ExxonMobil sent its global oil marketing team to China this week in an effort to gain access to independent, or teapot refiners who are big foreign crude buyers in the world’s largest oil importing country. Getty Images photo by Guang Niu.
Exxon marketing blitz for teapot refiners not seen before
ExxonMobil dispatched its global oil marketing team to China this week in an effort to gain a toehold with China’s independent, or teapot refiners, according to Reuters.
The move highlights the clout the 40 teapot refiners have on the global oil market since winning crude import licenses from the Chinese government in 2015.
According to Reuters, the teapot refiners are big consumers of foreign crude China, the world’s largest oil importer. Teapot refineries buy one-fifth of China’s 9.6 million barrels of crude per day.
Exxon sent a dozen traders and marketers, including Thomas Martenak, global crude marketing manager, to an oil show in Dongying.
Dongying is the home of the Shengli oilfield and is the hub of independent refiners in the eastern province of Shandong. There are over 32 refineries operating in Dongying with an annual refining capacity of 69 million tonnes, or 1.38 million barrels per day.
Along with handing out ExxonMobil gift bags in Dongying, the marketing team entertained prospective customers and traders at a dinner attended by about 200 people.
According to Reuters, this kind of marketing blitz is unlike Exxon’s usual approach of one-on-one meetings.
“I have never seen ExxonMobil ever do this kind of thing in my whole career,” Lau Kay Hoe told Reuters. Lau is a recently retired delegate who worked for Exxon for over three decades in shipping and trading.
The Exxon team arrived weeks after China and the US agreed that US energy sales are crucial to offsetting the $335 billion trade deficit the US has with China.
Martenak says Exxon was more drawn to the growing clout of Chinese teapot refineries, and not politics. However, this was the first publicity push by the company’s oil sales and supply team in eight years since he was named global marketing chief.
“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,” Reuters reports he told a seminar on Tuesday.
Martenak and his team also met with potential teapot customers in private meetings during the week, but he told Reuters that their main job was to act as Exxon’s “ambassador”, rather than deal makers.
Exxon and Chevron are both late to the Shandong market, according to an independent refining executive who spoke to Reuters.
“They are very strong in global supply sources, but compared to traders like Mercuria, Trafigura and Vitol, their knowledge of the local market is not as deep”, the executive said.
Vitol, Trafigura and Mercuria are some of the companies that saw an opportunity in the Chinese teapot refinery market and Exxon’s rivals BP and Royal Dutch Shell have already made inroads into the market.