(Repeat of story published late on Wednesday)
(Adds details, background)
By Luke Pachymuthu and Yaw Yan Chong
SINGAPORE, Feb 27 (Reuters) - Chemoil Energy CHEL.SI will launch its marine fuel business in Fujairah next month and will more than double the storage capacity within two years, as the company keeps its expansion on track after the death of its founder, its new chief executive said on Wednesday.
The Singapore-listed company also plans to start trading clean oil products such as diesel and jet fuel in Asia from 2009.
This will be supported by its new storage terminal in Singapore, to be launched on Thursday, as well as its facilities in the Americas and Fujairah, Clyde Michael Bandy, also company chairman, told Reuters in an interview.
The expansion of Chemoil’s terminal in the United Arab Emirates from 100,000 tonnes is in line with the aggressive global vision of its founding chairman Robert Chandran, who died in a helicopter accident in Indonesia on Jan. 7, he said.
Bandy, however, said he will take a more measured approach to expanding the firm, which is worth half a billion dollars, and is the biggest supplier of marine fuel in the Americas with annual revenue of $5.3 billion.
“We are going to drive this company forward and we are going to do it in a very thoughtful fashion... it would be foolish of me to say that my risk appetite is the same as Bob‘s,” said Bandy, who has been in the oil business for 35 years.
Chemoil, whose shares plunged 24 percent within the two weeks after Chandran’s death, posted on Wednesday $14.4 million in fourth-quarter net profits, taking its full-year net to $30.3 million, down from $57.8 million in 2006.
The lower profits were largely due to full-year losses of $84.89 million in the derivative market, versus a $58.07 million gain in 2006, due to volatile markets as oil prices hit records.
Bandy said the company also lost its lease for storage tanks in Singapore last year while its substitute floating storage facility was not fully operational after suffering two mishaps.
But the launch of its Helios Terminal in Singapore, which started operations on Jan. 10, and Middle East trade will help its business this year, he said.
The foray into Fujairah will put it in direct competition with Vitol, which will soon start trading in a region dominated by a small group of Arab players and had already seen several large foreign firms fail in their attempts to cement a foothold in the market.
“I think if you run the numbers, Fujairah is the largest fuel oil port in the world now... its outside the Strait of Hormuz, every oil tanker loading crude oil out of the Middle East will entertain that as a stopping point for fuel,” Bandy said.
Fujairah handles about 100 vessels at any given time for various marine services including re-fuelling, port data show.
The 59-year-old Bandy, previously president of ChevronTexaco’s Fuel and Marine Marketing LLC (FAMM), said he would continue Chandran’s ambitions of expanding the company’s geographic footprint and its product offering.
He said Chemoil, which also operates a joint venture sales and marketing operation in refined products with Japan’s Itochu Petroleum in the U.S. West Coast, is expected to start a similar trading business in Asia. The region will also see ConocoPhillips (COP.N) starting products trade and big players such as Trafigura expanding their business. Chemoil is in active discussions with the Singapore government to expand its new 450,000 cubic metres terminal by about 40 percent to accommodate clean products, while the phase two expansion of its storage facilities in Fujairah will also cater to both clean and residual fuel.
“It would be premature to say that 2008 will be the year you would see a significant rollout of this (clean product strategy). I would think we are talking 2009 and beyond,” he said. (Editing by Ramthan Hussain)