July 6, 2012:

Showa Shell Sekiyu KK, Japan's fifth-largest refiner, said on Friday it expects to refine 17 percent less crude oil in total for domestic consumption and exports in the July-September quarter than a year earlier. The drop to 7.1 million kilolitres (485,400 barrels per day) reflects the closure of its subsidiary's Ohgimachi factory in September last year and the scheduled maintenance at Seibu Oil's 120,000 bpd Yamaguchi refinery in western Japan for about a month this September, a company spokesman said. Toa Oil, in which Showa Shell has 50.1 percent, permanently shut the Ohgimachi factory, including a 120,000 bpd No.5 crude distillation unit (CDU), at the two-factory Keihin refinery on Sept. 20. Showa Shell has a 38 percent share in Seibu Oil. Showa Shell sees its refining for the domestic market at 6.94 million kilolitres (474,500 bpd), down 7 percent from the third quarter last year.

In Japan, the world's third-biggest oil consumer, oil demand is on a downward trend, except for one-off effects from reconstruction and the need from utilities to burn oil to make up the loss of nuclear power amid safety concerns after last year's earthquake and tsunami triggered a nuclear disaster.  Showa Shell, which is 35 percent owned by Royal Dutch Shell and nearly 15 percent owned by Saudi Aramco, refines crude at its four group refineries in Japan with total refining capacity of 538,000 barrels per day. Crude will be processed at the 210,000 bpd Yokkaichi refinery, Toa Oil's 65,000 bpd Keihin refinery and Fuji Oil's 143,000 bpd Sodegaura refinery. Showa Shell has 6.6 percent of Fuji Oil's parent, AOC Holdings.

By Reuters