Wednesday, October 13, 2010

China Aviation Oil and BP form jet fuel, gas oil supply venture

SINGAPORE Oct 13 (Reuters) - China Aviation Oil (CNAO.SI: Quote) has inked a four-year agreement with oil major BP Singapore Pte Ltd (BP.L: Quote) to jointly supply jet fuel and gas oil globally. The collaboration, which will take effect from Jan. 1, and was announced late on Tuesday, will involve both CAO and BP pooling a portion of their jet fuel and gas oil supplies to be sold to markets in Middle East, Asia Pacific including China, and Europe.

The shared pool will be managed by both companies and administered by BP. Both will share the realised profits or losses from the venture equally. The agreement does not affect other supply and trading activities of the two firms.

BP will also provide CAO with information sharing services, marketing and training, while both companies will continue to explore investment opportunities together.

"We expect the collaboration agreement to have a positive impact on the earnings of CAO for FY2011," Meng Fanqiu, CAO's chief executive officer, said in a joint statement. (Reporting by Jennifer Tan; Editing by Ed Lane)

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