NESTE OIL’S QUARTERLY MAGAZINE

1.People need cleaner air everywhere. Reducing emissions is a priority in Asia.

DEVELOPMENT.

14

Check out the online versions of Refi ne’s most interesting articles at www.nesteoil.com > media > publications > Refi ne Online

2

“Food and fuels both need to be produced as sustainably as possible.”

Heidi Hautala, Member of Parliament

Leveraging sustainability to bring cleaner air.

BETTER AIR QUALITY IN ASIA.

Taking a cab IN LATVIA

In 2059 we could be fl ying to the country in our own small planes.

3

4 3 View – Editorial

4 Products – Lubricating engines

6 Market part 1: Better air quality in Asia

11 Agenda – Heidi Hautala

18 Industry 24 h Rigas Taksometru Parks

24 Column

25 NextStop – Shipping Dangerous waters

28 Future trends In the air in the 2050s

31 Q&A: What makes Neste Oil an interesting place to work?

32 Sponsorship – European Figure Skating Championships 2009

34 Meeting point Neste Oil Lahti Karisto

35 Investors

Refi ne is Neste Oil s quarterly magazine for investors, customers and other stakeholders. Published in Finnish and English.

EDITOR-IN-CHIEF HEIKKI KILANDER | EDITORIAL

OFFICE AND LAY-OUT UNITED MAGAZINES, KYNÄMIES | ENGLISH EDITION PETER HERRING | FEEDBACK TOIMITUS.NESTEREFINE@KYNAMIES.FI | PUBLISHER NESTE OIL CORPORATION, TEL. +358 10 45811, FAX +358 10 458 4442, P.O. BOX 95, FI-00095 NESTE OIL, WWW.NESTEOIL.COM | CHANGE OF ADDRESS SHARE-HOLDERS:BOOK-ENTRY ACCOUNT MANAGER, OTHER SUBSCRIBERS: MICROMEDIA OY, NESTEOIL@MICROMEDIA.FI, TEL. + 358 9-75982215 | PRINTED BY FORSSAN KIRJAPAINO | ISSN 1795-6781

We started 2008 on a strong economic upturn, and ended the year in the beginnings of a recession. Feedstock and product prices rose until the middle of the summer, after which they

fell dramatically. The international economic situa-tion has become steadily gloomier since then as well. Crude prices fell from 147 dollars a barrel in July to under 40 dollars a barrel at the end of the year. We

saw a similar trend in petroleum product prices.For Neste Oil, last year was a reasonable one,

despite the massive global economic turbulence that was seen. We continued moving ahead with implementing our cleaner fuels strategy and building a new NExBTL renewable diesel plant in Singapore. We also decided to build a similar 800,000 t/a NExBTL plant in Rotterdam, and to take part in the construction of a new base oil plant in Bahrain. At Porvoo, we decided to go ahead with an isomerization unit to upgrade gasoline fractions into higher added-valued components.

OUR CLEANER FUELS STRATEGY has seen Neste Oil become a more diesel-focused refi ner. This shift has been a success. There is a healthy demand for high-quality conventional diesel fuel, particularly in Europe and NExBTL renewable diesel is our response to growing European and global demand for biofuels capable of cutting overall emission levels.

Our strategy continues to be a dynamic one, even in the more challenging operating envi-ronment that we fi nd ourselves today. We have a series of demanding investments under way, and ensuring their success represents one of our most important goals.

In February, we decided to restructure our organization to enable us to serve our custom-ers more effectively and to give us a better base

to succeed in the future.

MATTI LIEVONEN President & CEO

”Moving ahead with our strategy.”

Tougher emissions limits are a major driver for developing more effi cient engines and lubricants. Long-lasting lubricants benefi t both the environment and engines.

LUBRICATING ENGINES

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THE DEMAND FOR SYNTHETICS is continuing to grow.

Lubricants are a blend of base oil and

performance additives. New motor oils capable

of meeting the quality requirements of today’s

automotive manufacturers can no longer be

produced from traditional mineral oil alone.

“Oil change intervals have as much as tripled

over the last 10 years, and long intervals between

changes make synthetic oil essential,” according

to Product Manager Jorma Niskala, Neste Oil.

“Major manufacturers, in particular, are

specifying the lubricants that can be used with their

vehicles in increasing detail, even down to engine-

specifi c oils, although API and ACEA standards are

still the general basis for lubricants.”

The EU’s Euro emission norms, updated every

three to fi ve years, are also playing an important

role in driving product innovation.

“Lubricant and engine technologies are moving

ahead in line with tougher emission standards.

My vision is that lubricants will soon be seen in

the same way as spare parts, like oil fi lters, and

just be replaced when cars are serviced. This will

allow drivers to forget about the whole thing.”

TEXT MAURI KAARRE | PHOTO NESTE OIL

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EXPECTING MORE OF LUBRICANTS. Metal-phosphorous-sulfur compounds are the

foundation of the additives used in lubricants to re-

duce engine wear. These compounds are a problem

for cars’ catalytic converters, however, as they re-

duce the service life of these units. As a result, it has

been necessary to reduce the amount of these com-

pounds in lubricants, despite the pressure to extend

oil change intervals, cut oil consumption, and reduce

viscosity to promote better fuel consumption.

Longlife oil keeps engines cleaner more effective-

ly and for longer than conventional oil. They also need

to take account of the big differences between some

modern engines in terms of how quickly they build

up contaminants.

Lower fuel consumption can be achieved by using

lower-viscosity oil and friction-reducing additives.

To make the use of lower-viscosity oil possible, it has

been necessary to improve the materials and surface

treatment of engine parts subject to high level

of wear and tear.

5

Neste Oil’s 300,000 t/a of NEXBASE base oil

output would be suffi cient for nearly 71.86

million new cars, assuming that cars leaving

the showroom have as much as fi ve liters of

NEXBASE base oil in their systems.

In addition to its use in motor oils and

transmission oils, NEXBASE base oil is also

used in shock absorbers, power steering

systems, locks, seat adjustment systems,

and greases. In addition, NEXBASE base

oil is also used in motor and transmission

oils for heavy machinery, industrial

lubricants, and process oils.

By the end of 2011, a new plant in

Bahrain, 45%-owned by Neste Oil, will be

producing 400,000 t/a of base oil; and

Neste Oil’s 180,000 t/a share of output will

increase Neste Oil’s total base oil capacity

to 480,000 t/a.

The NEXBASE brand is used for the

NEXBASE 3000 series of VHVI base oils

produced at Porvoo and the NEXBASE 2000

series of PAO base oils produced at

Beringen in Belgium.

THE TABLE on the left

shows examples of Neste

Oil motor oils. Details on

the Neste Oil lubricants

and automotive chemicals

best suited for different

vehicles can be found at

www.nesteoil.com, together

with recommendations for

different cars, vans, trucks,

buses, and farm machinery.

Check your manu-

facturers’ specifi cations

and viscosity requirements

from your owner’s

handbook.

CHOOSE YOUR NESTE OIL LUBRICANT

Product Typical applications Rating

Neste City Pro W Longlife III 5W-30

Volkswagen, Audi, Skoda, Seat, and Mercedes-Benz

VW 504 00 and 507 00MB 229.51

Neste City Pro LL 5W-30 Opel, Saab, BMW, and Mercedes-Benz

GM-LL-A-025 (gasoline engines) and GM-LL-B-025 (diesel engines) MB 229.3, BMW Longlife -01

Neste City Pro A5/B5 0W-30 Volvo gasoline engines (2005) ACEA A5/B5

Neste City Standard 5W-30 Ford WSS-M2C 913-B, M2C 913-A, M2C 912-A1, ACEA A1/B1

Neste City Pro 5W-40 Excellent general-purpose oil,BMW, Mercedes-Benz

API SM, ACEA C3, ACEA A3/B4MB 229.31, BMW Longlife -04

SOURCE: Neste Oil/Petri Tiainen

71,856, 287NEW CARS

Traffi c emissions are becoming an increasingly major problem in the growing cities of Asia. New alternatives are needed to replace poor-quality fuels.

TEXT JOSETTA NOUSJOKI | PHOTOS ISMO HENTTONEN

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CLEANER AIR IN ASIA

7

sible, states the ADB’s report The Road Map for Cleaner Fuels and Vehicles in Asia.

Experts expect some Asian countries to reach EU Euro-5 levels quite soon. The demand for cleaner alternative fuels produced from renewable raw materials is expected to grow in the region.

A blue sky over Beijing. Japan, the world’s second-larg-est economy, is leading the way in Asia in developing and us-ing cleaner fuels, thanks to its major domestic automotive in-dustry.

Next door, China, which is now suffering from serious pol-lution, is trying to introduce Euro-3 emission limits nation-wide. The city to benefit the most so far has been Beijing, which hosted the 2008 summer Olympics, and which has in-troduced Euro-4 limits. The city has also extended its subway system, shut down factories, restricted the use of private cars, and banned the use of older, more polluting models.

The Executive Director of the Asian Clean Fuels Associa-tion (ACFA), Clarence Woo, is enthusiastic about the speed of the action China has taken.

“Although there are still a lot of problems with airborne pollution in China, the government there has been one of the most active in Asia in cleaning up emissions. It’s a ma-jor achievement to move towards cleaner fuels as quickly as they have.” >

nine of the world’s 10 most polluted cities are in Asia. Rap-id economic growth over the last 20 or so years has in-creased the urban population in the region significantly. Millions of people have moved from the countryside to the cities in search of work.

An increasing number of city-dwellers can now afford a car, or at least a motorbike or a scooter. China has become the world’s second-largest car market, and annual car sales there are expected to pass those of the US by 2010. The number of cars on the road in India has al-so grown rapidly, and demand there is expected to continue growing.

Tailpipe emissions have also risen, and are calculated as being respon-sible for up to 90% of airborne emissions in Asia’s towns and cities to-day. In the worst polluted cities, traffic emissions are responsible for tens of thousands of premature deaths every year.

