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No plans for increasing Showa Shell stake says Aramco

oilandgasnewsonline.com: No plans for increasing Showa Shell stake says Aramco

Volume: 25, No. 15: April 14 – 20, 2008
DOHA:

Saudi Aramco has no plans to increase its stake in a Japanese refiner but continues to seek a share in a plant in China, a company official said.

“We have no plans to increase the stake in Showa Shell refinery at this time,” Adil Al-Tubayyeb, vice president for marketing and joint venture coordination told Reuters.

Aramco has a 15 per cent stake in the Showa Shell Sekiyu, and is the company’s second biggest investor after Royal Dutch Shell. In December, the company said it may increase the stake. State-run Aramco hopes to conclude talks this year on a stake in Sinopec Group’s 200,000 barrels per day east China Qingdao refinery, Tubayyeb also said
“We are continuing discussions on this and we are hoping they will be concluded this year,” he said.

Aramco has been in talks for a stake in the Qingdao plant for several years, in addition to its commitment to a plant in Fujian. Tubayyeb declined detail the size of the stake or investment Aramco wanted in the plant.

Aramco was also progressing with feasibility studies for four new domestic refineries, Tubayyeb told reporters. The refineries will add up to 1.6 million barrels per day (bpd) to current domestic crude processing capacity of 2.098 million bpd.

He declined to give estimates on the costs of the new refineries. Rising costs have hit energy projects worldwide including the new planned plants in the kingdom. 

Industry sources say estimated cost for two joint venture plants between Aramco and France’s Total and ConocoPhillips has topped $10 billion, up from initial estimates of around $6 billion.

Saudi Arabia was still looking for international partners to participate in building a new 250,000 to 400,000 bpd refinery in Jizan, Tubayyeb said.

The kingdom wants the plant to be entirely privately owned. But international companies have shown little interest, due to the long distance from the plant from oilfields.

The cost of shipping crude to the plant from Saudi terminals further north in the Red Sea would hurt the plant’s profitability, industry sources say. The refinery also has no obvious export market, sources say.

http://www.oilandgasnewsonline.com/News.asp?Article=24353

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