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)