Governments in a number of large countries in Asia have tried to com-bat the problem by improving public transport and imposing limits on emissions.

Following the European lead. Many Asian countries have adopt-ed the Euro emissions reduction system in their efforts to clean up ur-ban traffic.

Fuel specifications have been progressively tightened for many years in Europe, and this approach has begun to be adopted in Asia as well.

The pace at which emissions are being cut needs to be speeded up, how-ever, according to the Asian Development Bank (ADB).

Serious air quality problems in the majority of metropolitan areas in Asia, together with the growth in the use of fuels and vehicles, mean that vehicle emissions must be cut to the lowest possible level as soon as pos-

8

> It would seem, then, that the blue skies over Beijing were not just a one-off for the Olympics, but something that local residents will be able to enjoy into the future. Air quality has also improved rapidly in Shanghai and Guangzhou.

India has also done a lot to improve air quality. The country’s larg-est cities are now aiming for Euro-3 or Euro-4 standards.

Thailand too has switched to cleaner fuels, but progress has been much slower in Indonesia and Malaysia. The latter has been trying to improve fuels to Euro-2 standards and increase the use of biodiesel, but the results have been thin on the ground. Indonesia only switched to unleaded fuels a year ago.

“The problem is that the governments in these countries have sub-sidized fuel prices, and this has not encouraged the market to come up with cleaner fuels,” says Woo. “With subsidized prices, refi neries have had to sell their products at a loss and they haven’t had the re-sources to develop better-quality fuels.”

Singapore is the world’s third-largest center of oil refi ning, and occu-pies a very central location in terms of product and raw material fl ows. As a result, Singapore is ideally placed to become Asia’s hub for biofu-els. The local government has ratifi ed the Kyoto Protocol and commit-ted itself to reducing greenhouse gas emissions from 2012 onwards.

Enough energy? Europe sees biofuels as a way of cutting green-house emissions, while in Asia the focus is on improving air quality and the energy economy, either by increasing self-suffi ciency or di-versifying imports. China, for example, is keen not to become too de-pendent on the Middle East. Biofuels production is also benefi cial in terms of employment.

Swings in oil prices and extensive oil imports impact countries’ balance of trade. In some countries, like Thailand, growing crops for use in biofuel production has been promoted to support local agri-culture.

China launched a biofuel program some 10 years ago, as one way of using the surplus cereals grown in the northeast part of the country.

“China has a sensible strategy to secure the use and production of biofuels as part of the country’s overall energy strategy. We can expect to see long-term use of biofuels there, employing second- and third-generation technology. The Chinese government recently approved a package of support for the automotive industry that promises over €1 billion of support over the next three years for developing vehicles that use alternative forms of energy,” says Woo.

Following years of research, Japan has also committed itself to bioethanol use. Hundreds of biofuel service stations are being built; and Toyota and other manufacturers are developing engines suitable for use with second- and third-generation biofuels. >

Singapore is emerging as the center of renewable fuels production in Asia.

We’ve been traveling for

24 hours when our

driver fi nally stops the

jeep. Ahead, we can

see a sign pointing to the oil palm plantation

we’re heading for. We turn off the main road on

to a sandy track.

The bumps and dips of the track give our

jeep’s shocks quite a workout, and we soon get

our fi rst view of the massive 12,169 hectares

the plantation occupies.

The plantation is divided into six estates,

with an adjoining mill. Out of estates owned by

the IOI Group, these were audited fi rst, and the

mill will soon start supplying palm oil certifi ed

according to RSPO (Roundtable on Sustainable

Palm Oil) standards.

Operations are based on natural methods

and are in tune with the surrounding

environment, while still being highly effi cient.

By further developing cultivation techniques and

introducing new strains, it will be possible

to increase yields to as much as nine to ten

tonnes of oil a hectare.

Manual work is used extensively, as are water

buffalos rather than machinery. The ground is

banked up and drained to provide the optimum

soil conditions for the palms. Routes are

deliberately left for local animals, including one

of the area’s most distinctive species,

the proboscis monkey.

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AT THE SOURCEA group of Finns recently visited a sustainably managed oil palm estates.Borneo, Malaysia, December 2008

9

Neste Oil has started construction of an 800,000 t/a plant to produce

NExBTL renewable diesel in Singapore. Neste Oil’s proprietary

NExBTL production technology can use a fl exible mix of vegetable

oil and animal fat. The company will shift towards palm oil certifi ed

by the Roundtable on Sustainable Palm Oil (RSPO) as it becomes

available in suffi cient quantities.

When completed, the plant will employ around 100 people.

THE WORLD’S BIGGEST NExBTL PLANT IN SINGAPORE

10

> Prepared for all weather. Responsibility is a feature

of all aspects of the plantation. The area is remote and

the people there are used to living a remote life. Workers are

provided with free accommodation and free electricity and

water. Children are given free schooling and health care is free

for everyone as well.

“Ensuring everybody’s wellbeing by providing things like

water, schooling, and other free services is one of our biggest

achievements in the social area,” says Jimmy Tan Giar Seng,

the IOI Group’s Sustainable Development Manager. “We also

carry out maintenance and development work in the area on

a regular basis.”

This is particularly important during the monsoon season,

which can sometimes bring fl oods. Boats are on hand if

needed. The last fl ood to cause major damage occurred in

2000. Since then, a health clinic has been opened and provides

free services to employees and their children.

“Around 30 people visit the clinic daily. Asthma and fl u are

quite common complaints, but the most common work-related

cases are small cuts,” says Nurse Mariam.

Oil is extracted in mechanical presses. The empty fruit bunches are used as fertilizer.

Seedlings are grown in a nursery alongside the plantation.

Workers live on the estatesand are provided with free housing, health care, and schooling for their children.

Mariam has lived in the area since

1968 and knows everyone on the estates.

She has helped bring 2,532 children into

the world, and is one of the most respected

members of the local community.

“Workers come to us for regular checkups,

and the company pays for all the medicine

we use. Luckily, we’ve not had any serious

accidents, but if one should take place

we’ve got our own ambulance to take people

to hospital.”

It all begins with a seed. The palm oil

from the IOI Group’s estates can be traced all

the way back to the seed of the palm that

produced it. This is guaranteed through

extensive documentation and audits at every

stage of production, from the plantation to

the mill and the customer.

1. The seed unit is the foundation of the

consistent quality achieved by the plantation,

and uses cross-pollinating techniques. Seeds

are removed from their husks mechanically

before being cleaned by hand. Samples are

taken from each batch for analysis. They are

then germinated and transferred outside to

the nursery when they are three months old.

When they reach a year old, they are ready

for fi nal planting, and two years after

that they will start producing their fi rst crop.

Palms begin bearing fruit after 30 months.

2. The nursery has around 120,000 seedlings,

which need 6-8 mm of water twice daily.

Water is taken from the nearby river, and

during the rainy season the monsoons help

as well. Mature oil palms and other crops are

planted around the area to protect

the seedlings from the elements. These

crops also provide a good habitat for

insects such as dragonfl ies, bumblebees,

and ladybirds, which keep pests at

bay. Thanks to the effi cient cultivation

methods used, the palms have a long

life and yield fruit for around 25 years.

The oldest palms on the plantation date

from 1984.

3. During planting, it is important to

use seedlings of the same age, as this

makes harvesting easier. Fertilizers and

pesticides are used, and optimizing their

levels ensures a high yield per hectare

as well as good cost effi ciency.

4. During harvesting, workers bring

down the palms’ fruit using long poles

tipped with a sharp knife, used for

cutting the bunch free of the branch.

Fruit bunches weigh an average of

18 kilos, and a branch can weigh up to

30 kilos, so workers need to keep their

distance. Branches and leaves are piled

around the roots of the palms to compost

as fertilizer. The fruit bunches are

carried away in buffalo-drawn carts to

collection points. The traceability process

begins here by separating specifi c fruit

from others. Loaders ensure that all the

fruit is collected, as each fruit contains

around 40% oil, and each bunch

between 23% and 30%.

5. At the mill, the fruit are separated and

the oil extracted in mechanical presses

and fed into tanks. The oil extracted from

the pulp is referred to as raw palm oil,

while the kernel produces palm kernel oil.

Traceable and non-traceable oil is stored

in separate tanks to ensure the integrity

of the process. The empty fruit bunches

are transported back to the plantation,

where they are used as fertilizer. The fi ber

and husks are used as fuel at the mill.

Palm oil is exported by sea and

land for use in food manufacture and by

the chemical and oil industry. •

11

After three months inside, seedlings are transformed outside to the nursery.

BIO HEATING OILLAUNCHED

12

FROM JANUARY onwards, customers have been

able to buy summer-grade Neste Heating Oil

bio-3. Available across Finland, it replaces Neste

Heating Oil 3, and contains 2% of Neste Oil’s

NExBTL renewable fuel.

Neste Heating Oil bio-3 is compatible with

current oil furnaces and other equipment without

any modifi cation, and will not increase oil con-

sumption or require additional maintenance.

The suitability of NExBTL for heating use has

been confi rmed in various fi eld studies, including

a house at the 2007 Finnish Housing Fair and a

family house in Espoo in winter 2008. Both test

houses were heated using a mixture of NExBTL

and traditional heating oil. Heating oil contain-

ing NExBTL has also worked without problems

elsewhere. Its energy effi ciency is excellent,

which means even lower emissions.

A 2% biocomponent in Finnish heating oil will

reduce the consumption of conventional oil by

the equivalent of the oil used by 10,000 family

homes. The proportion of biocomponent will be

raised on a phased basis to 10% by 2016.

Homeowners can reduce their overall ener-

gy usage by ensuring that houses are well-in-

sulated and do not ‘leak’ heat, and that hearting

systems are well-maintained. Oil heating can be

combined, for example, with solar heating, also

making it a viable option in the future.

NESTE OIL is to reorganize its operations around three business areas and seven common functions. The new structure and organization will come into force as of April 1, 2009.

