New Delhi: Essar Oil may set up a trading desk in Singapore to help export oil products from its refinery that has been expanded by a third, a senior official said on Tuesday, as it vies with Reliance for Asian market share.
Privately run Essar has relocated Vivek Singh, a mid-level manager, to Singapore this month, and the firm’s first staffer in the city-state will assess the merits of setting up a trading desk.
“We are keen on exploring that, particularly for fuel oil and gasoline where we can get better realisation,” the company official said.
A spokesman for Essar declined comment.
Recently Reliance Industries, owner of the world’s biggest oil complex, has transferred some of its staff to Singapore to manage a trading desk. Reliance also has set up trading desks in the United States and London.
If Essar moved to start a Singapore trading desk, it joins several other companies in expanding into the Asian energy hub, seeking to grab a bigger slice of a market that is emerging from recession.
Trading firms such as Noble Group is extending into the distillates market, Mercuria Energy Trading is considering selling marine fuel in Singapore, joining the likes of Sinopec affiliate, Southern Petrochemical Co Ltd; while Australia’s top investment bank Macquarie Group has expanded its trading business in the city-state by hiring a senior marketer.
Asked if Essar may set up trading desk in other parts of the world, the official said: “Particularly, as and when our production goes up that we have to explore”.
In May, Essar raised the plant’s capacity to 280,000 barrels per day (bpd) from 210,000 bpd. It plans to further raise it to 320,000 bpd by December 2010 in the first phase and set up another 360,000 bpd unit at Vadinar by December 2011 in second phase.
The group recently acquired a 50% stake in Kenya Petroleum and will set up fuel stations in the African nation.
“We have hired Alok Mathur from Reliance Industries to manage our Kenya operations,” said another Essar official.
He said the company may look at setting up a trading desk in London if it manages to get refineries in Europe.
Essar recently submitted bids for three plants run by Royal Dutch Shell Plc, including Britain’s second-biggest refinery.