Shell considers CNOOC offer

Royal Dutch/Shell has announced that it will be looking into a plan mooted by China National Offshore Oil Corp (CNOOC) to jointly build a US$2 billion refinery in the Guangdong Province.

"We are pleased to be invited to participate in the proposed refinery and are currently evaluating this opportunity," confirmed Shell China spokeswoman, Li Lusha, who added that "the evaluation is in the premature stages and no judgment has been made yet."

A CNOOC spokesperson said that the joint-venture proposal to join in the refinery project had been part of CNOOC's plans ever since the refinery was planned. Now, said the official, the ball was in Shell's court.

The plant, to be located in Huizhou, will be capable of producing 12 million tons of petroleum products per year and CNOOC confirmed that "part of the products will feed the nearby world-class petrochemical joint venture between CNOOC and Shell" in the same town.

If Shell goes ahead with the deal, it will be the first foreign investment in the domestic refinery sector for some time and will be the largest Sino-foreign owned petrochemical complex in the country.

Should the deal come to fruition, CNOOC will hold a 45% share, Shell China will hold 50% and the balance will be held by an investment company operated by the Guangdong government.