BT : Offices of PetroChina and SPC to be merged soon

Business Times - 21 Apr 2010

Offices of PetroChina and SPC to be merged soon

By RONNIE LIM

(SINGAPORE) Chinese oil giant PetroChina which acquired Singapore Petroleum Company for $3.2 billion last October intends to merge their two Singapore offices, bringing a total of an estimated 300-plus employees 'under one roof'.

Disclosing this in SPC's latest first-quarter newsletter, Xia Hongwei, managing director of PetroChina Singapore, who is now also SPC chairman, said the move will come 'very soon'.

It follows the merger of the two companies' Singapore trading operations over the past few months - which was the first step by PetroChina to integrate their operations, he added.

Currently SPC's office is located at Harbourfront Centre, while PetroChina Singapore's is at Raffles City Tower, where the duo's 20-30 oil traders are all centralised.

BT understands that PetroChina is now looking at various venues in the city area, near Raffles City, for the new office, with the move likely to take place next year - suggesting that present leases need to run out first.

Mr Xia in his message to SPC staffers had indicated that '2010 will be a breakout year for both SPC and PetroChina International Singapore', adding that its new Singapore asset will help PetroChina to broaden its international platform to achieve further growth.

The joint PetroChina/SPC trading team, for starters, is a formidable force.

Latest available figures show that PetroChina Singapore traded over 12 million tons of oil, worth over US$6.9 billion, in 2007. SPC, according to its 2008 annual report, imported 48 million barrels of crude for processing at its Singapore refinery, and traded about 33 million barrels of distillates, including naphtha, gasoline, diesel and jet fuel. This doesn't include its marines business.

SPC has a half share, with Chevron, in the 290,000 barrels per day Singapore Refining Company, 'and going forward, the plans are to increase the depth and complexity of the refinery', sources said, with new projects aimed at meeting environmental and certain other needs.

'At the same time, there could also be some accompanying increase in the refinery's capacity,' they add.

Currently, front-end engineering design is going on for two planned projects - a 'green' or ultra-low sulphur gasoline (ULSG) plant and an in-house cogeneration facility to help provide utilities, like power and steam.

The ULSG plant was earlier estimated to cost US$200-300 million, while the 60-70 megawatt cogen plant costs over US$100 million. A final investment decision on the projects is expected before the year-end.

The sources said that Singapore refiners, including SRC, saw a better-than-expected first quarter, with throughput back up to 90 per cent, recovering from last year's lows. This was partly due to maintenance shutdowns by some regional plants.

'But the industry is still evaluating the strength of the economic recovery and remains cautious about committing to capital expenditure,' one source added.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.



Big player: SPC imported 48 million barrels of crude and traded 33 million barrels of distillates, including gasoline, diesel and jet fuel, says its 2008 annual report