Monday, June 9, 2008

Costs force Malaysia's Petronas to delay Sudan refinery

source: AfP via MSN Malaysia News
Malaysia's national oil firm Petronas said Monday it will delay development of a 150,000 barrels per day refinery in Sudan due to rising costs.
Petronas chief executive Hassan Merican said the refinery project at Port Sudan was being delayed because "we cannot justify the commercial viability of the project because of the high investment costs."
"The cost environment has gone up. We have deferred it for now," he said on the sidelines of the two-day Asia Oil and Gas Conference in Kuala Lumpur, without giving further details.
Petronas acquired a 50 percent stake in the refinery project in 2005 through its unit Petronas International Corp Ltd. The remaining stake is held by Sudan's Ministry of Energy and Mining.
Under the tie-up, Petronas and its partner were to jointly invest in, develop and operate the export-oriented refinery at Sudan's only entry port.
The refinery is designed to process high acid crude from Blocks 3 and 7 of the Sudan Melut Basin, where Petronas already has a 40 percent interest, and had been expected to be operational by 2009.
Petronas also holds a 35 percent stake in an offshore oil and gas project in an area known as Block 15 in the Red Sea Basin in Sudan.

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