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Sinochem to up Colombia crude imports through 2013
China 2010 crude imports from Colombia, Brazil doubling.
November 3, 2010 12:16 by Reuters
China’s fourth-largest oil company, Sinochem, will raise crude oil imports from Colombia through 2013, reaping the benefits from upstream asset acquisitions and rising production in the South American country.
Colombia will become a regular supplier to Sinochem by 2013, when the company expects to take between 1 million and 2 million barrels of crude per month from the Andean country, or as much as 67,000 barrels per day (bpd), a trading source familiar with the plans said.
That’s up from just sporadic shipments on a spot basis now, a second trading source said on Wednesday.
Chinese refiners are increasing purchases of crude from Latin America as the world’s second-largest oil consumer seeks to diversify import sources. Expanding output from Brazil to Colombia is driving producers to increase sales to Asia, where demand is booming.
China’s crude imports from Colombia, led by Sinopec and PetroChina more than doubled in January-September 2010 to about 50,000 bpd from the same nine-month period a year earlier, customs data showed.
Shipments from Brazil also more than doubled over the period, reaching almost 185,000 bpd.
Sinochem took over London-listed Emerald Energy Plc for $878 million in August 2009, seeking to secure access to oil from Colombia, where production is growing at one of the fastest paces in Latin America.
Colombia’s state-run Ecopetrol has estimated its output would average 615,000 barrels of oil equivalent per day (boepd) this year, up from 521,000 boepd in 2009. The firm has an $80 billion investment plan for 2011-2020 to boost daily production to 1.3 million barrels, matching mid-sized OPEC producers such as Algeria.
Through the acquisition of Emerald Energy, Sinochem also acquired production assets in Syria.
Sinochem’s production in Colombia will rise to 10,000-20,000 bpd by 2013, one of the trading sources said, adding that regular shipments to China will comprise both Sinochem’s own barrels and output from Ecopetrol.
Sinochem’s crude requirements will be steady in the next two years from 2010 levels, sources said, but will increase in 2013 with the opening of a new refinery.
State-owned Sinochem Group is still “actively” pushing forward the construction of its first major refinery in coastal Fujian province in southern China, group president Liu Deshu said last month.
Sinochem had earlier aimed to complete the estimated $4 billion plant in Quanzhou city in 2012 and hoped to partner with OPEC-member Kuwait, which in late 2007 agreed to supply 240,000 bpd of crude under a long-term pact.
(Additional reporting by Osamu Tsukimori and Risa Maeda in TOKYO; Chen Aizhu in BEIJING; Editing by Ramthan Hussain)