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Reuters: Shell surprised by report Kuwait may drop China JV

Mon Oct 1, 2007 3:36pm BST
MADRID, Oct 1 (Reuters) – Royal Dutch Shell (RDSa.L: Quote, Profile, Research) was surprised by a report last week that Kuwait wanted to drop it as a partner in a project to build a $5 billion refinery in China, its Chief Executive Jeroen van der Veer said on Monday.

Last week, Kuwaiti news agency KUNA said there were various reasons state-owned Kuwait Petroleum Corp. no longer wanted Shell involved on the Guangdong plant, including objections from China’s National Development and Reform Commission.

“We were surprised to read that but that’s about it,” Van der Veer told Reuters on the sidelines of an energy conference in Madrid.

“We have all kinds of options about refineries in China. We look at the various options and discussions are on-going but I can’t be more specific,” he said.

Shell had hoped to gain a foothold in the domestic fuel market of China, the world’s second-largest energy consumer, through the Guangdong plant.

The company failed to win a share in another refining project last year.

KPC and China’s largest refinery Sinopec received preliminary Chinese government approval for the Guangdong plant last year. In August, Sinopec said Shell and U.S. Dow Chemical Co (DOW.N: Quote, Profile, Research) were also in talks to participate.

Van der Veer would not comment on problems at the Kashagan oil field where the Kazakh government is threatening to strip Italy’s Eni (ENI.MI: Quote, Profile, Research) of the leading role in a consortium that includes Shell because of delays and cost overruns.

“We are working in a consortium and you have to ask the leader and (ENI CEO Paolo) Scaroni isn’t here today,” he said.

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