Tue 12 Jul 2011, 16:22 GMT

Brightoil plans downstream and upstream growth



Hong Kong-listed Brightoil has revealed that it has ambitious plans in both the downstream and upstream oil markets, which includes the company's strategy to become a major global bunker supplier within the next 2-3 years.

The company currently provides marine fuel to customers in major Chinese and international ports. It is the leading supplier in China's Pearl River Delta and over the last two years has expanded its business in Hong Kong, Shanghai, Singapore (January 2010) and Rotterdam (May 2010).

Brightoil is also involved in petroleum products trading and in the lucrative upstream oil business.

At the start of the year Brightoil secured a US$4 billion financing deal with China Development Bank, which the company said would be used to purchase tankers for the expansion of its oil products trading business, and for mergers and acquisitions and new projects.

Speaking to Reuters on Monday, Brightoil's Chairman, Xue Guang Lin, said the majority of the financing from China Development Bank will be used for upstream acquisitions, "60-70% of Brightoil's future business will be diverted to upstream development." commented Guang Lin.

Brightoil's CEO for upstream business, Gregory J. Channon, revealed that Brightoil is seeking upstream business in Africa, North America and South America, via either an acquisition, merger or joint venture. He believes an acquisition could be confirmed before the end of this year.

In the downstream market, Brightoil is understood to be seeking oil terminal investments in Europe and the US. In April the company was also reported to be looking to lease oil storage capacity at the port of Fujairah with China International United Petroleum & Chemical Corp. (Unipec).

Both companies were said to be in discussions with Singapore-headquartered oil trading firm Concord Energy Pte Ltd. to lease oil storage at a 1.135 million cubic meter terminal in Fujairah, which is due to be completed in 2013.

Brightoil Petroleum's entry into the Fujairah bunker market would mean that the energy firm would have a foothold in all three of the world's leading bunker ports - Singapore, Fujairah and Rotterdam.

Details of the company's recent performance will be disclosed in its annual results for the year ended 30 June 2011, which is expected to be published on or before 30th September 2011.

Profit before taxation for 2010 and 2009 were recently readjusted to HK$1.172 billion and HK$312 million respectively, following a change in one of its principal accounting policies relating to fuel oil inventories.


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