Tokyo: Cosmo Oil Co, Japan's fourth biggest refiner, and South Korea's Hyundai Oilbank agreed yesterday to team up to sell more gasoline and diesel overseas, building ties between two firms part-owned by Abu Dhabi's International Petroleum Investment Co (Ipic).
Cosmo Oil said the two refiners, which have a combined capacity of just over one million barrels per day (bpd), would consider possible cooperation in refining and the supply and trading of oil and petrochemical products.
Cosmo Oil is owned one-fifth by the Ipic, which also owns 70 per cent of Hyundai Oilbank.
The two firms will cooperate in marketing oil products with an eye on Chinese and other Asia-Pacific markets, and may also link up in exports and the barter of products to optimise refinery operations, Cosmo said in a statement.
Strategy
Cosmo Oil said the deal is part of its aim to deepen its ties with firms closely associated with Ipic, which bought its stake last year. Ipic also owns stakes in Austria's OMV, Spain's CEPSA and refiner Parco in Pakistan.
"Just like the South Korean market, domestic oil demand in Japan is declining and we are targeting overseas," said a Cosmo spokesman.
With demand in the world's third-largest oil consumer falling as younger drivers seek out more fuel-efficient cars, Japanese refiners are investing in new port facilities and infrastructure to sell more of their product outside the country, although many lack the marketing expertise for large-scale exports.
South Korea's much bigger oil refineries are already partly oriented to the export market, but are facing increasingly tough competition from new plants in India and, over the next several years, China and the Middle East as well.
