Saudi Aramco to Invest $7 Billion in Malaysian Oil Refining HubBy
Agreement between Aramco, Petronas to be signed on Tuesday
Petronas building $27 billion oil complex in southern Malaysia
The deal will be signed Tuesday, Prime Minister Najib Razak told reporters Monday in Putrajaya. The two national oil companies have finalized plans to develop and operate a crude oil refinery as part of the larger integrated oil and petrochemicals complex at Pengerang in the southern state of Johor, Najib said, without providing further details. The agreement coincides with a visit to Malaysia by Saudi Arabia’s King Salman bin Abdulaziz.
“The value of this investment is one of enormous significance,” Najib said.
A deal with the world’s biggest oil exporter may be a boost for the $27 billion development known as Refinery and Petrochemicals Integrated Development, or RAPID. The project, which will border the traditional Asian oil trading and refining center of Singapore, was announced in 2011 and originally scheduled to come online last year.
For Saudi Aramco, as the company is known, it furthers its long-standing strategy of investing in refining to help lock in demand for its crude, as it’s done in markets including U.S., Japan and South Korea. The company, which is preparing for what may be one of the world’s largest initial public offerings, has been battling for global market share against challenges posed by U.S. shale oil producers, Russia and even fellow members of the Organization of Petroleum Exporting Countries.