Thursday, June 25, 2009
Beijing: CNOOC's first major refinery in southern China aims to operate at near 90 percent of its 240,000 barrels per day capacity in July, rising from close to 80 percent in June, following its start-up in mid-March, company sources told Reuters on Tuesday. The high production target, coming along another two new refineries, would pile up supplies faster than the world's No.2 oil user can consume and force oil firms to extend aggressive fuel exports to thin high fuel stocks, industry officials said.
"So far, market demand looks okay as buyers are still hoping for another fuel price increase," said one official familiar with the plant's operations in the coastal city of Huizhou.
"But if the crude price slips to the $60-level, we will come under big pressure as buyers who earlier hoarded on hopes of price rises would start to release stocks."
China's apparent oil demand -- domestic refinery output plus net fuel imports but excluding inventory changes -- rose 6 percent in May in the quickest growth in 9 months, Reuters calculations from official data showed on Monday, amid more signs of economic recovery.
But part of that demand expansion may still sit in the tanks as wholesalers, rather than end consumers such as factories or truck operators, have stocked up in anticipation the government will again raise pump fuel prices soon after the June 1 hike.
After several delays, No.2 state refiner PetroChina will start up the by end of this month a 200,000-bpd crude unit in Dushanzi in the remote region of Xinjiang, which will effectively disperse more surplus fuel into southern and eastern parts of China.
The expanded 240,000-bpd Fujian refinery on the southeastern coast, a venture owned by Exxon Mobil, Saudi Aramco and top Chinese refiner Sinopec Corp , has started trial operations and aims for full runs in the second half of 2009, the company has said.
CNOOC is the parent of offshore oil and gas producer CNOOC Ltd. [24/06/09]