The new business areas are Oil Products, Renewable Fuels, and Oil Retail . The Specialty Products Division will be consolidated into the Oil Products business area. Shipping opera-tions will be reported in connection with the business areas that use them, and the Shipping business incorporated into Production & Logistics function.The new common functions will be: Production & Logistics, Finance, HumanResources, HSE, Technology & Strategy, Communications, and Legal Affairs.

The Neste Executive Board will comprise Matti Lievonen, President & CEO; Jarmo Honkamaa, Executive Vice President, Renewable Fuels, Deputy CEO; Matti Lehmus, Executive Vice President, Oil Products; Sakari Toivola , Executive Vice President, Oil Retail; Ilkka Poranen, Senior Vice President, Production & Logistics; Ilkka Salonen, CFO; Hannele Jakosuo-Jansson, Senior Vice President, Human Resources ; Simo Honkanen, Senior Vice President, HSE; Osmo Kammonen, Senior Vice President, Communications; Lars Peter Lindfors, Senior Vice President, Technology & Strategy; and Matti Hautakangas*, General Counsel, who will act as Secretary (*not a member).

A new Neste Executive Management Board will comprise the President & CEO, business area executive vice presidents, the CFO, and the Senior Vice President, Production & Logistics.

Ilkka Salonen (M.Sc. Econ) took over as Neste

Oil’s new Chief Financial Offi cer and a member

of the Neste Oil Executive Team in January.

Salonen is responsible for corporate control

and accounting, treasury, investor relations,

corporate IT, mergers and acquisitions and joint

ventures, corporate risk management, and Neste

Oil´s business services. He was previously CFO

at Pohjola Bank.

ILKKA SALONEN APPOINTED CFO

REACH PROJECT PROGRESSESTHE EU’S NEW chemical substances regula-

tory framework, known as REACH, requires

companies to preregister the chemicals

they produce and import. Neste Oil began

preparations for the introduction of REACH

at the beginning of 2005, and has kept pace

with REACH progress since then.

REACH came into force on June 1, 2007

and covers all manufacturers and import-

ers of chemical substances across the EU.

The fi rst phase required substances to be

preregistered between June and November

2008. Full registration will take place on

a phased basis, with the fi rst registration

period ending in November 2010.

Cooperation between companies will be

important during registration, and Neste

Oil has joined or is in the process of join-

ing a number of leading European REACH

consortia.

Read more at www.nesteoil.com/

responsibility.

HSESimo Honkanen

Finance Ilkka Salonen

Production & Logistics

Ilkka Poranen

Human Resources

Hannele Jakosuo-Jansson

Technology & Strategy

Lars Peter Lindfors

Communications

Osmo Kammonen

Legal Affairs

Matti Hautakangas*

CEOMatti Lievonen

Oil Products

MattiLehmus

Renewable Fuels

JarmoHonkamaa

Deputy CEO

Oil Retail

SakariToivola

Common functions

Business AreasNeste Executive

Board as of 1 April 2009 Neste Executive

Board as of 1 April 2009

*Secretary to the Neste Executive Board, not a member

*Secretary to the Neste Executive Board, not a member

THREE BUSINESS AREAS

13

news

NESTE OIL RECOGNIZED FOR ITS ENERGY AND ENVIRONMENTAL EXCELLENCENESTE OIL has received Hart Energy’s 2008

Global Energy and Environmental Excellence

Award in the Alternative Fuels category.

Hart Energy’s awards recognize companies

that have made signifi cant progress towards

solving global energy challenges through

their innovation and technology. Winners

were selected by a panel of 100 industry

leaders in sustainable energy solutions

from across the globe.

The award was granted during the Energy

Solutions Conference 2008 held in Houston in

November, which brought together leaders

from industry, government, and the academic

work to discuss smart solutions for today’s

global energy challenges.

“With the widening gap between energy

supply and demand, the need for sustainable

resources is more urgent than ever,”

said Kristine Klavers, Vice President,

Hart Energy Consulting.

NESTE OIL took fi rst place in the competition arranged by OMX NASDAQ Helsinki for the best IR Web site in the large cap sec-tor in 2008. KONE and Kesko placed second and third respec-tively. The competition reviewed the IR sections of the Web sites of all listed companies in Finland, and the results were an-nounced in January 2009.

Particular emphasis was given to how business risks and long-term fi nancial targets and progress on reaching them are present-ed, and how companies present their debt liabilities and report on mergers and acquisitions. The competition was organized by the Finnish Foundation for Share Promotion, the Finnish Society of Financial Analysts, and the business magazine, Talouselämä.

NESTE OIL also took fi rst prize for the best corporate Web site in Finland and the Nordic region in 2008 in a study by Hall-varsson & Halvarsson Webranking, an established internation-al yardstick for company Web sites. The Neste Oil site scored 84.25 points out of a possible 100.

Hallvarsson & Halvarsson described Neste Oil as having made major improvements since 2007, resulting in a site that is com-municative and full of the type of information required by the capital market. The site received high scores in every aspect of the survey, and was especially strong in respect of fi nancial and share-related information. Neste Oil was praised for understand-ing the importance of good online communication.

TWO GOLDS FOR NESTE OIL’S WEBSITES

14

Back in the 1970s, Heidi Hautala was one of the group that founded the Kasvis vegetarian restaurant and sustainable

lifestyle center in Helsinki. The restaurant played an active part in environmental debate in Finland promoting a vegetarian life-style during its 25-year existence. In 2007, Hautala published a cookbook entitled ‘Rehellistä ruokaa’ (Honest Food).

A member of the Finnish Parliament and a strong advocate of the need for a better environment, Heidi Hautala actively pro-motes the adoption of sustainable values in all aspects of produc-tion and consumption, from food to fuel. She sees responsibility as all-embracing, and believes that highlighting issues is essential for making things happen.

Check out the online version: www.nesteoil.com > media > publications > Refine Online

Both food and fuel should be produced sustainably. And people should be willing to discuss the choices they make and why, says Heidi Hautala.TEXT MINNA TAKKUNEN | PHOTOS KARI HAUTALA

Age

nda

“The energy needed to produce the food we eat, transport it, and use it can be ana-lyzed by looking at its life cycle. Consumers can make their own contribution when they have access to the information they need to make informed choices. The concept of vir-tual water is used to understand things like how much water is need to produce a kilo of coffee, for example. Similar models can be used to assess the relative overall econ-omy and ecological footprint of different types of biofuels.”

People clearly want to be able to shape human impact on the environment, Hau-tala believes. Climate change, for example, has become a widespread subject of discus-sion among the man and woman on the street in recent years.

“Even to the extent that people who ques-tion climate change as a phenomenon flu-ently talk about things like carbon foot-prints and so on,” she laughs.

“It’s important to remember that anyone making life cycle claims about sustainable production and consumption must be able to back them up, otherwise they’ll be caught out for ‘greenwashing’ the issue.”

MAKING YOUR OWN CHOICES. Travel, liv-ing, and eating are all areas where people can contribute to a better environment.

“One sign of this in Helsinki is that peo-ple are warming to the idea of congestion fees on the city’s roads.”

A city girl, Hautala does not own a car and does not drive.

“I’ve just never got round to owning a car, and during the last couple of winters I’ve biked to Parliament as we haven’t had much snow.”

POLITICIANS DECIDE. While consumers have become more responsible in their choices in recent years, Hautala is disap-pointed that politicians have been less pro-minent here, compared even to the corpo-rate sector.

“Political decisions have not been all that significant in the final analysis. Politicians are the ones who should be creating the foundation for a more responsible society, and should make more use of economic in-centives, such as taxes and charges. But al-though national legislators are proving slow, decisions taken at EU level are having an impact.”

The EU’s decision to mandate increased use of biofuels in traffic and transport rap-idly, to 10% by 2020, could put the princi-ples covering the sustainable production of fuels under threat, however. >

Heidi Hautala

Born_1955

Education M.Sc. (Agr.)

Career_Founder of the Kasvis

vegetarian restaurant in 1974;

Chairman of the Green

League of Finland, 1987–1991:

Member of the European

Parliament, 1995–2003;

Finnish MP, 1991–1995, 2003–;

Chairman of Parliament’s

Legal Affairs Committee

2007–; Chairman of Neste Oil’s

Supervisory Board, 2008–.

Family_ Adult son

Hobbies_Exercise, reading,

nature

Motto_ “Even if the world’s

going to end tomorrow, I’ll

plant an apple tree today.”

15

“PEOPLE WANT TO BE ABLE TO SHAPE HUMAN IMPACT ON THE ENVIRONMENT.”

“CLIMATE CHANGE IS SOMETHING EVERYONE IS TALKING ABOUT TODAY.”

16

“Neste Oil has the world’s best and most

environmentally friendly end-product in the

industry, in the shape of its NExBTL

renewable diesel, when it comes to

production technology, quality, and tailpipe

emissions. But it needs to get out of the

food chain rapidly in terms of the inputs it

uses for this,” says Heidi Hautala.

During her time as a member of the

European Parliament, Hautala’s initiatives

succeeded in getting a number of important

changes made to legislation on the quality

of traffic fuels that have reduced air

borne emissions in Europe. Sulfur content,

for example, has been cut.

As Chairman of Neste Oil’s Supervisory

Board, she sees discussions with opera-

tional management on how the company

can further promote its environmental

contribution as an integral part of the job.

“Neste Oil has pioneered the development

of things like a certification system for palm

oil. The company’s expertise and long

traditions will not be sufficient to guarantee

that things will take place as environmen-

tally as they should, though.”

Protecting rainforests will call for multi-

lateral political decisions, and politicians

need to be brought more into the mix if we

are to achieve a greener future, she says.

“I’m currently involved in trying to ensure

that the UN Commission on Sustainable

Development creates an international

process for managing the indirect impact on

land use of growing the raw materials used

in producing biofuels.”

Hautala believes that Neste Oil’s manage-

ment is both willing and able to listen to

criticism and engage in dialogue with orga-

nizations such as Greenpeace. She says that

the company has been unfairly criticized on

some environmental issues, as it is committ-

ed to striving for sustainable solutions, such

as finding alternatives to palm oil and using

waste streams to produce renewable diesel.

