S99 - Singapore Petroleum Co Ltd

Singapore Petroleum Co Ltd (SPC)1 is a Singapore-based oil and gas company involved in the exploration, development and production oil and gas; petroleum refining, and marketing, distribution and trading of crude oil and refined petroleum products.

SPC operates in two segments: downstream, consisting of petroleum refining, marketing of products to airlines, commercial accounts, utilities, shipping accounts, and the storage and terminalling of finished oil products and upstream, consisting of the exploration, development, production and sale of oil and gas.

SPC holds interests in six exploration and production assets in the Asia-Pacific region: Block T06-3 in Australia, Block B in Cambodia, Kakap Production Sharing Contract (PSC) and Sampang PSC in Indonesia, and Block 101-100/04 and Blocks 102 and 106 in Vietnam. In September 2007, the Company announced that it has acquired offshore producing oilfields and exploration working interests in Bohai Bay.



Address 1 Maritime Square 10-10 HarbourFront Centre Singapore, 099253
Phone +6562766006
Fax +6562756006
Website http://www.spc.com.sg
Market Cap (2006) SGD$2.7 billion
Revenue (2006) S$8.574 billion
Employees 181


  • Chief Executive Officer, Executive Director - Koh Ban Heng
  • Non-Independent and Non-Executive Chairman of the Board - Choo Chiau Beng
  • Chief Financial Officer, SVP - Finance & Investor Relations - Lee Chiang Huat



SPC, with equal partner Caltex, owns half of the 285,000 barrels per day (45,300 m³/d) Singapore Refining Company (SRC) plant, a complex refinery capable of cracking crude oil.

The refining of crude oil to petroleum products remains central to the Group’s operations. Given the complexity of its refining facilities, SPC is able to refine heavy, medium and light crudes. SPC buys crudes from some 13 countries with the bulk of its supplies coming from the Middle East. The API gravity of these crudes range from 18 (mostly heavy/sour crudes) to 45 (mostly light/sweet crudes). In 2006, the Group processed more than 51 million barrels (8,100,000 m3) of crudes through SRC, its jointly-owned refinery on Jurong Island.


The trading unit actively trades in a variety of distillate and residual products which include Naphtha, Gasoline, Automotive Diesel Oil, Jet Fuel and Fuel Oil.

The Aviation Sales unit markets and supplies aviation fuel to airlines at four international airports in Singapore, Hong Kong,Bangkok and Taipei. SPC is reputed as a reliable supplier of quality aviation fuel in the Asia-Pacific region with more than 30 years of aviation fuel sales and marketing expertise.

The Distillates unit is responsible for the sales and trading of naphtha, motor gasoline (petrol), gasoil (diesel) and jet fuel (kerosene).

The Residue unit is responsible for fuel oil trading and marine sales activities. Fuel oil of various specifications, including standard bunker grades, is sourced directly from SRC as well as from the Group’s extensive network of global oil traders. The unit utilises its operational expertise, storage facilities and trading network to build and maintain SPC’s reputation as a fuel oil and bunker player with a premium brand in the Singapore market.

In 2006, more than 74.1 million barrels (11,780,000 m3) of crudes and refined petroleum products were handled in these downstream product channels. Of this volume, slightly more than 50.0 million barrels (7,950,000 m3) were products sourced directly from SRC with the balance of more than 24.0 million barrels (3,820,000 m3) sourced from the Group’s extensive network of oil majors, multinational oil traders and national oil companies.


In the pipeline business, SPC holds interests in three regional gas transmission pipelines. The 654-kilometre West Natuna Transportation System is the first Singapore cross border sub-sea gas pipeline carrying gas from the West Natuna Sea to Singapore. A consortium of PSC blocks in West Natuna including the Kakap PSC owns this pipeline.

The 468-kilometre Grissik-Batam-Singapore Pipeline is the second direct gas pipeline transmitting gas from Indonesia to Singapore. Gas to Singapore commenced in 2003 under a 20-year term contract between Singapore and Indonesia. The 536-kilometre Grissik-Duri Pipeline is a trunk line that transmit gas from the Grissik gas fields to Caltex's Duri facilities under long term contracts that commenced in 1998.


The Company owns a storage terminal for petroleum products at Pulau Sebarok to support its marine bunker operations and trading and marketing activities. The 220,000 cubic metres terminal consisting of 13 tanks is equipped with a deepwater jetty up to 160,000 tonnes displacement.


SPC has a dividend yield of 12%
SPC is one of the more attractive value stocks based on its fundamentals. It is trading at a price earnings ratio (P/E) of merely five times and an attractive dividend yield of over 12 per cent, at the price of $4.88 (as at Sept 5, 2008). Its very attractive dividend yield also makes it a defensive stock to hold in the medium term and value buy in the long run. Indeed, Merrill Lynch's Duke Suttikulpanich feels that there is plenty of value left in the tank for SPC, especially after its recent decline.

In a report published on Aug 20, Mr Suttikulpanich pointed out that SPC is 'one of the cheapest' in the regional refining and marketing sector. He expects a rebound in Singapore refining margins from mid September to boost SPC's stock price.

'SPC currently trades at 2008 (expected) P/E of 5.4 times, which represents a 28 per cent discount to regional peers. We firmly believe that this steep discount is unjustified… While we concede that the discount seems reasonable in view of SPC's increasing upstream business exposure, we believe the recent correction is overdone,' he added.

Even with the yield, there is an expectation a profit downgrade, given the business risk cited above - so it may be likely that the dividend yield cannot be taken for a granted, so do your own research!



  • September 15, 2008 - Defensive plays for uncertain times.2
  • Jul 29, 2008 - Singapore Petroleum Q2 profit up 0.6 pct3
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