OREANDA-NEWS. April 01, 2011. Leading Chinese offshore oil producer China National Offshore Oil Corp (CNOOC) has hired its first oil products trader in Singapore, joining bigger rivals PetroChina and Sinopec in boosting its trading portfolio, industry sources said.    

PetroChina and Sinopec have been beefing up their clout as international trading powerhouses and have more say on pricing as refiners in China, the world's second-largest oil consumer, imported a record 4.79 million barrels per day (bpd) of crude last year.     Active overseas acquisitions and the start of the first major oil refinery in Huizhou have helped CNOOC, parent of CNOOC Ltd and the smallest of China's triumvirate of energy companies, to catch up.    

Last year, it revamped its sales team and set up an oil products trading team in Beijing.   It transferred an oil products trader from Beijing to be based in Singapore, trading gasoline, diesel, kerosene and fuel oil. He will focus on fuel oil initially, the sources said.    

Before that, CNOOC had one crude trader and one naphtha trader in Singapore, as well as one crude trader in London.     Trading volumes of crude oil in CNOOC were more than 10 million tonnes in 2010, while trading volumes of fuel oil were only 400,000 tonnes last year, they said.

In December, CNOOC imported its first cargo, or 27,000 tonnes, of diesel from South Korea and sold it in eastern China to ease a local diesel shortage, they added.

"Compared with crude trading, products trading just started and is fairly thin, but it will help diversify sales channels especially after the start of the Huizhou refinery," said one source.        

CNOOC is pursuing a strategy of integrating its upstream and downstream businesses. Its first major oil refinery, the 240,000-barrel-per-day (bpd) Huizhou refinery in Guangdong province, started full-scale operations in May 2009.     CNOOC plans to add 200,000 bpd of new refining capacity in Huizhou around 2013 or 2014.

Currently diesel output at Huizhou is around 4.8 million tonnes a year, while jet fuel output is around 1.5 million tonnes a year.     "Whether to export the oil products depends on export quota, fuel prices and domestic demand," said a second source.

CNOOC has a quota to export up to 100,000 tonnes of oil products in the first half of this year, the sources said.

The offshore specialist has been actively acquiring overseas assets over the past years. It has equity oil in Indonesia and Nigeria, selling Cinta, Widuri and Akpo crudes regularly.     The company also has a Technical Service Contract (TSC) in the Missan oil field in Iraq, which is ramping up production. It is expected to take 1 VLCC, or 2.0 million barrels of Basrah Light a month around 2013, they said.    

The company is trading on crude oil in the Fast East and West Africa from time to time.     Asia's largest oil and gas producer PetroChina has been flexing its muscles across the world, expanding its international trading network and buying refineries, with the latest deal to invest in two European refineries owned by British private firm INEOS.