Caltex to invest US$5.0b in Asia by 2000: Chairman
Caltex to invest US$5.0b in Asia by 2000: Chairman
SINGAPORE (Reuter): Caltex Petroleum Corp, a joint-venture of
U.S. oil majors Texaco Inc and Chevron Corp, plans to invest
US$5.0 billion in Asia by 2000, chairman David Law-Smith said
yesterday.
As part of the investment, Caltex has launched a $500-million
program to strengthen its marketing position in the region
involving redesigning the company logo and service stations, and
building new ones, he said.
"We are in the process of completing our plans and making our
priorities," Law-Smith told Reuters in an interview.
"But we are looking at a number of $5.0 billion. The area we
are looking at is the whole of Asia, including new markets, that
is China, Vietnam, Cambodia, India and Indonesia."
Law-Smith also said Caltex was revamping its Asia management,
putting top decision-making executives into Singapore to bring
management closer to the market.
He said Caltex interests in China involved areas under less
government restriction, including liquefied petroleum gas (LPG),
lubricants, the production of asphalt for road building and
retail sales of transportation fuels, especially in southern
China.
China has made known it does not need foreign investment and
technology in developing oil refineries, he said. "However there
is certainly room for integrated refineries and petrochemical
plants down the road," he said.
"Another important issue is that should China's growth of
eight percent be compounded, it will be very difficult for them
to have the physical infrastructure in the refining and energy
industries to support that kind of growth if indeed new
refineries are not built."
Caltex plans in India were also focused on the LPG and
lubricant sectors, Law-Smith said.
"Until the government changes the pricing structure in India,
our feasibility study has indicated that refining is not an
attractive investment," he said.
"But we don't exclude storage and importation of refined oils
to the extent that the tremendous growth in India requires that.
We would like to participate in that sector."
He said Caltex had started discussions with several parties in
India on possible investments, had done its research and
analysis, and was "half-way" to making decisions.
"It is now largely dependent on areas out of our control and
that is the government's willingness and encouragement to make
these investments," he said.
Law-Smith said Caltex had signaled to Jakarta government its
intention and ability to enter Indonesia's downstream sector to
help meet growing demand, especially for transportation fuel, as
the economy grows.
Indonesia is keen to attract private and foreign oil companies
to build export-oriented oil refineries. But Law-Smith said
companies like Caltex were reluctant to build such refineries, in
Indonesia or elsewhere.
"But there is, of course, a desire for those with the raw
materials, that is the crude, to add value to their exports but
that is unlikely to happen in the near future."
Caltex's sister company, Caltex Pacific Indonesia, which
directly reports to Texaco and Chevron, is currently producing
760,000 barrels per day of crude in Indonesia.