Hautala has been impressed by Neste

Oil’s continued efforts to develop more pro-

environmental products, and that its lead

has been followed in areas such as product

specifications elsewhere in Europe.

“The sustainability criteria used for bio-

fuels should be the same for everyone, whet-

her we’re talking about raw materials grown

in Europe or imported from elsewhere.

“Sustainable energy solutions could well

generate a success story in Finland that’s

up there with the Nokia one,” she says. •

GREENER ROUTES. “Biofuels for traffic and transport are just one part of a greener approach,” says Hautala.

Development work also needs to be done on vehicles, engines, and tailpipe emission systems. In addition to the right technology, chang-es also need to be made in zoning and city planning.

WHO’S GOING TO FIND THE ALTERNATIVE? Heidi Hautala is sur-prised how lightly food manufacturers using palm oil have been let off in the debate about its use.

“Food manufacturers still use 90% of the world’s palm oil, although more is being used in fuel production. We need more of a combined debate about how the fuel we use and the food we eat is produced.”

Palm oil can be found in a surprising wide range of foods, includ-ing margarine, potato chips, and cookies. The unhealthy nature of the product is not given the attention it deserves, says Hautala.

The impact of biofuel production could have a serious impact on ag-riculture in developing countries if crop prices rise, and this could re-sult in political unrest.

“Not long ago, I saw that a Scottish company is producing ‘orangu-tan-friendly, palm oil-free’ cookies, which shows that food manufactur-ers are perhaps beginning to wake up to the real issues.”

Oil palms are cultivated extensively in Indonesia and Malaysia. Some operators especially in Indonesia have become notorious for felling rainforest to make way for oil palm plantations. One of the organi-zations striving to introduce sustainable principles in the field is the Roundtable on Sustainable Palm Oil (RSPO). Neste Oil is a member of the RSPO and has committed itself to an alliance calling for a ban on felling rainforest.

NExBTL DIESEL IS THE WORLD’S BEST END-PRODUCT

“ALTERNATIVES TO PALM OIL ARE NOW BEING INVESTIGATED.”

WTI Price US$ per barrel

60

0

20

80

40

100

120

21 28 42 55 60 61 65 71 78 78 87 114

17

TWO THIRDS have been shaved off the record crude prices we saw last year. Gasoline prices, even in Finland, have dropped to their lowest in three years at times. Diesel fuel, which is less heav-ily taxed, remains a lower-cost choice, although the differential with gasoline has narrowed. Consumers in many countries where demand for petroleum products has grown the most in recent years did not have to pay high prices last year because of local subsidies. The ability of states to fund these subsidies was begin-ning to run out, however. The rapid drop in crude prices since then has elimi-nated the need for subsidies in China, for example.

The drop in crude prices has benefi ted the current accounts of major oil import-ers, such as the US, Japan, and countries in the Euro zone, but have the opposite ef-fect for oil exporters. All of the latter have suffered, but those with large populations, extensive social programs, and economies heavily dependent on oil, such as Vene-zuela and Iran, have been hit the most. The tax revenues derived also from oil and gas play a large part in the Russian economy. Abu Dhabi, Norway, Kuwait, and Russia have set up large funds to ‘bank’ revenue during periods of higher prices to insure themselves against bad times.

oil market

THE MINIMUM CRUDE PRICE REQUIRED FOR NEW UPSTREAM INVESTMENTS: Many projects have already been cancelled because of low crude prices, high costs, and diffi culties in getting the fi nance needed. The calculations are based on crude prices, current tax rates, and a 15% return on capital.

http://epp.eurostat.ec.europa.eu/eurostatNews and statistics on energy consumption in Europe.

www.cera.comResearch on the world’s energy markets and energy industry from Cambridge Energy Associates.

www.globaloilwatch.comUS energy market research, information on prices, consultancy services, investments, and jobs.

Q1: low prices and a low level of investments

Specialists: Pekka Purho, Heikki Sierla

FEELING THE DOWNTURN

CHEAP OIL – A GOOD THING OR A BAD THING?

USD 75/bblSaudi Arabia’s target price

for crude, “good for both buyers and sellers”

Chi

na

Saud

i Ara

bia

Liby

a

Mex

ico

UK

US

deep

wat

er

Bra

zil

Ango

la

Nig

eria

Can

ada

oil s

ands

(IN S

ITU

)

Vene

zuel

a

Can

ada

oil s

ands

(OPEN

MIN

E)

SOURCE: Cambridge Energy Research Associates

CRUDE PRICES were moving up rapidlythis time last year. There was a shortage of oil on the market, inventories were down, and OPEC had refused to boost producti-on, despite numerous requests to do so. The fi nancial crisis was limited to the US, and oil demand estimates were mo-ving up. By the beginningof 2009, crude prices had dropped to a third of the record level of nearly USD 150/bbl seen in 2008 and there is little likelihood they will recover much, given the state of the global economy. Inventory levels are high and demand on the decline.

Political developments pushed crude prices up to slightly over USD 50/bbl at the very beginning of the year when Russia

cut off gas supplies to Ukraine and Israelattacked Gaza. Prices fell back closer to USD 40/bbl during January. The economicdownturn is continuing to eat into demand,

and experts are predict-ing negative growth in many countries. Econo-mic growth in Asia is alsobeginning to falter; oil de-mand there is still grow-ing, but at a slower rate than in recent years.

The production cuts made by OPEC have not

really affected prices. The cutbacks introdu-ced at the beginning of this year will make their impact felt later. The danger is that the decline in demand will only accelerate,putting more pressure on producers. OPECappears ready to make further cuts.

18

The tires of our taxi squeal on the cobblestones of Riga’s main thoroughfare, Brivibas iela, as we head for the depot of the country’s largest taxi company in the winter rush hour.

TEXT HANNELE NIEMI | PHOTOS PEKKA HOLMSTRÖM

“TRUSTWORTHY. TAKE CREDIT CARDS.

AND FRIENDLY DRIVERS TOO.”

19

industry

The air in the depot in one of the city’s suburbs is thick with a wall of steam that makes you catch your breath as you step inside. The building is full of the company’s own red taxies and other vehicles being washed. Eve-

rybody on the building’s two wash lines is busy in the middle of the winter.Sergejs Vojtenko has worked for Rigas Taksometru Parks (RTP) since

1986 and can always depend on getting a clean car when he arrives to start his shift. The driver coming off the previous shift has already checked that the car’s papers are in order, that everything is running as it should, and that it has a full tank of gas.

Most of the cars have two drivers. Four would be ideal, as it would make shifts easier to organize.

“It’s tough to fi nd good drivers, though,” says RTP’s Technical Manag-er Kaspars Muiznieks. The majority of drivers, like Vojtenko, are Russian-speakers. Drivers need to be able to speak Latvian and Russian, and at least basic English.

A neat appearance is also important.“We don’t expect drivers to wear a suit, but a white shirt is essential,” says

Muiznieks, who recently took over running the company from his father, Leopolds Muiznieks. Kaspars himself prefers a suit at work, while his father is happiest in shirtsleeves these days. >

KA

SP

AR

S M

UIZ

NIE

KS

20

> A TAXI IN 10 MINUTES. Rigas Taksometru Parks has been in the taxi business in Latvia’s capital, Riga, since 1948. When Latvia regained its independence in 1991, state ownership inherited from the Soviet system passed to 400 shareholders.

Today, Latvia’s largest taxi company is known not only for the dis-tinctive red color of its cars, but also the reliability of its service. Win-ning and keeping a good reputation calls for a lot of work, as the taxi business is full of shady operators.

“Rates are pretty much standard, so the only way to grow is to de-velop the service you offer. We put the customer first every step of the way,” says Kaspars Muiznieks.

The company is currently testing a new satnav system, and the goal is to ensure that nobody has to wait more than 10 minutes for their ride to arrive.

The company’s ISO 9001:2000 certificate is another guarantee of quality service.

EXPERIENCE AND YOUTH. Kaspars Muiznieks joined his father’s com-pany from Renault, where he worked as a customer service manager. He is a skilled mechanic, but running a taxi company is much more

than just keeping the cars on the road.The current economic downturn has hit Latvia hard, and no one

really knows what is still to come. The number of taxis in Riga has already fallen from 1,700 to 1,300. There are 78 taxi companies in the city, and the competition is tough. RTP has seen a 30-40% drop in its private customers, but its some 600 corporate customers have stayed with the company.

In addition to over 200 taxis, Riga’s largest taxi company also has 121 minibuses and 15 buses on its books. The taxis are either Ford S-Maxes or Renault Megane Scenics.

“It would be difficult to be a credible business with less vehicles,” says Kaspars.

Father and son review how things are going daily. Leopolds’ experi-ence as a bus driver and director are invaluable for Kaspars.

The company could well change its brand name for taxis in the fu-ture, as RTP is too easily confused with other, less reputable compa-nies. One alternative could be Red Caps, according to Kaspars.

The company will keep its distinctive red color, though. It is easy for people to pick out the company’s cars on the street and helps en-sure that they stay safe as well. >

Marina Trofimenko, who is one of the team on the company’s phones, has been with RTP for 36 years.

Drivers always get a clean car at the start of their shift.

2121

ASK THE DRIVERAlmost 1 million of Latvia’s population of

around 2.3 million lives in Riga. 60% of the

population are Latvian-speakers and 35%

Russian-speakers, and Lutheranism is the

dominant religion.

Taxi drivers are often the best local guides

wherever you go, although understanding what

they say or getting yourself understood can be

a problem sometimes.

It always pays to break the ice, with a joke or

a positive comment about Latvia winning the

Eurovision Song Contest back in 2002 when you

are in Riga

“Ice hockey’s also popular here,” says Ilze

Perkone, who works for Neste Latvia, and says

that the local fans are famous for kicking up a

storm. She says it is probably because of the

fervor teams generate among their supporters.

Normally, Latvians are pretty reserved, if not

downright quiet, she adds.

