• 4 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 6 minutes UAE says four vessels subjected to 'sabotage' near Fujairah port
  • 9 minutes Why is Strait of Hormuz the World's Most Important Oil Artery
  • 13 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 12 hours California's Oil Industry Collapses Despite Shale Boom
  • 16 hours Knock-Knock: Aircraft Carrier Seen As Barometer Of Tensions With Iran
  • 21 hours The Consequences: Full-Blown Trade War Will Push World Towards Recession
  • 4 hours Balancing Act---Sanctions, Venezuela, Trade War and Demand
  • 19 mins Greenpeace Blocks BP HQ
  • 41 mins Trump bogged down in Mideast quagmire. US spent $Trillions, lost Thousands of lives, and lost goodwill. FOR WHAT? US interests ? WHAT INTEREST ? To get Jared (Frisch School 2.8 GPA) a Mideast win with peace deal ? China greatest threat next 50 years.
  • 21 hours IMO2020 To scrub or not to scrub
  • 16 hours UK Needs New Wind Turbines
  • 15 hours Will Canada drop Liberals, vote in Conservatives?
  • 7 hours Shale to be profitable in 2019!!!
  • 22 hours Did Saudi Arabia pull a "Jussie Smollett" and fake an attack on themselves to justify indiscriminate bombing on Yemen city population ?
  • 7 hours DUG Rockies: Plenty Of Promise, Despite The Politics
  • 22 hours 6 Ways to Fight Climate Change
  • 1 day Global Warming Making The Rich Richer
  • 1 day California Threatens Ban on ICE Cars
Iran’s Trick To Sell Oil For A 30% Premium

Iran’s Trick To Sell Oil For A 30% Premium

Iran’s strategy to avoid U.S.…

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