September 9, 2011 [Platts] - Russian trading house Litasco is in talks to lease gasoline storage tanks in the Asian trading hub of Singapore and hopes to increase crude oil sales to China as the company seeks to expand its business in Asia, its chief executive said.
“We are developing our infrastructure position in the region,” Sergey Chaplygin , Litasco’s CEO, said in an interview on Thursday.
Litasco is the trading arm of Lukoil and the company handles the marketing and distribution of Lukoil’s crude oil and refined products exported from Russia, as well as third-party trading.
The company currently has 230,000 cubic meters in floating storage for fuel oil around Singapore and 55,000 cu m in onshore storage tank space for middle distillates, and it is keen to lease tank space for light distillate products in Singapore.
“We are working on it,” Chaplygin said, declining to disclose more details.
The company is also looking to increase trading volumes to China in the coming years, especially when the first crude oil from Iraq’s West Qurna II oil field starts at the beginning of 2013.
In June, Lukoil President Vagit Alekperov said the company expects to get its first crude from the Iraqi oil field in 2013, with the first stage output to be at 400,000 b/d, and then to reach the designed plateau production of 1.8 million b/d in seven years.
Lukoil, together with its junior partner Norway’s Statoil, was awarded the contract to develop West Qurna II during Iraq’s second bidding round for oil fields in December 2009.
In the meantime, Litasco’s revenue is expected to increase 10% year on year this year, after what has been a challenging year so far, Chaplygin said.
“The first quarter was not easy. But results have been good and respectable so far,” he said.
Just last month, the International Energy Agency cut its estimate of world oil demand in 2011 due to growing signs of an economic slowdown, and warned that any reduction in the growth outlook for 2012 could have a major impact on expected oil consumption.
In its latest monthly oil market report, the IEA reduced its demand estimate for 2011 to 89.48 million b/d, down 60,000 b/d from its previous estimate, attributing the revision to the “sustained pressure of high oil prices and increased evidence of economic slowdown.”
“The relative calm in markets in July following the IEA stock release has been replaced by a much darker outlook for the remainder of 2011 on escalating fears of a double dip-recession and sharply lower oil demand growth,” it said.
“The markets have been volatile all year long and will continue to be so for the rest of the year. No one is giving a strong opinion that the world economy is going into recession and we will try to stay positive,” Chaplygin said.
