Oman, the largest non-OPEC producer of oil in the Middle East, is planning to establish a foothold in Africa to promote its business interests in trading fuel and crude
Oman Trading International Limited plans to buy, lease or build fuel storage tanks in East Africa to boost sales on the continent. The company intends to invest up to US$50mn in facilities to store fuel in Mozambique or Tanzania to help supply markets in Africa’s landlocked interior, said CEO Talal Al Awfi without specifying the target markets. The planned storage facility will have a capacity of up to 100mn cu/m of refined products, and a deal for the facility is expected to be completed before the end of this year.
The company is also looking to expand operations to the USA. Opening an office there is being planned for the first half of 2016 and it will enable the trading company to deal in refined products and Latin American crude. The increased local production in the USA has pushed out exports from countries like Colombia and Venezuela, and much of that crude from Latin America is now flowing to Asia, where Middle Eastern crudes were traditionally dominant, explained Al Awfi.
Oman sells most of its oil to China, a market where Middle Eastern crude producers are facing increasing competition from suppliers that are outside the region. According to data from the Beijing-based General Administration of Customs, Russia surpassed Saudi Arabia to become China’s top supplier in May. Infrastructure investments in Africa and a physical presence in the USA are vital for Oman Trading to extend its reach beyond traditional markets in Asia, Al Awfi said.
The government of Oman owns 70 per cent of Oman Trading and plans to buy the other 30 per cent stake in the company held by Vitol Group. According to Al Awfi, the government of Oman had intended to take full control of Oman Trading ever since it founded the business in 2006.
