Anglo-Dutch oil giant Royal Dutch/Shell confirmed it is
considering joining China National Offshore Oil Corp (CNOOC) to
build a US$2 billion refinery in South China's Guangdong
Province.
If Shell decides to go ahead, it will be the first foreign
investment in the refinery sector in China in recent years.
"We are pleased to be invited to participate in the proposed
refinery and are currently evaluating this opportunity," said Shell
China's spokeswoman Li Lusha.
The evaluation is in the premature stages and no judgment has
been made yet, she said.
The oil producer CNOOC plans to build its first refinery in
Huizhou in Guangdong. The refinery, which is still awaiting
government approval, will be able to produce 12 million tons of oil
products a year.
Part of the products will feed the nearby world-class
petrochemical joint venture between CNOOC and Shell in Huizhou.
The petrochemical complex is the largest Sino-foreign investment
in China. CNOOC holds a 45 per cent share in the petrochemical
project, while Shell has a 50 per cent stake. An investment company
of local Guangdong government gets the remainder.
A CNOOC official said to solicit Shell to join in the refinery
project is part of the CNOOC's refinery proposal.
"We are waiting for Shell's reply," said the official.
Scott Weaver, an analyst with ING, said a lot of oil majors are
looking at the opportunities in the refinery sector in China as the
industry is picking up after years of struggling.
"There will be opportunities, especially in the coastal areas
where the demand is booming," said Weaver.
(China Daily January 3, 2004)