Hmm. I fail to see how if Saudi Arabia is really Anti-Chinese then how come we signed a nuclear and military technology transfer deals yesterday. Strange...but then so is the world of propaganda it goes too far it stops making sense.
Saudi Aramco to Invest $200 Billion in Refining, Exploration
January 17, 2012, 4:58 AM EST
By Wael Mahdi
(Updates with comments on gas in sixth paragraph.)
Jan. 17 (Bloomberg) --
Saudi Arabian Oil Co. plans to build refineries in China and Indonesia as part of a $200 billion spending program to double refining capacity and explore for oil and natural gas during the next decade.
Saudi Aramco, as the state-run company is known, is preparing for talks about final terms for a Chinese refinery and is still waiting for good terms to be put on the table for a processing plant in Indonesia, Chief Executive Officer Khalid al-Falih said in an interview. Aramco will probably decide soon about whether to invest in expanding a plant it operates jointly with Japans Sumitomo Chemical Co., he said on Jan. 14.
Aramco, the worlds largest crude exporter, is expanding refining and petrochemical production to meet domestic demand and export refined products that can fetch higher prices than oil. The company plans to boost its global refining capacity to 8 million barrels a day in 10 years, including projects yet to be announced, al-Falih said.
Its an aspiration for a longer-term growth objective, he said of the refining-capacity target in the interview at the companys headquarters in the eastern Saudi city of Dhahran.
Aramco also plans to invest in drilling for oil and gas inside the kingdom and in petrochemicals production and other downstream activities, he said.
Tight Gas
The company is exploring for unconventional gas, including shale and tight gas, in the nations northwestern region, al- Falih told reporters on Jan. 14. Low gas prices are a challenge to developing these hard-to-reach deposits, he said. Aramcos capital spending will probably rise to more than $20 billion a year if it develops unconventional gas, he said in the interview.
Aramco will invest $90 billion in the next five years to increase refining capacity by 50 percent to 6 million barrels a day in projects that more or less have been identified, al- Falih said.
Refining capacity in Saudi Arabia itself will rise to 3.46 million barrels a day in 2016 from 2.26 million barrels, according to a presentation Aramco officials made at a conference in Bahrain in October.
Saudi Arabias crude oil production rate in December was 9.76 million barrels a day, the Organization of Petroleum Exporting Countries said in a report yesterday,
using the average of several external estimates.
China Demand
Most of the capacity to be added above the five-year target will be at refineries in Asia, with the bulk of that in China, al-Falih said. Aramco seeks to tap increasing consumption in China, Asias biggest energy user, by forming joint ventures with local partners.
The CEO said he was confident about reaching final terms on a plant with China National Petroleum Corp., that nations largest energy producer, to be built in Chinas southern Yunnan province. The two companies have agreed on the scope of the project, including the refinery and marketing, he said.
Its always key for Saudi Aramco when we invest anywhere to consider both the refining side and the retail marketing network, he said.
In Indonesia, early indications are positive on Aramcos plan to develop a refinery with state-run PT Pertamina, al-Falih said. He declined to predict when Aramco would conclude discussions on either Asian project.
It took us nine years to finalize the terms with Sinopec, and its only less than a year since we started talks with PetroChina, he said. PetroChina Co. is China National Petroleums Hong Kong-listed unit. It will take some time, but Im sure ultimately we will have a very good project with a very good partner.
Japanese Partner
Aramco will meet this month with Sumitomo Chemical to discuss where to go from here on the planned expansion of their jointly owned PetroRabigh refinery in Saudi Arabia. The partners missed their year-end target for deciding whether to invest $6 billion to $8 billion to enlarge the facility.
When we said year-end, we meant more or less that date, al-Falih said.
Aramco and Sinopec signed an agreement on Jan. 14 to develop a refinery in the Saudi city of Yanbu at a cost of as much as $10 billion. The 400,000 barrel-a-day plant is likely to begin operating in 2014, al-Falih told reporters after the signing ceremony in Dhahran. Sinopec, Aramcos largest Chinese customer, agreed in March 2011 to take a 37.5 percent stake in the Red Sea refinery, known by its acronym Yasref.
The signing coincided with a visit by Chinese Premier Wen Jiabao to the Saudi capital Riyadh.
--Editors: Bruce Stanley, Stephen Voss, John Buckley
To contact the reporter on this story: Wael Mahdi in Dhahran, Saudi Arabia at wmahdi@bloomberg.net
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net
Saudi Aramco to Invest $200 Billion in Refining, Exploration - Businessweek