Due to tight production, the Royal Petroleum Company's supply to the Ottoman region was definitely limited in the first few years. It would only be a few thousand tons.
But if the market is established in the future, then the refinery here in Baku can still expand production, but I dare not say if there is more time, but there will still be 10,000 to 20,000 tons.
Zuo Chengsheng is very satisfied with this data. The current price of kerosene on the market is still relatively high.
Because although the current kerosene appears as a cheap substitute for whale oil, its pricing is inevitably affected by whale oil.
In the early years, due to the acceleration of local industrialization and the increase in people's income, the demand for night lighting also increased sharply. Therefore, whale oil became more and more expensive. Taking the Shanghai area as an example, from the 25th year of Xuanping
From two cents per liter, the price skyrocketed to six cents per liter. At its peak, it once reached six cents per liter and five cents per liter.
Its high price makes it simply unaffordable for ordinary families.
This is also the reason why attempts were made to refine kerosene from coal in the early years.
After the technology of refining kerosene from petroleum appeared, all this changed. The kerosene extracted from the first batch of petroleum extracted by the Royal Petroleum Company was cheaper than whale oil, but it was not much cheaper in fact. It also required 1 liter of kerosene.
About five cents.
But this was only the price at the beginning. Later, in order to compete for the market, the price was continuously reduced. Up to now, the kerosene on the ordinary market is about 2 cents per liter, and the corresponding whale oil has also dropped to more than 2 cents, returning to Xuanping 20.
five-year price.
In fact, oil companies could have continued to lower prices because the cost of their kerosene was so low that even if it cost a few cents per liter, they would still be able to make a profit.
However, their current output is still too low, which is far from enough to meet the huge market demand. Now the price is already in short supply, and it makes no sense to continue to reduce prices.
Even the kerosene provided to the West Sea Trading Company is mined, refined and sold directly in Baku, eliminating expensive freight costs, but even so, the Royal Petroleum Company did not lower the price!
The purchase price of Xihai Trading Company is not cheap either. It costs almost 1.6 cents per liter. This price is already almost the same as the purchase price of central provinces.
But the difference between Zuo Chengsheng and domestic kerosene agents is that he has free pricing power in the Ottoman region and will not be affected by too many other influences.
As for how much Zuo Chengsheng sells to the Ottomans, the oil company is too lazy to care. They only need Zuo Chengsheng's annual sales to reach their predetermined target, and then they will continue to cooperate.
If it is said that the price is deliberately raised and the product cannot be sold and the sales volume cannot be increased, Zuo Chengsheng's agent qualification will naturally be revoked.
Therefore, this pricing needs to consider both profit and maintaining a certain sales volume.
In order to open up the market, Zuo Chengsheng decided to sell the first batch of kerosene tested at a low price according to the domestic price in Shanghai. The profit was not high, but it would help quickly open up the market.
As long as the market is opened and consumption habits are developed, prices will naturally follow.
This method was also one of the most common methods used by Datang merchants to do business overseas.
First, use a large amount of cheap industrial goods to impact the local market, seize market share, and defeat local competitors.
Once you kill your competitors, it's time to raise prices and reap huge profits.
The most typical one is Datang’s foreign cloth trade!
The cost of machine-made cloth in the Tang Dynasty is low, even if shipping costs are included, it is much cheaper than the homespun cloth from indigenous countries.
Therefore, the merchants of the Tang Dynasty took advantage of low prices to attack the cloth market in indigenous areas, squeezing out all the local cloth workshops.
After the market share increases, prices will be gradually raised, not very quickly, but a little at a time, gradually cultivating market acceptance, and reaping huge profits.
India, Europe and other regions, the two most important overseas markets for textiles in the Tang Empire, basically went through such a process.
Zuo Chengsheng also planned to sell oil in this way in the Ottoman Empire. He would make a small amount of money in the early stage, expand sales channels, open the market, and cultivate consumption habits. After all these were completed, it was time to reap profits.
But even so, his profits are not low, at least a gross profit of more than 20%.
It seems that the profit margin is not high, but the total volume is huge!
If one thousand tons of kerosene can be sold to the Ottoman region a year, then it will be an annual business of 200,000 yuan, with a profit of tens of thousands.
If this figure is increased to 10,000 tons in a few years, then this will be a big business of one to two million yuan, with a profit of at least ten or two hundred thousand yuan.
Although their Xihai Trading Company made hundreds of thousands in the past six months, the previous trade was abnormal and not sustainable.
Under normal circumstances, it is still the same as now, and the profit is estimated to be only 70,000 to 80,000 yuan in one year.
After formulating many plans, Zuo Chengsheng attracted many of his Ottoman channel distributors.
These are all Ottoman merchants who have cooperated with him in the past, and most of them are Ottoman merchants who have long-term cooperation with him. It is through their use that Xihai Trading Company can continuously sell goods to the entire Ottoman region.
