Saudi Aramco shelves jv with Petronas for RAPID project in Malaysia

Saudi Arabian Oil Co, or Saudi Aramco, has shelved plans to become a joint venture partner with Malaysian petrochemical/oil firm Petronas in its US$27-billion Refinery and Petrochemical Integrated Development (RAPID) project in Johor, Malaysia, according to news reports.It has also been reported that after a feasibility study, the world’s largest oil firm concluded that the Malaysian project wouldn't be able to generate sufficient revenues, hence its reason for pulling out.

Petronas was seeking a joint venture partner last year http://plasticsandrubberasia.com/oct2016/company6.html for RAPID that is planned to have a daily output rate of 300,000 barrels of crude oil and7.7 million tonnes/year of petrochemicals. The complex also includes a regasification terminal for LNG.Launched in 2012, RAPID is expected to begin operations in the first quarter of 2019.

Both the oil companies have been hit by the declining oil prices. As part of an economic transformation to contend with the prolonged drop in oil prices, Saudi Arabia is expected to partially list Aramco in 2018, estimated to be worth up to US$3 trillion, in what could be the world’s largest-ever initial public offering (IPO).

Meanwhile, Petronas has been looking out for new revenue streams after having to axe 1,000 jobs of its total workforce of 53,000 and cutting capital expenditure by up to US$12 billion over the period from 2016 to 2020.