Royal Dutch/Shell Group and other refiners in Singapore, Southeast Asia's biggest oil processing centre, are running their plants at the lowest level in 15 years because of a fuel glut and slowing demand, analysts said.
Shell, Exxon Mobil Corp. and Singapore Refining Co., whose plants have capacity to process 1.3 million barrels of crude oil a day, are using just 60 percent of their capacity, said Ong Eng Tong, senior energy consultant at the Singapore unit of Itochu Corp., Japan's third-biggest trading house.
“The last time Singapore's refineries were running at such low levels was in 1985, 1986, when Indonesian refineries came up and reduced the demand” for Singapore's oil products, Ong said in an interview.
Oil companies committed to spend more than S$4.4 billion on their Singapore plants since 1994, betting that Asia would absorb increased output. Instead, the Asian financial crisis interrupted more than a decade of economic expansion. Five years later, the industry is still struggling to cope with a surplus of fuels that has left most refineries underutilized.