CNPC enters Myanmar fuel retailing market with Singapore brand

China National Petroleum Corp (CNPC) plans to establish petrol stations in Myanmar, making it the first major foreign investor to enter the South-East Asian fuel market.

The CNPC investment will be part of a strategy to take advantage of overseas retail margins. Last year, CNPC made a similar investment in Brazil when its global trading and refining unit bought a 30% stake in a Brazilian fuel dealer.

CNPC’s global unit, PetroChina International, is also handling the Myanmar investment.

CNPC considers Myanmar a prime frontier market for fuel retailing, where the local refining industry is barely existent.

The company intends to initially open petrol stations in Yangon, Mandalay and capital city Naypyidaw, Myanmar, under a longer-term goal of setting up hundreds of outlets in the country.

Instead of the PetroChina brand, CNPC’s first fuel station in Myanmar features the bright red logo of its wholly owned unit Singapore Petroleum (SPC), a refinery acquired by CNPC in 2009.

A PetroChina official was quoted by Reuters as saying: “The SPC logo is used as it’s one of the top brands in South-East Asia.”

The station was opened in downtown Yangon in March as a joint venture with Myanmar conglomerate Shwe Taung and is the first venture for the SPC brand outside Singapore.

Shwe Taung will now focus on upgrading and rebranding 18 stations in collaboration with SPC.

SPC’s 290,000bpd refinery in Singapore supplies around one million tonnes a year of fuel to Myanmar.

Foreign companies present in Myanmar have not yet made much progress in the retail fuel sector, as foreign investment in fuel retailing is prohibited either by subsidised pricing as in Indonesia or by a growing domestic refining industry as in Vietnam.

Singapore firm Hin Leong Trading, which has been the main fuel supplier to Myanmar, is reportedly exploring opportunities to enter fuel retailing in Myanmar with a local partner.

According to a Royal Dutch Shell spokeswoman, the oil company is reviewing an earlier brand licensing agreement with local fuel distributor Max Energy due to depressed fuels margins and capital pressures.

Meanwhile, Puma Energy, belonging to Swiss trader Trafigura, plans to enter the retail business in Myanmar. The company opened an oil products terminal and storage facility in May 2017.