It’s the same thing with the song and dance

festival that’s held here every four years.

People get carried away with the atmosphere.

After all, Latvia’s been ruled by outsiders for so

much of its history that people need to let off

steam every so often.

Latvians are also a proud people, proud of

things like the tens of kilometers of sandy

beaches at Jurmala. It’s the ‘Riviera’ of the

Baltic, and the prices there have really gone up

in recent years, making it popular with the rich

these days.

Another reason to visit Latvia is the low

price of fuel compared to many other places

in Europe. Diesel was selling at 83 eurocents

a liter in January, and 95E gasoline at

75 eurocents.

22

> THREE MILLION LITERS OF FUEL A YEAR. Rigas Taksometru Parks is Neste Oil’s largest single customer in Latvia. The two companies be-gan working together in 2003. RTP buys all its fuel from Neste Latvia, both diesel and 95E gasoline – in all around three million liters.

Both RTP and Neste Latvia are satisfi ed with the arrangement. Only one setback has occurred over the years, and that was when 15 buses fi lled up with summer diesel by mistake and did not get very far, but the problem was quickly solved, and neither side have looked back since.

Other companies are keen to get the contract to supply the coun-try’s largest taxi company.

“One even went so far as to ask how much money we wanted to switch to them,” laughs Leopolds Muiznieks.

“We don’t want money, we want quality fuel, I said.”Neste, as it was then, entered the Latvian market in 1990 when the

Soviet Union collapsed, initially through a joint venture with a local partner. The joint venture opened its fi rst service station in 1991, the year Latvia declared its independence.

Today, Neste Oil has 16% of Latvia’s oil retail market and sells 180 million liters of fuel annually. Its 49 unmanned A24 stations, of which 19 are located in Riga, include coffee shops and other operations man-

aged by the company’s partners.Neste Oil’s petroleum product sales in Latvia total around 300 mil-

lion liters annually, and give Neste Latvia a 10% market share and net sales of €250 million. The company employs 65 people.

Christian Hällund, who heads up Neste Latvia, says that there are few, if any major differences between Latvia and other European coun-tries from a consumer perspective.

“Customers everywhere want quality fuel reliably and good prices.”

KEEPING TABS ON EMISSIONS. New environmental legislation is cur-rently being drafted in Latvia. Mandated biofuel usage will probably come into force in 2010.

“And we’re ready,” says Hällund.Rigas Taksometru Parks is also interested in environmental issues,

but the complicated regulations covering the fi eld and the high cost of more environmentally friendly systems are problems.

“We aim to service our vehicles as well as possible, and monitor emissions levels as well,” says Kaspars Muiznieks.

Leopolds adds that the mechanics that work on the company’s ve-hicles often ask where RTP buys its fuel, “because they’re always in such good condition!” •

THE CITY’S RED TAXISTourists are regularly advised

to choose the city’s red taxis on

Internet sites about Latvia.

Typical comments include:

“You can trust them, and you can

pay by credit card as well. They’ve

got friendly drivers too.”

Rigas Taksometru Parks’ taxis

can be called on (+371) 800 1313,

and the fee from the airport to

the city center was from eight

to 10 lats, or around €13,

in the beginning of the year.

CH

RIS

TIA

N H

ÄL

LU

ND

23

NATURAL GAS EXERCISE AT PORVOO

A new teaching laboratory chris-

tened ‘Gadolin’ has been opened at

the University of Helsinki’s Kumpu-

la campus to introduce young stu-

dents to chemistry. “The emphasis

is less on theory and more on

practical empirical work, and the

aim is to encourage young people’s

interest in science and help them see the signifi cance of

chemistry in modern life”, according to Neste Oil’s Alpo Toivo.

Neste Oil will be the lab’s main sponsor between 2008 and

2011, and will work with its other sponsors, including the

University of Helsinki’s Department of Chemistry, chemical

companies, the Chemical Industry Federation of Finland,

teaching material producers, equipment manufacturers, and

schools and colleges.

GADOLIN STARTS UP

A DESK-BASED EXERCISE was held at the Porvoo refi nery at the beginning of December to test how Finland would react if the country’s natural gas supply were interrupted. The exercise test-ed the effi cacy of backup fuel systems and focused on the im-pact that a cut in supply would have on gas users and backup fu-el sourcing and deliveries.

The exercise was arranged by the National Emergency Supply Agency, and included 50 participants from gas company Gasum, municipal heat and energy utilities, oil companies, energy com-panies and the Finnish Oil and Gas Federation.

The exercise simulated a situation in which the supply of natu-ral gas from Russia was interrupted for seven days in the middle of winter. The primary backup fuel was heavy fuel oil, followed by heating oil and LPG. One of the alternatives looked at was increasing the use of electricity for heating purposes.

“The critical locations in terms of heating would be hospitals, schools, and day care centers heated by natural gas-based dis-trict heat. The exercise was designed to help participants see the problems that a cut in supply would create for everyone in the chain: for Gasum, Neste Oil, backup fuel suppliers, and district heating plants. As a key backup fuel supplier, Neste Oil is the second one in the chain after Gasum,” according to Risk Man-agement Manager Teppo Luoto from Neste Oil.

NESTE OIL has been selected again for the Global 100, a list of the world’s 100 most responsible companies, based on an analysis

of 1,800 publicly traded companies by Innovest Strategic Value Advisors. The Global 100 includes companies from 15 coun-tries encompassing all sectors of the economy.

The companies included in the Global 100 are considered to have developed the best capabilities in their respective in-dustries to manage environment, social, and governance risks, and to take advantage of new business opportunities in these areas. In addition to Neste Oil, Kesko, Nokia, Stora Enso and Wärtsilä from Finland are featured in the list.

THE GLOBAL 100 -LIST

news

Ari Laine from Helsinki Energy is seen here presenting the results of the exercise to participants.

24

| P

HO

TO

SU

VI

LA

INE

Petteri Aaltolainen, Artist, art teacher

Early education plays an important part in creating the visionaries

of tomorrow by developing and encouraging children’s imagina-

tion. Children have an inbuilt ability to enter the world of play and

fantasy wherever they fi nd themselves, through the door their

imagination gives them.

Imagination acts as a mode of thought and social interaction

for children as they develop; and parents can often see how their

children process their experiences through play.

When brothers or sisters or other children are part of play, some

friction is inevitable, as children’s own imagination is such a key

factor. A strong awareness of self, the ability to distinguish oneself

from one’s environment, develops with time into will and drive.

What kind of a father am I? My goal is to encourage my youngs-

ters on the start of their journey into their imagination in their

games. In my own imagination, I’m always accompanied by reality,

and shaped by the fl ood of information that surrounds us today.

“Is that really how things are?”, I ask myself when I listen to

the latest news about the economic downturn. Thinking positively

is one way of retaining one’s belief in the future and the future

of one’s own work.

Walking the same streets every day, I sometimes wonder what

was the point at which I stepped out of the world of the child.

Or have I? As a creative person, I know how important it is to feed

my imagination regularly. I build images of my thoughts, including

seemingly quite impossible ones, as a way of structuring reality.

Imagination is very much about discovery. Everybody has the

chance to discover something new. Take people working on new

forms of energy or fuels for tomorrow. You need a good imagina-

tion there if you are to imagine solutions that might seem like very

distant visions when you start off.

We encounter many different types of creativity in our day-to-day

lives. All of us do. And that’s why we shouldn’t be afraid to experi-

ence our own creativity. The possibility – and joy – of discovering

something is a very powerful force for driving us forward.

LOOKING FOR NEW IMAGINATION

Nex

tSto

p

Today’s pirates attack ships on the high seas using zodiacs and other high-speed craft. If crews resist, the guns come out.

Over 280 ships were attacked by pi-rates in 2008, many off the northeast coast of Af-

rica in waters transited by some 20,000 ships annually.Modern-day pirates attacking commercial vessels make use of

modern technology and weapons. In addition to pirates in light craft near the coast, fi shing vessels have also been pressed into pi-rate service. The biggest and most well-organized gangs use larger ships as bases from which to strike potential targets.

Maritime piracy is currently at its worst off the coast of Soma-lia and in Nigerian waters.

WATERS

TEXT SATU RÄMÖ | PHOTOS LEHTIKUVA, ANU AKKANEN

25

Dangerous

“The pirates operating off Somalia appear to be pretty well-organized. Those attacking from the coast seem to have detailed informa-tion on what ships are carrying and their time-tables. They’re well-armed as well, and ready to use their weapons,” says Tuomas Routa of the Finnish Maritime Administration.

In many cases, both crews and cargoes are seized. Pirates typically demand ransoms run-ning into tens of millions of euros for their re-turn. Meeting these demands is often the only way of guaranteeing their safety and return.

SHADY BUSINESS. Cyrus Mody of the Inter-national Maritime Bureau (IBM) prefers not todescribe these modern-day pirates as terrorists.

“Terrorism is about threatening govern-ments and infl uencing high-level decision-making. All pirates are interested in is money.”

The most successful show it off too, with big houses and lots of bling. The money made by piracy is also channeled into various forms of shady business.

TENSION OFF ADEN. Piracy can fl ourish wher-ever the local police, coastguard services, or navies cannot guarantee the safe passage of ships. The worst place for piracy at sea before the millennium was Southeast Asia, but the region is now much more peaceful. A partic-ular hotspot for piracy on the high seas in re-cent years has been the Gulf of Aden, between Yemen and Somalia.

Somalia spiraled into chaos at the begin-ning of the 1990s, and interim governments have lacked the muscle to control extremists in the central and eastern parts of the coun-try. This has created fertile ground for the rise of piracy.

The IMB says that piracy is a major problem

26

“HUNDREDS OF PEOPLE WERE TAKEN HOSTAGE IN 2008 AND

AROUND 10 WERE KILLED.”

Naval vessels from 14 states currently patrol the waters in the Gulf of Aden. A French Panther helicopter can be seen here taking off.

2727

PIRATES AHOY!

