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Aramco, Petronas seek $7b for joint venture

|By Arabian Post Staff|Malaysia’s state-owned oil corporation and Saudi Arabian Oil Co. are asking banks for proposals to finance about $7 billion for a planned refinery and a petrochemical complex in the Southeast Asian nation, Bloomberg reported.

The lenders would provide financing for the two projects worth a total of $12 billion to be constructed by Petroliam Nasional Bhd. and Saudi Aramco under a memorandum of understanding that the two firms have signed, the news agency said quoting unidentified people. The banks are expected to submit proposals by later this month, the people said.

While Petronas announced in January that it would cut its capital and operating expenditures by 50 billion ringgit ($12.2 billion) over four years, it also gave commitment to invest in long-term projects. The planned projects with Saudi Aramco are part of the $27 billion Refinery And Petrochemicals Integrated Development that it is building for future growth and will come onstream in 2019.

Petronas reported a 71 percent decline in net income of 2.7 billion ringgit in the first quarter from 9.3 billion ringgit a year earlier due to lower product prices and reduced sales volume, according to May 18 statement. Its total assets decreased to 567.6 billion ringgit as at end March compared to RM591.9 billion as at Dec. 31. The company raised $5 billion by selling dollar bonds and Islamic debt in March last year. (With Bloomberg)