ExxonMobil breaks with tradition in wooing China's oil market
Singapore. ExxonMobil Corp’s global oil marketing team stormed into China this week hoping to elbow aside rivals and gain access to the nation’s “teapot” refining market, executives told Reuters.
The push by Exxon, the world’s biggest oil and gas company by market value, to court the independent refiners, known as teapots, illustrates the clout they are exerting on the global oil market since winning crude import licenses from the government in 2015. The refiners are big foreign crude buyers in a country that is now the world’s largest oil importer.
To make up for a late arrival, Exxon this week sent a dozen traders and marketers, including global crude marketing manager Thomas Martenak, to an oil trade show in Dongying, a hub for the independent refiners in the eastern province of Shandong.
The team included crude oil traders, products marketers and finance staff from Houston, Singapore, Thailand and Shanghai.
At a booth at the center of Dongying’s downtown exhibit hall, staff handed out gift bags containing backpacks emblazoned with the ExxonMobil logo, flanked by stands from Malaysia’s Petroliam Nasional and France’s Total (TOTF.PA) and about 20 local refiners.
On Monday evening, Exxon’s team wined and dined prospective customers and traders at a dinner attended by around 200 guests, according to multiple people who attended. Goodie bags at the party contained flasks for travel use, they said.
The marketing blitz is a departure from Exxon’s traditional methods of peddling their crude such as one-on-one meetings.
“I have never seen ExxonMobil ever do this kind of thing in my whole career,” said Lau Kay Hoe, a delegate who retired recently after more than three decades working in shipping and trading at the company.
Exxon produces 2.5 million barrels per day (bpd) of crude from Europe, Africa, the Middle East and the Americas that mainly supplies its own refining system.
The company push occurs amid a looming trade war between the United States and China, the world’s two biggest economies. The two sides agreed in talks earlier this month that U.S. energy sales were crucial to offsetting the $335 billion trade deficit the U.S. has with China, its top trading partner.
Martenak, who flew in from Houston for the event, said the firm was drawn by the growing importance of China’s independent refiners in the regional market, rather than politics.
This was the first publicity push by the oil sales and supply team in the eight years since he took over the reins as the global marketing chief, he said.
“We probably are not as fast as some of the traders ... We want to make it up quickly so we can become a major supplier in the region,” he told a seminar on Tuesday.
Martenak’s team has also met with potential teapot clients in private meetings this week, but their main purpose was to act as Exxon’s “ambassador” rather than cutting deals, he told Reuters at its booth.
New rules from the International Maritime Organization requiring ships to use low-sulphur fuel starting in 2020 will also likely boost China’s need for U.S. sweet, or low-sulphur, crude, he said.