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Emirates National Oil Co (ENOC) is reducing its presence in the Asia fuel oil market after deciding to slash its storage capacity in Singapore.

Dubai-based ENOC, a majority shareholder in terminal operator Horizon Terminals Limited, of which Horizon Singapore Terminals is a subsidiary, cut its fuel oil storage capacity at its Singapore facility to around 60,000 cubic metres (cbm) at the beginning of this month. Chinese firm Brightoil Petroleum is reported to have taken over the vacated capacity.

"ENOC remains committed to its business and operations in Singapore across all portfolios. As part of its continuous and overall review of business activities, ENOC -- like all organisations -- balances product portfolios," an ENOC spokesman said.

The news follows ENOC's decision in July 2010 to cease its bunkering activities in Fujairah, the world's second-largest bunker port. The company was estimated to have been selling approximately 200,000 tonnes per month before its decision to exit Fujairah.

ENOC was reported to have pulled out of the Fujairah marine fuels market due to competition from its business rivals and from other ports in the region, which in turn led to a fall in sales volumes.

A principal reason for the decision was believed to be the fact that ENOC did not own the barges it had been using to carry out deliveries, which then resulted in the company finding it difficult to compete with other players in the market. As a result, ENOC was estimated to have lost around $20 million from its bunkering operations in Fujairah since relaunching in 2009.

Meanwhile, fuel oil trading manager Patrick Pak resigned from the firm last month and was replaced internally by senior trader Gerard Sum in a two-man trading team.

Commenting on the issue of changes in personnel, ENOC said: "The movement of individual staff also does not mean change in existing business activities. Singapore and the larger Asian market will continue to be focus areas for ENOC."

ENOC first entered the Asian fuel oil market in 2006 with approximately 200,000 cbm of storage capacity, of which around 90,000 cbm were sub-leased in 2008 and returned to the firm earlier this year.

The decision to slash storage to 60,000 cbm will mean that ENOC's capacity will be significantly smaller than the majority of medium-sized players with capacity of 100,000-150,000 cbm.

ENOC typically purchases fuel oil cargoes for sale into the Singapore bunker market via export tenders. Singapore, the world's largest marine fuels market, currently sells 3.3-3.5 million tonnes per month.

It is understood that ENOC is continuing to supply fuel in the spot ex-wharf market, but at reduced volumes, and has stopped doing term deals with barge operators.

At the start of this week ENOC was seen offering 20,000 tonnes of 380-cst in the physical pricing window at a premium of $1.00 per tonne, higher than the day's value of minus $2.50. The company has not been seen in the fuel oil swaps market for over a month, according to market sources.