These people are actually the compradors among the Ottomans.
They earned huge profits from selling Datang's goods, which led them to spare no effort to help Datang's goods open up the local market.
After initially finalizing the channel, Zuo Chengsheng found the Royal Petroleum Company and first purchased a small batch of 100 tons of kerosene, preparing to bring it to Ottoman to test the market.
These one hundred tons of kerosene were quickly divided among his dozen or so cooperative businessmen.
This is not the key, because everyone has made reservations in advance to test the water.
The key thing is that after this batch of kerosene entered the Ottoman region, its sales speed was astonishingly fast.
Not long after, more than a dozen businessmen under Zuo Chengsheng came to the door, saying that they had bought out all the kerosene and they wanted to continue to buy more.
The situation is gratifying!
Immediately, Zuo Chengsheng found the Royal Petroleum Company and said that the Ottoman region had a huge demand for kerosene and was planning to purchase another 500 tons. He also said that he was confident of selling at least 2,000 tons within a year.
But in the face of Zuo Chengsheng's request, the Royal Petroleum Company refused.
And when I refused, I still looked extremely heartbroken!
"It's just trial production now, a lot of equipment is still being debugged, and the output has not increased at all. If you wait, I will probably be able to get you a hundred tons next month!"
The people at Royal Petroleum Company are also extremely anxious now.
Xihai Trading Company is not the only one who comes to purchase goods. In fact, all the agents now are rushing for the supply of goods.
But the output is insufficient!
And what’s missing is not oil, but refineries!
At the Suzhou Oilfield, the current annual crude oil output is only about 100,000 tons, and the supporting Suzhou Refinery can just digest it.
But for the oil being mined in Baku, there are not enough refineries.
This is mainly because Baku oil is being exploited too quickly and the output is too high, and the supporting refinery invested by Royal Petroleum Company has not yet been completed. Even if the current Baku Refinery and Kuri Refinery are completed, their designed production capacity is far away.
It is far from being able to meet the current production of Baku oil fields.
A month ago, the Royal Petroleum Company drilled a high-yield oil well in Baku, with a daily output of 150 tons. The annual output of this oil well alone reached about 55,000 tons.
At present, the annual output of the Baku oil field has reached 200,000 tons, and this is because the oil company has deliberately slowed down the pace of oil extraction. Otherwise, there would be no refinery to refine so much oil.
Even though Royal Petroleum Company has invested heavily in building new refineries in Baku and other places and expanding the capacity of the Baku Refinery and the Kuri Refinery, it will take time to build these plants.
So what we are doing now is that we have crude oil, but the refineries are not enough.
Specifically in Baku, the current refinery has not yet been fully completed. It is currently only a small-scale trial production in the early stage, and more equipment is still being debugged and installed.
The Royal Petroleum Company estimates that the refinery's full designed capacity will not be fully utilized until the 36th year of Xuanping's reign at the earliest.
As for now, we can only occasionally produce dozens of tons or hundreds of tons.
Zuo Chengsheng had no choice about this.
If he had a license, he would have built a refinery by himself.
It's a pity he didn't.
But just because he didn't, it doesn't mean that others didn't either.
With the development of Baku's oil, the Ministry of State-owned Enterprises finally couldn't bear it anymore. After careful preparations, it directly established the Imperial Oil Company.
When you hear the name, you know that it is not a simple enterprise. The Ministry of State-owned Enterprises is planning to directly invest millions of cash in this company as capital, and at the same time, it has granted the company a petroleum license, allowing it to explore, exploit, refine petroleum and other series of activities.
Related Business.
What's interesting is that the main backbone of the Imperial Oil Company was transferred from the Imperial Oil Company.
This is not a poaching by Imperial Oil Company, but a talent actively supported by Imperial Oil Company.
After all, Imperial Oil Company is also an official enterprise, and the establishment of this enterprise was approved by Lin Ziran, so Imperial Oil Company must also support the establishment of this company.
Imperial Oil Company has not yet found an oil field, but this does not prevent them from starting business. They directly built a refinery first and prepared to import crude oil from Imperial Oil Company for refining.
Anyway, Royal Oil Company's oil production in Baku is increasing, and relying on their own capabilities, they are no longer able to build so many refineries.
In addition to building refineries, Imperial Oil Company's focus is still on finding oil!
And they also know that the mainland has basically been plundered by the Royal Petroleum Company. Except for the Suzhou oil field and a few small oil fields, there is no other oil at all.
So they set their sights on other places, such as Donghai Province, Dayuan Island, Qiongzhou Island and other places, but the more important thing is the Nanyang region.
After this search, they actually found oil on Taiyuan Island. Although it was only a small oil field, it ended the history of Imperial Oil Company without an oil field.
Immediately afterwards, they discovered traces of oil on Sidan Island in Banten Province, and immediately dispatched a survey team there!