Brightoil Petroleum, the mainland's only privately owned fuel supplier to ocean-going vessels, plans to spend around US$350 million this year to build fuel-storage facilities and buy oil tankers.
The company has embarked on an expansion plan in upstream natural gas field development and downstream fuel trading and logistics.
After the break-up in 2006 of state-owned monopoly China Marine Bunker PetroChina (Chimbusco) - a joint venture between oil titan PetroChina and shipping giant Cosco Group - Brightoil obtained a licence to operate. As of 2009, the company said it had amassed a 37 per cent share of the fuel-supply market for the mainland's ocean-going vessels.
In mid-2009, it expanded its fuel sales from the mainland to Hong Kong, Singapore, Rotterdam and Malaysia. It aims to operate in Houston this year. It is building a 2.2 million cubic metre (mcm) fuel storage facility in Zhoushan, Zhejiang province - expandable to 5.5 mcm - and 4 mcm of storage facilities in Dalian, Liaoning province - expandable to 12 mcm.
The initial phase of development of the two facilities will cost US$2.5 billion and is scheduled to come on stream early next year. Both will be linked to government-owned strategic oil reserve facilities.
Brightoil has also bought nine oil tankers, with five to be delivered between next year and 2013. It aims to raise tanker capacity to two million deadweight tonnes from 0.45 million dwt currently.
Executive director William Chia said this year's capital expenditure will total US$350 million. The company has around US$500 million on hand. China Development Bank's Hong Kong branch has extended US$4 billion of credit lines.
Brightoil had net profit margins of around 9 per cent in the past 18 months excluding derivatives gains and non-recurring items.
It attributed that healthy result partly to the trading performance of sister firm Shenzhen Brightoil, which the firm said bought fuel in the international markets at low prices, which it then resells to Brightoil Petroleum at a 3 per cent discount to Singapore benchmark prices.
Brightoil is developing a gas field in the Xinjiang autonomous district adjacent to a site owned by its chairman, Sit Kwong-lam. Executive director Gregory Channon said Sit may sell his project to Brightoil.
Brightoil's share price has risen sevenfold in the past 18 months.