By Francis Kan and YanChong Yaw
SINGAPORE, Dec 2 (Reuters)- - Socar Trading plans to expand its trading presence in Asia into fuel oil and naphtha next year, despite the recent departures of its two senior traders, a senior company executive said.
The Azeri state-owned oil trader will also make its Singapore office fully responsible for developing its crude oil trading business in Asia, including increasing its market share, particularly via term contracts, Arzu Azimov, vice-president of trading and operations, said in an interview with Reuters.
The expansion will also see Socar Singapore arbitraging fuel oil from West to East and supplying marine fuels in the world's largest bunkering port as well as securing oil storage facilities.
"We want to move more arbitrage fuel oil from West to East... and are looking to start a bunkering business in Singapore," he said.
The company currently trades around 200,000 tonnes of fuel oil a month, mainly in the West, but plans to increase this volume by sourcing greater quantities of the residual fuel from refineries in the Mediterranean, Azimov said.
It will also meet oil storage operators in Singapore next week to discuss leasing capacity as part of its plan to supply marine fuel.
Socar earlier made an investment to build a 650,000 cubic metre oil storage terminal in the United Arab Emirates port of Fujairah, expected to be operational in about 18 months.
The trader is already supplying naphtha as feedstock to petrochemical makers in Europe, and plans to supply the refined product to Asian buyers.
"From time to time we are long on naphtha, we will probably expand our business in Singapore," he said.
The Singapore office also plans to trade in the oil swaps market in the future as a tool to hedge its physical volumes.
"We are active in the swaps market, but it is all done out of Geneva. Eventually, Singapore will do it for themselves," said Azimov.
"At this stage we do it purely for hedging, we do not take positions for speculative trading," he added.
SINGAPORE OFFICE TO BE SELF-SUFFICIENT
Socar Trading, a unit of Azerbaijan's state oil giant Socar, set up its Singapore office in 2009 with the goal of selling greater volumes of Azeri light crude sourced from its parent company to Asian customers.
It wants to increase the volume of Azeri light sales in Asia from 5-6 million barrels a month currently to 7-9 million barrels in 2011, Azimov said.
The trader also wants the Singapore unit to handle all Azeri light sales to Asia, a responsibility which is currently shared with its Geneva office.
"We need Socar Singapore to be self-sufficient, to work with customers in China and Asia and increase the number of term contracts," Azimov said.
Socar Trading is currently in discussions to supply crude on a term basis to PetroVietnam and Indonesian state oil company Pertamina and is looking to do the same in India and China.
The firm is in the process of hiring one crude and one fuel oil trading and might look to employ a naphtha trader soon, to replace the senior traders who left last month.[ID:nSGE6AF09P]
The departures of former head of trading Steven Tan, a veteran with over 20 years of experience, and trading manager Tony Tan, also a veteran of Singapore's oil trading scene, were seen as a surprise in light of Socar's recent entry in Asia and its ambitious plans.
In October, Socar Trading chief executive Valery Golovushkin said that the firm was looking to make investments totalling $1.5 billion in oil refineries and terminals to facilitate its growing trading business. [ID:nSGE69B0GO] (Editing by Ramthan Hussain)