“The best way to avoid being attacked

by pirates is to keep a comprehensive

round-the-clock watch. Ships can

protect themselves with barbed

wire and water cannons. If pirates make it

on board, however, the only choice is to

surrender peacefully.”

That is the advice of Captain Petteri

Tolvanen of the Stena Poseidon, who recently

returned to the Finnish winter and Neste Oil´s

Shipping Division’s offi ce in Espoo from Suez.

The Stena Poseidon’s voyage from Kuwait to

Europe was an unusual one for the tanker, as

the vessel and its 19-strong crew normally

carry gasoline between Europe and North

America.

“The risk of being attacked by pirates in the

Gulf of Aden is a very real one. We saw one

pirate vessel at close quarters during our

passage. The trip went without incident,

though, as the Atalanta operation had just got

under way, and we were escorted through the

most dangerous area by EU naval vessels.”

Petteri Tolvanen has been at sea for over

20 years, the last fi ve as a master. The Stena

Poseidon, which fl ies the Finnish fl ag, is

an important part of Shipping’s fl eet of

tankers that carries some 40 million tonnes

of crude oil, petroleum products, and

chemi-cals annually. A typical crossing

from the refi nery at Porvoo to New York or

Montreal takes around 14 days.

“I’ve never come face to face with pirates

yet, and luckily none of my colleagues have

either,” says Tolvanen.

Ships need to be ready, however. Control

Risk, a company that specializes in dealing

with piracy and other risks, has trained

Shipping’s crews, and the ISPS Code covering

safety on board and in ports issued

by the IMO includes instructions on how to

deal with piracy.

Keeping a close watch on the waters around

a ship is essential, says Tolvanen. Although

radar can detect even very small craft in calm

weather, it is important to supplement this

with old-fashioned lookouts, he says.

If the worst happens and pirates succeed in

getting on board, the key thing is to stay calm.

“Pirates are interested in money, and a

dead seafarer is not worth anything. But

joking aside, the best policy is to stay as calm

as possible and do what they tell you to do, and

nobody will get hurt.”

The Gulf of Aden is not on Neste Oil’s

regular routes. Crude oil is generally carried

in the Baltic and the North Sea, and products

in Northwest European waters. Gasoline is

also shipped across the Atlantic, to the US

and Canada.

in many coastal areas around the world today.“Hundreds of people were taken hostage in

2008, and around 10 were killed. It’s estimat-ed that there are around 1,200 pirates operating in Somali waters alone,” says Cyrus Mody.

In addition to a base in London, the IMB also has offi ce in Kuala Lumpur. Seafarers can contact the offi ce there for assistance around the clock. Ships’ masters report attacks or at-tempted attacks to the Kuala Lumpur offi ce, and a regularly updated map on the Internet shows the current state of ‘play’.

PIRACY NEEDS TO BE SOLVED ON LAND.

“The underlying problems in Somalia are a weak government and tribal confl icts. Elimi-nating piracy needs to take place by establish-ing peace on land fi rst, and this will take time in the worst areas. The international commu-nity will have to bear responsibility for safety at sea until then,” continues Cyrus Mody.

Tuomas Routa of the Finnish Maritime Ad-ministration agrees.

“This is a major international issue. The prob-lem is on the high seas, but the solutions must

take place on dry land. Humanitarian aid and political and other assistance will be essen-tial in the case of Somalia. The UN Securi-ty Council is already looking at the best way forward.”

Until the Somali situation is brought under control, a naval presence in the region will be essential to guarantee the safety of commer-cial shipping. Using naval power in this way is very rare.

CRISIS ASSISTANCE FROM THE EU. The EU launched the Atalanta operation in December 2008 aimed at countering piracy and protect-ing commercial and other shipping carrying food aid to Somalia. The Atalanta initiative covers an area stretching from the Red Sea to the Indian Ocean roughly the size of the Baltic.

“These kinds of military operations are on-ly temporary solutions. If it proves impossible to get the situation in Somalia under control, there’s a danger that it could spread to other areas. Criminal activity always looks for new outlets,” continues Routa.

Atalanta is the EU’s fi rst military crisis in-itiative to be mounted at sea. Finland is also involved.

“EU member states take part on a rotating basis. Finland has supported the initiative by sending two experts to the operation’s head-quarters in Britain. Current plans do not in-clude dispatching any Finnish naval vessels to the region in the near future,” said Timo Kan-tola of the Finnish Ministry for Foreign Af-fairs in January.

The heightened military presence in the Gulf of Aden has already reduced piracy, he says.

“In terms of the future, though, what will be decisive is how the political process progress-es. The problems in coastal waters there won’t go away until the political situation in Soma-lia stabilizes and the rule of law is established across society.” •

“PEACE IN SOMALIA IS THE BEST WAY TO ELIMINATE PIRACY

THERE.”

Pe

tte

ri T

olv

an

en

28

Fifty years from now people could be fl ying to their summer cottage in their own small plane on a tank of fuel refi ned from algae or with an engine powered by hydrogen.

FLYING F

UT

UR

E T

RE

ND

S

TEXT TIMO SORMUNEN I ILLUSTRATION MARIKA EEROLA

Ch

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Emissions-free fusion energy could well be the power of choice, rather than today’s fossil fuels. Space tourism is also likely to become part of everyday life.

No major changes are expected over the next 10 years, however. Investments in new aircraft will see a much young-er fl eet in the sky, though, and many airports will have expanded their capacity.

“Helsinki-Vantaa will also be a larger construction site than it is today,” laughs Haglund.

The changes that are coming will be more obvious by 2030. Emissions will be much lower by then, and biofuels will have replaced much of today’s jet fuel.

Aircraft will also be larger than today’s, as well as lighter, thanks to composites, and more aerodynamically effi cient.

“Biofuels will still be used in 2050, but hydrogen will be being used by then.”

Flying will have become a more integrated part of dai-ly life, and many more people will have the opportunity to fl y themselves.

“People will be able to rent their own aircraft for weekend vacation trips or short hops to their summer cottage. Our grandfathers’ stories about congested freeways and pileups involving tens of vehicles at a time will probably sound as if they come from another planet,” continues Haglund.

“WE SEE A FUTURE OF MASSIVE CRUISELINERS AND SMALL PLANES REPLACING TODAY´S CARS.”

>

G HOME

Air traffi c is set to double every 15 years, according to the International Air Transport Association (IATA). Christer Haglund, Senior Vice President, Communications at Fin-nair, says there is little reason to doubt the prediction. The future of mobility and transport is very much written in the sky, despite ever-tougher emissions limits, he says.

“There’s space up there, and there isn’t down here. We can’t roll asphalt over everything.

“It’s easy to see how three kilometers of new road can improve things locally, but the same distance in terms of a runway can open up an ave-nue to go anywhere around the world.”

Haglund says that the aerospace industry has put a lot of effort in-to making planes more fuel-effi cient over the last 20 or so years, and has achieved a lot of progress. Airlines themselves have also done a lot through their own effi ciency drives.

The fuel consumption of the Airbus 330, for example, is 20% less than that of the model it has replaced. The A350, due to be rolled out around 2015, is expected to cut a third off current fuel consumption fi gures.

“Aircraft are getting bigger, and this is increasing their effi ciency. Bigger planes can carry more freight and more passengers for the same amount of fuel as previous generations of planes.”

Hiring a plane for your vacation. Fin-nair has recently been working on its vision of the company’s future for the rest of the century, and sees a future of massive cruiseli-ners and small planes replacing today’s cars.

30

Flying to distant climes. Professor Sirkka Heinonen of the Turku School of Economics’ Finland Futures Research Centre is more cautious in her predictions about future developments than Finnair’s Haglund.

People’s desire to travel is unlikely to diminish, she says, but people are likely to give more thought to whether they need to travel in the fi rst place.

“A lot of work-related things won’t call for travel at all, and will be handled through things like video conferencing.”

An important question will be whether airlines will be able to ‘green’ their operations and modernize their fl eets suffi ciently rapidly. Unless fuel consumption and emissions are continuously reduced, the business will become too expensive too quickly.

“The popularity of long-haul fl ights will grow in the future, and people will spend more time at their destinations,” believes Heinonen. “Short-haul air travel, in contrast, is likely to encoun-ter diffi culties. The higher the speeds achieved by rail, the great-er the number of people who will switch.”

Terrorism, airport security, and logistics will bring their own problems. It can already take people longer to get from check-in to their seats than the duration of their fl ights.

“These problems won’t get any easier if passenger volumes con-tinue to grow, either.”

Shifting to biojet. Mikko Laiterä, who is responsible for biojet fuel at Neste Oil, admits that emissions are a diffi cult problem. In practice, solving the problem will call for alternative fuels.

“Engine technology and fuel effcieincy have moved ahead dra-matically over the last 20 or so year. As we go forward, the big-gest potential clearly lies with renewable fuels.”

Replacing today’s fossil jet fuel with renewable ‘biojet’ will be a challenge, because of the very tough quality requirements ex-pected of jet fuel. Fuel must be capable of retaining 100% of its properties whether a plane is standing in the heat on the ground or fl ying in the freezing cold above the clouds. Fuel also needs to

Biojet is currently being developed on the basis of Neste Oil’s NExBTL technology, but in the future the NSE Biofuels project with Stora Enso, working on fuel from biomass, will also bring additional opportunities. Forest harvesting waste is one of the raw materials that will be employed in the process featuring Fischer-Tropsch synthesis used in the pilot plant at Varkaus.

“Biojet could well be in use on normal scheduled fl ights in 20 years’ time. A few airlines such as Air New Zealand, Japan Air-lines, and Continental Airlines have already carried out trial fl ights using blends of fossil jet fuel and biojet or are planning to do so in the near future. It’s diffi cult to predict exactly what the situa-tion will be decades from now, however. It could be that we will shift directly from hydrocarbons to some as yet unknown ener-gy source.” •

EMISSIONS TRADING COULD BE A CATALYSTAircraft manufacturers, airlines, and oil refi ners have been wres-

tling with the emissions problems of air traffi c for years. The

weight of aircraft and planes’ fuel consumption have been cut

signifi cantly. Aerodynamic performance has also been improved.

