Shandong 07 oil products output tops 10 mln T -paper

Oil products output by independent refiners in eastern China's Shandong province topped 10 million tonnes last year and sales exceeded 100 billion yuan, the official China Securities Journal reported on Monday.

Local refiners were expecting better results in 2008 after they processed 23.19 million tonnes of crude oil and fuel oil a year earlier, the newspaper said, quoting the Shandong Oil Refining Association.

The report did not provide any percentage change for the indicators, and statistics for the private oil sector are usually difficult to come by in China.

Local refiners kept operating in the second half of last year when widespread diesel shortages hit China, even though profit margins for many plants shrank rapidly due to soaring fuel oil costs, the report said.

Oil products storage capacity and transport have been strained since October, and refiners had to book shipments five to six days before loading, an official with a local storage and shipping firm was quoted as saying.

Beijing and its state-owned oil majors blamed shutdowns by private oil firms as well as high crude oil prices for last year's diesel crisis.

Twenty-one independent refiners in Shandong, with crude processing capacity of 45 million tonnes, produce 5-6 percent of China's oil products, while accounting for 8-10 percent of the country's processing volume, the paper added.

These plants, unable to access more crude beyond a small quota and feeding mostly on fuel oil, got some extra crude oil supply since November from state-owned oil firms. Even though these state-owned firms are operating at full capacity, Beijing has ordered them to ensure domestic supplies are sufficient.