MOSCOW (MRC) -- Brazilian state oil company Petroleo Brasileiro SA is shipping crude during June and July for storage in China to more quickly respond to demand from the country’s independent refiners, sources said, as per Hydrocarbonprocessing.
China is the world’s biggest oil importer driven partially by demand from its independent refiners, known as teapots, centered in the eastern province of Shandong. Petroleo Brasileiro, or Petrobras, is seeking markets for its rising crude output and hopes to expand market share in China, where Brazil was the fifth-largest supplier in the first quarter of 2019.
Storing the oil will enable Petrobras to sell smaller parcels of oil promptly to the teapots, which account for about a fifth of China’s crude import demand, and expand its customer base beyond state refiner China Petroleum and Chemical Corp, or Sinopec, the sources said.
“The idea for storage is to sell small parcels and to be more competitive in this market. The main thing is to have oil anytime,” one of the sources said, adding that this will allow Petrobras to react to prompt demand.
Petrobras inked an agreement with Qingdao Port International Co in December to lease storage tanks at its joint venture Qingdao Shihua Crude Oil Terminal Co that can hold about 2 million barrels of oil, according to the sources and media reports at the time.
To fill those tanks, Petrobras has chartered the very large crude carrier (VLCC) Maran Cleo which is scheduled to arrive at Qingdao in Shandong on June 24. The VLCC contains 2 million barrels of Lula crude, part of which has been sold while the rest will go into storage, one of the sources said.
The producer has another VLCC that will arrive between July 10 and 15 at Qingdao that contains about 1 million barrels of Buizos crude for storage, he added. Buizos is a new medium-sweet grade that was first exported late last year.
The sources declined to be named as they were not authorized to speak to the media. Petrobras did not respond to a request for comment.
Qingdao Port International could not be reached for comment.
As MRC informed before, in October 2017, Petrobras’ minority stakes in Braskem and Deten Quimica was excluded from Petrobras’s divestment program, according to a government decree published in Brazil’s Official Gazette. The decree prevents Petrobras from immediately selling its minority stake in Braskem, which had been announced last year. A new decree will be required to release the stock sale.
Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
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