Asia downstream news update

China

China Petroleum & Chemical Corp. (Sinopec) is to take an equity share in approximately 1 million acres of oil and gas acreage in Oklahoma. Chesapeake Energy has announced that it has finalised a deal with Sinopec for half of its interest in the 850 000 acres it holds in the Mississippi Lime formation for US$ 1.02 billion.

Chinese companies are looking to tap into US expertise in shale developments; Sinopec had already paid US$ 2.2 billion in 2011 for access to five shale deposits in a deal with US firm, Devon Energy Corp.

India

Oil India Limited (OIL) is seeking to raise US$ 900 million from overseas by October in order to pay for its acquisition of 4% interest in a gas field in Mozambique.

The total cost of the acquisition will be approximately US$ 1 billion. OIL Finance Director, TK Ananth Kumar, has indicated that 80 – 90% of this sum will be accounted for by overseas market contributions.

Meanwhile, the decision to close down the century old Digboi refinery by management of the Indian Oil Corporation (OIL) has been strongly opposed by the people of Tinsukia district, who have burnt effigies of the Prime Minister, the Union Petroleum Minister and Chief Minister by way of protest.

Also in India, Assam Petrochemicals Limited (APL) is undertaking a large scale expansion in the production of methanol. Plans are now underway to produce 500 t of methanol and 200 t of acetic acid/d, with a capital outlay of Rs 1028 crore. The Namrup based company, with a net worth of Rs 70 crore, has signed financial agreements with 10 banks, OIL and other equity holders for the new project.

More generally, as part of efforts to diversify and expand commercial exchanges with Mauritius, India is to push to renew its petroleum product exports contract with the country, and additionally install a petroleum storage facility.

Mangalore Refinery and Petrochemicals Ltd (MPRL) has been supplying petroleum products to Mauritius; its three year agreement with the State Trading Corporation (STC) is up for review this month.

Russia

OMV Refining & Marketing GmbH has signed an agreement to sell its lubricants business to a subsidiary of Russian Lukoil Group.

OMV's lubricants division consists of a sale and distribution organisation in Central and Eastern Europe and a modern blending plant in Austria. The Austrian energy firm assures that the 74 workers employed in its lubricants businesses in nine countries will retain their jobs.

The transaction will not affect the lubricants unit of OMV's Turkish subsidiary, Petrol Ofisi, which continues to be a part of the OMV Group.

South Korea

Samsung Total Petrochemicals Co. bought 25 000 t of naptha for delivery to South Korea in the first half of August. The joint venture company purchased the cargo in June.

Edited from various sources by Emma McAleavey.

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