Kuwait to raise oil sales to RI

Kuwait to raise oil sales to RI

SINGAPORE (Reuter): State-owned Kuwait Petroleum Corp (KPC) aims to expand its oil product sales to Asian countries, including Indonesia, which it has not yet penetrated in order to soak up its higher refining capacity, KPC officials said yesterday.

"We are targeting to expand our supplies to all countries in Asia such as Indonesia and Vietnam and China," said Sulaiman Al- Najdi, manager in KPC's representative office in Singapore.

Supply stability is also a prerequisite for customers such as Indonesia and Vietnam, which view term deals as a way of protection from the volatile spot market.

For example Indoil, a trading affiliate of national oil company Pertamina, recently sealed a new term contract with KPC to supply 55,000 tons of jet fuel every 40 days.

KPC also sells 80,000 tons of diesel a month to Indonesia under an annual term deal, while another 500,000 tons a year of oil products are sold through spot sales.

More than 70 percent of Kuwait's total refining output is exported to Asia, Al-Najdi said.

Kuwait National Petroleum Co (KNPC), KPC's refining arm, plans to raise domestic capacity to 900,000 barrels per day at the beginning of 1998 from around 895,000 bpd in February.

It plans to raise this to one million bpd by 2000 by building a 100,000-bpd crude distillation unit at Shuaiba, the oil-rich Gulf state's smallest refinery which now has a 155,000-bpd capacity.

KPC is planning 400,000 bpd in refining capacity in Asia, starting with joint ventures in India, Pakistan and Thailand.

It is in the early stages of evaluating the possibility of building refineries in Indonesia and China, but no decision has been made yet, KPC executives said.

The higher refining capacity is consistent with Kuwait's plan to raise crude output from its current OPEC supply quota of two million bpd to 2.5 million by 2000 and three million by 2005.