SINGAPORE, March 27 (Reuters) – Spanish oil group Repsol plans to expand its trading desk in Singapore as it looks to move more crude and fuel oil to Asia to meet growing demand, a company source said.
The firm will hire one or two fuel oil traders by year-end to boost its current three-man crude and oil products team, said the source, who declined to be identified as he is not authorised to speak with media.
“We are still in the process of looking at some candidates,” he said on Thursday.
Slow growth in Asia-Pacific’s crude output has opened the way for more imports from Europe, Canada and South America whenever prices and shipping costs allow.
Repsol’s Singapore office is headed by crude trader Salvador Alarcon Alacio, who will now focus on business development. Fuel oil trader Jaime Traspaderne will expand his coverage to include crude.
The third member, crude trader Manosh Saha, joined Repsol in March after stints at Reliance Industries and Brightoil.
The move comes as many energy trading firms are consolidating and reducing costs as intense competition thins margins.
“It’s true that margins are tighter now, but we can still make some small profit … We can take advantage of our knowledge and position in the Latin America market,” the source said, adding the firm could move Brazilian, Ecuadorian, and Colombian crude grades to Asia.
South America has been a key region for Madrid-based Repsol, which recently ended a bitter dispute with Argentina’s government after being forced to give up most of its stake in the country’s biggest energy company.
Repsol will also lease from May about 104,000 cubic metres of capacity at a Singapore oil terminal owned by storage provider Vopak, the source said. That will be used to blend imports from the West to meet bunker fuel specifications.
Trade and shipping sources say Repsol has since early this year been increasingly loading Suezmax vessels with fuel oil at Bilbao in Spain and shipping them to Singapore, the world’s largest bunkering hub.
A second company source said the fuel Repsol brings to Asia is a low-viscosity, high-density slurry product that can be used as a blendstock.
A Suezmax can carry about 130,000-140,000 tonnes of fuel oil, shipping sources said.
Asia typically pays higher premiums for the heavy distillate than buyers in the West. (Reporting by Jane Xie and Florence Tan; Editing by Joseph Radford)
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