India is particularly important for Aramco, which is looking for refinery stakes in major oil-consuming economies to lock in customers ahead of its Initial Public Offering next year.
“U.S. crude is becoming more and more popular,” said the world’s biggest refiner Sinopec. There are three reasons for Asian oil buyers’ interest in U.S. crude: first, it fits the configuration of Asian refineries, which like to process high quality so-called light sweet crude that yields more petroleum products such as gasoline and diesel. Second, it’s cheap, with WTI trading at times at a steep discount to other oil benchmarks. Third, the cargoes are bought on a spot basis, giving refiners flexibility to complement their more traditional Middle Eastern supplies that are sourced via long-term contracts.
China’s Sinopec has agreed to pay almost $1 billion for a 75 percent stake in Chevron’s South African assets and its subsidiary in Botswana, securing its first major refinery on the continent. The assets include a 100,000 barrel-per-day oil refinery in Cape Town, a lubricants plant in Durban as well as 820 petrol stations and other oil storage facilities. They also include 220 convenience stores across South Africa and Botswana. With a growing middle class, demand in South Africa for refined petroleum has increased by nearly 5 percent annually over the past five years.
