|
Oil
producers from Brazil to Azerbaijan are targeting Asia to expand
sales as growth falters in the U.S. and Europe, highlighting confidence
that the world's fastest-growing energy market will offset any demand
slump in industrialized nations.
At Singapore's annual Asia-Pacific Petroleum Conference (APPEC) last week, company executives are still upbeat about booming energy consumption in the region, despite the uncertainty surrounding the pace of global economic growth. "Many investors see bright prospects for the longer-term future of energy companies in the Asian region with an outlook for robust demand growth powered by the emerging nations," said Ric Spooner, chief market analyst at CMC Markets.
Downstream, Asia's state-oil companies are also confident that business will remain buoyant with growing domestic demand and fuel exports. Indian Oil Corp (IOC.NS) is building a 300,000-barrel per day (bpd) refinery in Paradip in the eastern state of Orissa. The company aims to start the plant by June 2013, rising to full capacity in 2014.
"Asian demand has been growing steadily and medium-heavy sweet (crude) grades, like the Brazilian ones, are not the usual grades offered" by Middle East producers, said Guilherme Franca, global crude trading manager at Brazil's state-controlled oil company Petrobras (PBR.N).
Brazil is raising crude exports to Asia to 38 percent of the country's total this year, up from 34 percent in 2010, boosting market share with grades most favored by refiners from India to China. Petrobras is using storage tanks at its Nansei Sekiyu refinery in the Pacific island of Okinawa, Japan , as a crude distribution hub for northeast Asian clients, including other Japanese refiners and buyers in South Korea and China.
Crude and products storage plays in northeast Asia are now commonplace, as far-away producers seek to shorten journey times to supply Asia's biggest markets in China and Japan, increasing their flexibility to meet prompt requirements.
The trading arm of Azeri state oil firm Socar expects crude sales to Asia to rise to 7-9 million barrels a month by the end of 2011, up from 5-6 million barrels, after securing storage capacity of 5 million barrels in South Korea last month. It is also looking to lease tanks in Singapore.
"With the new storage, our sales in Asia will increase," Socar Trading Chief Executive and President Valery Golovushkin said. "We will source fuel oil from all over, India and the Persian Gulf." Socar Trading has expanded trading of oil products in Asia to include gas oil, jet fuel and naphtha, on top of fuel oil. Company staff in Singapore will number 15 by year-end, targeting trade of around 4 million tonnes of fuels a year.
The International Energy Agency, adviser to industrialized nations on energy policy, last month said a global economic slowdown may stifle oil demand growth next year, warning that tightening supplies could spur more oil price volatility.
PetrolWorld 100911
|
