
phase two should significantly increase the throughput 
capacity of the terminal 
our partner and owner of the remaining 50 of the rosbunker 
terminal is the kemerovo based kuzbazresregol group through 
its austrian subsidiary krutrade kuzbazresregol is russia’s 
largest domestic exporter of coal and already runs three of the 
largest coal ports in russia their interests are directly aligned 
with baltic’s in looking to optimise our activities from rosbunker 
and exploit further opportunities as they arise we have jointly 
established a commoditybacked sales operation in which 
we match buyers with suppliers taking a margin at the point 
of transhipment in addition to the transhipment fee itself
baltic top
in addition to rosbunker baltic owns 100 of baltic top 
a domestic terminal distribution business for the transhipment 
from rail to road tankers from the city of kaliningrad to 
elsewhere within the oblast the company has 10000 cubic 
metres of existing tank capacity has a rail unloading facility for 
up to five railcars and accepts diesel and gasoline from clients 
for storage before onward delivery throughput has averaged 
13500 tonnes per month for 2007 and continues in line with 
expectations so far baltic has reinvested the income from 
baltic top back into the business so that tanks can be refurbished 
loading facilities improved and thus waiting time minimised 
demand for additional capacity is strong and we are presently 
investigating methods by which we can capitalise on our 
favoured central location by increasing capacity by longer 
operational hours and night loading for larger customers 
2balar07frontindd   6 30042008   140337 tdkn
during the year baltic increased its interest in tdkn from 
51 to 65 for £10000 in consultation with the russian 
navy on whose land we operate we have fulfilled all necessary 
obligations that should enable the 12000 cubic metre facility 
to commence operations we believe all necessary permissions 
have already been given in writing from both the naval authorities 
in moscow and baltysk and we are currently in final negotiations 
for the commercial contract for use of the naval facilities 
whilst it has taken longer than planned to start up the terminal 
the terms being negotiated with the navy are better than those 
originally planned and will result in a better contribution to revenue 
once operations do commence we already have both suppliers 
and customers ready to use the tdkn facility as soon as we can 
start operations
polex
the polex operations on the rybachiy eight hectare site are 
satisfactory although relatively small the main thrust of our 
50 interest in polex being the site itself we have plans for 
this site that include the possible construction of either a small 
minirefinery or other hydrocarbon related business that can 
take advantage of the prime river frontage and the refurbished 
jetty already being utilised by polex we plan to expand on 
these plans during the second quarter of 2008
“  we have significant interests in three terminals two of which 
are already in operation and generating revenues”
07
baltic oil terminals plc annual report and accounts 2007
2balar07frontindd   7 30042008   140351 08
baltic oil terminals plc annual report and accounts 2007
it has been an active year 
on the exploration front 
in kurgan western siberia 
where baltic has a 5050 
joint venture but controlling 
stake with siberian 
energy group
kurgan
it has been an active year on the exploration front in kurgan 
western siberia where baltic has a 5050 joint venture 
but controlling stake with siberian energy group following 
interpretation of the newly acquired geochemical and geophysical 
data with the help of our uk based advisers rps energy baltic 
chose the first well location in the northern part of the privolny 
licence spudding this in the spring of 2007 having drilled 
to 2400 metres the well was suspended pending analysis and 
interpretation of the data with a possible view to reentry 
at a future date crucially this well encountered hydrocarbons 
at several levels
the privolny1 well provided crucial data to the determination of 
a second well location in the southern section of the moukrosovsky 
block a short distance to the north moukrosovsky1 well was 
spud in september 2007 and also drilled to 2400 metres 
a modern lightweight rig was contracted to drill this well 
which proved to be extremely challenging from an engineering 
perspective because of alternating soft sediments and harder 
volcanics consequently the planned drilling timeframe 
was extended but we were rewarded by the identification 
of hydrocarbons in several horizons with some of these 
being tested using schlumberger’s mdt
tm
 tool rps energy 
has evaluated all these data and at the time of writing baltic 
awaits their report and is considering options for further 
potential exploitation however the board of baltic has 
decided that in accordance with the information contained 
in our placement documents in case of further exploration 
the company will seek to ‘farm out’ its interest in the acreage
chief executive officer’s st atement kurgan 
“
”
2balar07frontindd   8 30042008   140351 outlook
the outlook for baltic is now very good indeed we have 
successfully overcome the initial challenges in kaliningrad and 
are now firmly established in the region we have significant 
interests in three terminals two of which are already in operation 
and generating revenues we anticipate the third to be 
online shortly
by acquiring the second 25 interest in rosbunker and its 
associated companies we appointed mr vladimir gavrilov 
to our board as chief operating officer and this is already 
improving our operational control and infrastructure we have 
merged the respective employees into one team and together 
with our partners krutrade we are working together to form 
a tight and well run team from management down to operators 
in the terminal
throughput at the rosbunker terminal should thus steadily 
increase and our other businesses in kaliningrad are also 
performing well against the continued backdrop of kaliningrad’s 
preeminent commercial position on the baltic sea and russia’s 
status as one of the world’s largest exporter of hydrocarbons 
and related products we are therefore confident of a favourable 
outcome for 2008 and longer term growth thereafter
simon escott
chief executive
9 april 2008
09
baltic oil terminals plc annual report and accounts 2007
“ the outlook for baltic is now very good indeed we have successfully 
overcome the initial challenges in kaliningrad and are now firmly 
established in the region”
baltic top terminal in kaliningrad city
unloading facilities at the rosbunker terminal
2balar07frontindd   9 30042008   140355