Exxon's Cracking in Singapore

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My grandfather would have called it a bottomless pit, a term he used on me frequently at dinnertime. Today he'd likely be referring to the near-daily evidence of Asia's rapidly growing demand for resources to fuel the region's burgeoning manufacturing infrastructure.

Take Singapore's petrochemicals sector, for instance. Royal Dutch Shell (NYSE: RDS-A) (NYSE: RDS-B) is building an ethylene plant that produces 800,000 tons a year in the island nation, and ExxonMobil (NYSE: XOM) is in the very early stages of a second chemicals facility there. The Exxon plant, which will begin operating in 2011, will be capable of employing its cracker to turn out ethylene, polyethylene, and polypropylene. In March, Exxon completed a 75,000-ton expansion to an existing plant on the island, boosting its capacity to more than 900,000 tons.

Exxon's intensifying activity in the area is just part of a steady march into Asia by big, integrated Western companies. Just last month, for instance, it was announced that Chevron (NYSE: CVX) had won out over such European competitors as Norway's Statoil (NYSE: STO) and France's Total (NYSE: TOT) to work with PetroChina (NYSE: PTR) in the development in the Sichuan province of the big Luojiazhai sour-gas field. The sour gas will present technological handling risks, and it remains to be seen what political challenges the company will face over time.

What does all this mean for Foolish investors? To my way of thinking, it's yet another signal of the wisdom of investing in big companies that can roam the world in search of compelling investment opportunities and contest with obstructive governments, where necessary.

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