Pressure in Asia leads Oman to look west
Oman Trading International Limited (OTI), an energy and investment vehicle created as a joint venture between the Omani government and Vitol Group, is seeking fuel-storage tanks in Africa in order to improve sales to the region. Oman is the Middle East’s largest non-OPEC producer of oil. Alongside the African endeavour, the company is also opening an office in the US, largely in order to sell South American crude oil.
The approximately $50 million investment will come in the form of storage facilities in Kenya, Tanzania or Mozambique and is intended to aid the delivery of oil products to Africa’s interior, an operation that is hampered by the lack of ports, according to OTI’s CEO Talal Al Awfi. The company is currently seeking the capacity to store up to 100 million cubic meters of refined products and intends to complete the acquisition by the end of 2015. OTI’s investment could reach $100 million, depending on whether the company expands into fuel distribution, said Al Awfi. Related article Sukuk’s bolster investment and trade
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Oman currently sells the majority of its oil in China, however the country faces stiff competition from non-OPEC producers and Russia recently became China’s top oil partner, replacing Saudi Arabia, according to Al Awfi. As such, OTI’s expansion into Africa seems to be an understandable move, however issues with Africa’s famously limited infrastructure will have to be surmounted first.
OTI is also planning on opening offices in the US and has hired an oil trader in Singapore. The US office will be used to trade South American crude oil, according to Al Awfi, which has been forced from the US market by increased domestic production. The hiring of an oil trader in Singapore comes as part of OTI’s attempts to increase the amount of petrochemical products it trades to approximately 20 million metric tons.
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