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WRAPUP 1-Cosmo Oil, Showa Shell to cut Q1 crude runs
January 5, 2010 / 8:00 AM / 8 years ago

WRAPUP 1-Cosmo Oil, Showa Shell to cut Q1 crude runs

* Cosmo Oil plans to cut Jan-Mar refining 4.6 pct y/y

* Showa Shell sees Q1 crude runs down 3 pct y/y

* Cosmo to restart Yokkaichi CDU on Wednesday after delay (Adds Showa Shell refining plan, updates throughout)

By James Topham and Osamu Tsukimori

TOKYO, Jan 5 (Reuters) - Cosmo Oil Co Ltd 5007.T and Showa Shell Sekiyu KK (5002.T) will refine less crude in the first quarter, the firms said on Tuesday, joining other Japanese oil firms in curbing production to start off the year.

Oil demand in the world’s third-largest consumer nation has been steadily falling for years, but the trend accelerated last year during Japan’s worst recession in decades, leaving the country with around 1 million bpd of excess refining capacity.

Cosmo Oil, which has the capacity to refine 635,000 barrels of oil per day, said it would refine 7.225 million kilolitres, or 505,000 barrels per day (bpd) of crude oil for January-March, down 4.6 percent from a year earlier.

Showa Shell Sekiyu KK (5002.T), Japan’s fifth-largest refiner, said it planned to refine 8.77 million kilolitres of crude oil in January-March, down about 3 percent from a year earlier amid sluggish domestic oil product demand. [ID:nTKB006643]

Refining for the domestic market will fall 9 percent from a year earlier to 7.68 million kl amid continued anaemic demand. But refining for exports is projected to jump 77 percent to 1.09 million kl due to robust demand for diesel, Showa Shell said.

Many Japanese refiners have been reining in production for the past year as domestic oil product sales hover at two-decade lows, due to a greying population and a push towards greener energy.

Cosmo, Japan’s fourth-largest oil firm, plans to refine in January alone 2.51 million kl, up 2.1 percent from a year ago, in part because it expects to restart its 85,000 bpd crude distillation unit (CDU) at its Yokkaichi refinery on Wednesday.

The company said last November it would delay the restart of the CDU until January or later due to weak domestic demand. The unit was initially due to be restarted in November.

Last month, top refiner Nippon Oil Corp. 5001.T said it planned to refine 5.36 million kilolitres of crude oil in January, up 1 percent from a year earlier but down 14 percent from the level of two years ago.

Following are Cosmo Oil’s refining plans for February and March in kilolitres and percentage changes from a year earlier.

Volume % Change

February 2.32 mln kl -3.4

March 2.395 mln kl -12.5 (Reporting by James Topham, Osamu Tsukimori and Miho Yoshikawa; Editing by Clarence Fernandez)

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