Route optimization has also yielded benefi ts. Fuel consumption

per passenger has fallen by around 70% over the last 40 years.

Today’s aircraft use around three liters of jet fuel per passenger

per 100 kilometers.

Given the increase that has taken place in air traffi c, however,

emissions have virtually doubled since 1990. Reversing this trend

has also been diffi cult because aviation was not included in the

Kyoto Protocol on reducing greenhouse gas emissions. Emissions

trading, which has been used by major industrial companies for

some years, is soon to enter the picture.

The European Parliament approved a controversial change to

the European system in summer 2008, and emissions trading will

be extended to internal fl ights in the EU in 2012. After this, it will

be possible to trade emissions on internal European fl ights and

fl ights arriving from further afi eld and leaving for long-haul des-

tinations. Airlines able to cut their emissions will be able to sell

their surplus emissions allowances to those who need them.

Airlines have criticized the system as expensive and as likely to

threaten the growth of the entire industry. According to the Asso-

ciation of European Airlines (AEA), emissions trading could result

in extra costs of some €160 billion for the industry over 10 years.

Emissions trading is only likely to increase ticket prices by a

couple of percent, however, on fl ights within the EU.

have a high energy content and be free of any impurities that could damage engines.

“Around 330 billion liters of jet fuel are used annually, so this will call for massive amounts of raw materials to produce bio-fuel. Algae could well be a solution here,” says Laiterä.

31

[ What makes Neste Oil an interesting place to work?]

Personnel at Neste Oil tend to stay a long time with the company. Studies show

that employees like the company’s atmosphere and fi nd their jobs interesting.

1What makes Neste

Oil an interesting

place to work?

Neste Oil has a strong

growth strategy, and

personnel are involved in exciting

areas such as developing new

traffi c fuels and other innovative

solutions. Our goal is to reduce

the environmental footprint of

traffi c and transport.

2Does Neste Oil

encourage people to

develop their skills

and abilities?

We certainly do,

and we offer our people lots of

opportunities to develop them-

selves. We have excellent tools

and processes, and a lot of

internal training programs,

covering everything from

individual skills to leadership.

Our project-based working model

offers people an excellent way to

learn by doing. Although most

of our people are technical and

scientifi c specialists, we offer

a wide range of positions.

3Why is Neste

Oil a good place

for people

concerned about

the environment?

Our operations are guided by a

genuine desire to develop new

technologies, new products, and

new raw material inputs that will

contribute to a more sustainable

future and reduce the environ-

mental impact of traffi c and

transport. We see this as one of

our competitive advantages.

4What kind of oppor-

tunities do personnel

have for internation-

al assignments?

Our new growth and

investment projects offer an

excellent range of opportunities

for people interested in interna-

tional responsibilities. This

covers everyone, from operators

to senior managers. International

career possibilities at Neste Oil

have expanded a lot, and we

currently have 76 people on

overseas assignments.

5What kind of

atmosphere and

approach to work is

there at Neste Oil?

Studies have shown

that we have a great atmosphere,

and one of the best nationally

and internationally. Our people

enjoy their work, are committed,

and are proud of what they do.

We had an over 80% response

rate to our latest personnel

survey, and our job satisfaction

fi gures are high. These are

just some aspects of the ‘can do’

spirit we have.A

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32

of th e iceFigure skating is a world of its own, and combines skill, strength, elegance, and music to create a very special experience for performers and audience alike.

Th e Synchronized skating. Figure skating has expanded since the 1990s. The popularity of synchronized skating has grown a lot, and it offers new opportunities for many skaters who have already ended their careers in the more traditional dis-ciplines.

“Although synchronized skating has become more compet-itive, it still offers lots of excitement and challenges for those who get into it. It has also signifi cantly reduced the number of people who give up the sport entirely. Two Finnish teams have won World Championship gold medals in synchronized skating over the last three years.”

Around 200,000 people skate in Finland, of whom 10,000 compete at some level. This represents a very high level of interest, proportionally. Four young female skaters – Pöykiö, Korpi, Lepistö, and Jenni Vähämaa – are at the top of the fi eld in Europe, and Ari-Pekka Nurmenkari is well on his way to the top in Europe among male skaters.

“The success of Finnish skaters, and the chance we’ve had to host major events, have given a real boost to the sport. The number of skating clubs is rising rapidly, and trainers’ belief in their abilities has also improved when they’ve seen the suc-cess of their skaters. This promises well for the future,” says Rahkamo.

Sport and art. Susanna Rahkamo believes that what attracts people to skating and competing, and watching events as well, is very clear.

“It’s a combination of sport and entertainment. From a sports perspective, fi gure skating calls for endurance, strength, and skill. The free program, for example, can be compared to the 1,500-meter track event in terms of the endurance and physical stamina it calls for. Jumps call for the same type of energy that ski jumpers need. Technical prowess, tight con-trol of your body, and excellent coordination are all essen-tial for success.

“And on top of all this physicality, skaters also need to be able to win over the audience and the judges with their pres-entation. A purely technical performance is not enough, it has to work visually as well,” says Rahkamo.

Finland hosted the European Figure Skating Champion-ships for the fi fth time this January, and the event fi lled the Hartwall Arena in Helsinki to capacity. Neste Oil was one of the main national sponsors of the event. The sport has changed quite a lot from the fi rst event held in Finland in 1977, but much has stayed the same as well.

Susanna Rahkamo, the Chairman of the Finnish Figure Skating Association, has followed the sport’s development for many years during her long career. A little girl at the time of the 1977 championships, she skated in the opening pro-gram. By the mid-1990s, she and Petri Kokko, now her hus-band, were at the top of the ice dance fi eld, and won a Euro-pean gold medal and a World Championship silver medal in 1995. Rahkamo was elected Chairman of the Finnish asso-ciation in 2005.

“One of the biggest steps forward we’ve seen in the sport was the new judging system introduced after the controversy that took place in the Salt Lake City Olympics in 2002. Al-though the new system is quite expensive and only has lim-ited application to ice dancing, it’s brought a lot more trans-parency to the judging process and increased people’s trust in judges’ decisions.”

Rahkamo’s and Kokko’s success in the 1990s has been fol-lowed by Laura Lepistö, who took the solo gold medal at the Helsinki Championships this year and won the bronze medal last year in Zagreb; Susanna Pöykiö, who won the European silver medal in 2005 and the bronze in 2009; and Kiira Kor-pi, who won the European bronze medal in 2007.

“All the Finnish women’s medals have come since the new judging system was introduced. In the past, such a rapid rise to the top of the fi eld would have been impossible; getting there took years of competition. Today’s judging is much fairer and more equitable than the old one, which was of-ten compromised by things like personal preferences,” says Rahkamo.

33

• Singles skating events are for men and women. Performances comprise a short program that can last a maximum of 2 minutes 50 seconds, and a free program that can last for 4 minutes for women and 4 minutes 30 seconds for men. The short program accounts for a third of points, and the free program for two thirds. The short program features a number of compulsory jumps, spins, and so on that the judges mark. In the free program, skaters have more freedom to create their free programs, as long as they stay within given rules.• Pair skating events are based on a man and a woman performing together. Events comprise the same short and free programs used with men’s solo events, and are weighted in the same way. Both programs include pair-specifi c elements, such as jumps and lifts, and singles elements.• Ice dancing events comprise three programs, a compulsory number, a rhythm-based dance, and a free program. Dancers are not allowed to perform lifts that go above the shoulder or jumps. The emphasis is on intricate footwork and dance holds closely matched to the music.• Synchronized skating events include 16 skaters (all women or men and women) performing a variety of formations. Judging concentrates on the precision of the formations, the transitions between them, and how well individual skaters synchronize their moves with each other.• Singles, pair, and ice dancing events are included in the winter Olympics.

Sources: Finnish Figure Skating Association, Wikipedia

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European Figure Skating Championships in Helsinki in

January 2009. Ch

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Competitions and other skating events fi ll venues today worldwide, and the sport seems to speak to people wherever they come from.

“Dance, music, and sport are universals the world over, and they come together in fi gure skating.”

Teamwork. The values behind the sport are solid ones, believes Rahkamo. The Finnish sport emphasizes the importance of a holis-tic approach, and the Finnish Association sup-ports skaters not just in things like training and competition, but also in areas such as edu-cation.

“We’re also very clear about our opposition to doping. We stress to the parents of young skaters that drugs have no place in this sport, and I believe that’s another factor that makes it more attractive for both parents and young people,” says Rahkamo.

“When selecting skaters for competitions and special training teams we try and be as fair and honest as we can. The skaters who give the best results and are committed to the sport the most can be sure of getting a place. That’s what we concentrate on.

“Figure skaters are also great partners for sponsors. They’re very much at home when the spotlight’s on them, as they’ve been trained for that from the very beginning. They’re good all-rounders and make excellent role models.

“Skaters also understand the importance of partnership and teamwork, as they’ve got a strong team behind them: their trainer, their choreographer, the people in their local club, and so on. Their ‘stage presence’, openness, team-sense, and role model potential are all qualities that are valuable and attractive – lo-cally, nationally, and internationally.” •

34

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“Filling up’s faster and easier with the new systems.”

NESTE OIL STATIONS AND SERVICES IN FINLAND

Manned Neste Oil stations offer a wide range of products and services. Customers can pay either by card or cash. Stations also offer loyal customer benefi ts to Neste Oil cardholders. Holders of Kesko’s Plussa customer loyalty card also receive bonus points or discounts. Customers receive bonus points when paying with any of the different card options or cash. The only exceptions are Amex and Diners cards. Benefi ts accrue to only one card at a time.

Unmanned Neste Oil stations in Finland are typically located next to K-citymarkets, K-supermarkets, and K-markets. Stations offer the same loyal customer benefi ts as manned outlets.

Neste Oil Express stations are unmanned outlets and designed to offer some of the lowest prices in the area. Payment can be made using Neste Oil cards and popular bank and credit cards. No discounts or loyal customer benefi ts are offered on purchases. The emphasis is on ease and speed.

