• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 3 hours Science: Only correct if it fits the popular narrative
  • 3 hours Crazy Stories From Round The World
  • 11 hours What are the odds of 4 U.S. politicians all having children working for Ukraine Gas Companies?
  • 16 hours EU has already lost the Trump vs. EU Trade War
  • 9 hours China's Renewables Boom Hits the Wall
  • 1 day ''Err ... but Trump ...?'' *sniff
  • 50 mins Do The World's Energy Policies Make Sense?
  • 10 hours Forget out-of-date 'dirty oil' smear, Alberta moving to be world's cleanest oil industry
  • 1 day Pioneer's Sheffield in Doghouse. Oil upset his bragging about Shale hurt prices. Now on campaign to lower expectations, prop up price.
  • 3 hours Impeachment Nonsense
  • 1 day Tesla Launches Faster Third Generation Supercharger
  • 16 hours Water, Trump, and Israel’s National Security
  • 2 days Passerby doused with flammable liquid and set on fire by peaceful protesters

Breaking News:

Russia Plans To Boost Crude Oil Exports

Aramco Pulls Out Of Joint Venture Talks With Petronas

Refining Malaysia

Saudi Aramco has pulled out of a planned joint venture with Malaysia’s state-owned oil company Petronas, concerning the construction and operation of a major refining and petrochemical complex in southern Malaysia, according to sources close to the deal.

The multi-billion-dollar Refinery and Petrochemical Integrated Development was planned to have a daily throughput rate of 300,000 barrels of crude, producing 7.7 million tons of petrochemicals annually. The complex would have also included a regasification terminal for LNG.

No reasons were given for the shelving, either by Aramco or by Petronas, with both companies telling the WSJ that they did not comment on speculation.

The Malaysian company last year sought to borrow US$7.2 billion to advance the project, estimated to be worth some US$20.1 billion. According to the Wall Street Journal, Aramco has concluded after a feasibility study that the project will not yield the desirable level of returns.

Both Aramco and Petronas have been hit by the oil price crash and it makes sense for the world’s largest oil company, by output, to be more cautious with future projects especially in light of its upcoming IPO in 2018. Yesterday, media reported that Aramco is seeking advisers on the listing, sending out requests for proposals to large and small investment banks. Aramco expects the IPO to bring in some US$100 billion for 5 percent of the company.

Petronas, for its part, has been looking for new revenue streams after having to axe 1,000 jobs and squeezing capex by US$11.3 billion (50 billion ringgit) over the period from 2016 to 2020.

The Malaysian company last month announced it had found a new location for its US$27-billion LNG project in Canada, the Pacific NorthWest LNG, in response to environmental opposition to its first choice of location. The final investment decision on this project should be made by the end of the first quarter.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Ali on January 25 2017 said:
    Why would ARAMCO ship oil and natural gas 7,000 miles to Malaysia for refining? Saudi Arabia and Qatar need refineries, jobs, and value added exports.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play