Customers do not need to queue up at one payment terminal, as pumps have their own terminals.

Neste Oil Truck stations are intended for trucks and other heavy vehicles. The main fuel on offer is diesel; around 150 outlets also offer motor fuel oil for machinery, and some the AdBlue emissions-reduction additive as well. Purchases can be only made using Neste Oil’s corporate cards.

www.nesteoil.com > Find a station

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The Neste Oil station at Karisto is a

welcome newcomer, as the area is

developing rapidly and still lacks

some services. Today, locals can fi ll up,

have a bite to eat, or pick up some-

thing in the shop at Neste Oil Karisto

around the clock.

“Customers have been very satisfi ed

with the service we provide, and our

Neste Oil signs are well-placed to

attract passing traffi c from the

motorway,” says Regional Manager

Lasse Paloheimo.

The site is located at a major

crossroads, as Route 24 heads to

Jyväskylä, the Ahtiala residential area

is close by, as are a number of

industrial locations.

“We’ve also now got more space

for trucks, which we didn’t have when

we fi rst opened, and we’re seeing a

steady stream of trucks stopping off,”

says Paloheimo.

Check out the online version: www.nesteoil.com > media > publications > Refi ne Online

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INTEGRATED PUMPS AND PAYMENT TERMINALS

A CROSSROADS

The new Neste Oil service station in Karisto close to the motorway be-tween Helsinki and Lahti has been de-signed to give motorists a great ‘user experience’. Two payment alternatives are available, using either the termi-

nals integrated into both ends of the forecourt pumps, which accept cards, or a separate terminal, which accepts cards and cash. Up to three customers at a time can pay, and four can fi ll up.

“I like the system here. It’s a good sta-tion,” according to Veijo Meriläinen, one of the drivers who stopped off at the station in January.

“It’s quicker to fi ll up, and easier too. I’ve got a similar station near where I live in Vantaa, and I often stop off there.”

The integrated card terminals accept bank cards, credit cards, and Neste Oil’s own cards. Some customers like Sami Rasimus, who works close by, prefer to pay in cash, and use the separate terminal.

“It’s good that cash is still an option. I like the shop too.”

All chipped up by 2010. Neste Oil stations that offers bonus points to holders of Kesko’s K-plussa cards are located next to the latter’s Citymarkets, K-supermarkets, and K-markets. Some of these only accept card payments.

The terminals at Neste Oil stations will all support the chip card system that is due to become compulsory in 2010.

“At the moment, systems read the magnetic strip on customers’ cards, but we’ll be able to update them rapidly to read chips. Neste Oil is ahead of its competitors in this area, says IT Maintenance Mana-ger Timo Hietaharju of Oil Retail.

“The displays are similar to those in ATMs. We’ll be shifting to chip cards this year or next year at the latest, and this will improve payment security a lot.” •

MAJOR PRICE SWINGSCrude prices continued to rise in the fi rst half of the year. Good demand, especially in China and India, and concerns about the long-term supply-demand balance drove the market up. As the global fi nancial crisis escalated, however, prices started to decline sharply. Although OPEC announced production cuts to support the market, crude prices kept falling until fi nally stabilizing in December.

Refi ning margins were slightly lower com-pared to 2007. The international reference refi ning margin for complex refi neries in North-west Europe, IEA Brent Cracking, averaged USD 4.74 /bbl (5.09) in 2008. Boosted by increas-ing demand, middle distillate margins, which were already strong, improved further in2008, especially during the second quarter. Gasoline margins collapsed compared to 2007. Record high pump prices and increasing ethanol blending eroded demand signifi cantly in the US.

Demand for gasoline fell on the Finnish retail market by approximately 5% in 2008. Diesel demand increased, but growth decreased to approximately 2% as the economic situation worsened. The downturn in the Baltic economies was refl ected in reduced demand for traffi c fuels;

Neste Oil refi ned a total of 15.2 million tons (14.6 million) of crude oil and feedstocks in 2008, of which 12.4 million tons (11.8 million) at Porvoo. The Naantali refi nery processed 2.8 million tons (2.8 million).

STRONG TOTAL REFINING MARGIN. Sales at the Neste Oil Group totaled €15,043 million in 2008, compared to €12,103 million in 2007. The Group’s comparable operating profi t was €602 million (2007: 626 million). The comparable operating profi t was supported by a stronger total refi ning margin and good profi tability at Shipping, but this was offset by an unfavorable US dollar and weaker profi ts at Oil Retail and joint venture Nynas AB.

Oil Refi ning’s full-year comparable operating profi t was €510 million (484 million), Renewable Fuels’ €2 million (-13 million), Specialty Products’ €50 million(109 million), Oil Retail’s €22 million (59 million), and Shipping’s €55 million (28 million).

Operating profi t under IFRS was €186 million (801 million), and included inventory losses totaling €453 million in 2008, accumulated during the second half of 2008. Investments totaled €508 million (334 million). The full-year profi t before taxes was €129 million (763 million). Profi t for the period 2008 was €101 million (580 million). Earnings per share were €0.38 (2.25).

Cash fl ow from operations totaled €512 million (541 million). The Group's liquidity remained strong.

2008

50 %

40 %

30 %

20 %

10 %

0 %

LEVERAGE RATIO

31 Dec 2008

31.5 %

31 Dec 2007

23.7 %

TARGET: 25–50 %

25 %

20 %

15 %

10 %

5 %

0 %

ROACE (after tax)

TARGET: MINIMUM 15 %

2008

13.1 %

2007

15.5 %

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KEY FIGURES 10–12/08 10–12/07 2008 2007

€ million unless otherwise noted

Sales 2,805 3,461 15,043 12,103Operating profi t before depreciation -297 199 409 996Depreciation, amortization and impairments 55 56 223 195Operating profi t -352 143 186 801Comparable operating profi t * 103 84 602 626Profi t before income tax -382 130 129 763Earnings per share, € -1.14 0.40 0.38 2.25Investments 185 98 508 334Net cash from operating activities 486 220 512 541

31 Dec 2008 31 Dec 2007

Total equity 2,179 2,427Interest-bearing net debt 1,004 755Capital employed 3,237 3,234Return on capital employed pre-tax, (ROCE) % 6.1 26.2Return on average capital employed after tax, (ROACE) % 13.1 15.5Return on equity, (ROE) % 4.4 25.6Equity per share, € 8.48 9.47Cash fl ow per share, € 2.00 2.11Equity-to-assets ratio, % 46.3 49.9Leverage ratio, % 31.5 23.7Gearing, % 46.1 31.1

Western countries are in the throws of a downturn, with no respite in sight over the next few months. Demand for crude has been on the decline globally for two years in succession now. Overcapacity will be a feature of the refi ning sector in the early part of the year, and will push refi ning margins down. Oil refi ning is not popular among investors at the moment, but we at Nordea have a positive view of Neste Oil. Why?

Neste Oil has had a refi ning margin more than fi ve dollars higher than the industry average for years. The company is clearly able to record a good result when competitors limit output, and diesel margins ha-ve not shown signs of weakening. Neste Oil’s ongoing strengths include the proximity of its refi neries to Russia, its ability to refi ne sour Urals crude, and its focus on middle distillates and biofuels in particular.

The market was disappointed with the Q4 fi gures, although the company’s result actually exceeded expectations when one-time items are eliminated. The poor prospects in the refi ning sector generally were a bigger factor in the market’s reaction than the company’s result.

The economic downturn has not convinced Neste Oil to abandon its massive investments in plants in Rot-terdam and Singapore. If its competitors hit the brakes in their own projects, Neste Oil could fi nd itself in an excellent position in a couple of year’s time, as there will be a shortage of capacity in the next upturn.

Neste Oil is a good investment if someone is looking for an opportunity over a one- to two-year timeframe. The share price over the next few months will be more dependent on general market sentiment than anything else, and this seems to vary from week to week.

Neste Oil is to reorganize its operations around three business areas and seven common functions, and will introduce a new organization refl ecting this on April 1, 2009.

BUSINESS AREAS AND REPORTING The new business areas are as follows: Oil Products, Renewable Fuels, and Oil Retail.

Financial reporting will be based on these business areas from 28 April 2009 onwards, when the Q1/2009 fi gures will be announced. Comparative fi gures for 2008 will be published before that in April.

The Specialty Products Division will be consolidated into the Oil Products business area. Shipping operations will be reported in connection with the business areas that use them, and the Shipping business incorporated into the Production & Logistics function.

NESTE EXECUTIVE BOARDThe Neste Executive Board will comprise the following members:Matti Lievonen, President & CEOJarmo Honkamaa, Executive Vice President, Renewable Fuels, Deputy CEOMatti Lehmus, Executive Vice President, Oil ProductsSakari Toivola, Executive Vice President, Oil RetailIlkka Poranen, Senior Vice President, Production & LogisticsIlkka Salonen, CFOHannele Jakosuo-Jansson, Senior Vice President, Human ResourcesSimo Honkanen, Senior Vice President, HSEOsmo Kammonen, Senior Vice President, CommunicationsLars Peter Lindfors, Senior Vice President, Technology & StrategyMatti Hautakangas*, General Counsel.*Secretary to the Neste Executive Board, not a member

NESTE EXECUTIVE MANAGEMENT BOARDThe Neste Executive Management Board will comprise the President & CEO, business area executive vice presidents, the CFO, and the Senior Vice President, Production & Logistics, and will be responsible for leading and setting operational business targets and monitoring progress on achieving them.

FOR MORE FINANCIAL INFORMATION:www.nesteoil.com > investors

Three business areas

TURBULENT WATERS

CONTACT INFORMATIONFor more investor-related information, please contact IR Manager Juha Rouhiainen on tel. +358 10 458 5132 or via email juha.rouhiainen@nesteoil.com

PASI VÄISÄNEN

Analyst

NORDEA

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NESTE OIL’S SHARE PERFORMANCE, €

5