Oman Oil, IPIC Consider Development of $7 Billion Refinery and Petrochemical Complex at Al Duqm

---

Researched by Industrial Info Resources (Sugar Land, Texas)--State-owned Oman Oil Company SAOC (Muscat, Oman) and International Petroleum Investment Council (IPIC) (Abu Dhabi, United Arab Emirates) have signed a memorandum of understanding for the potential development of a refinery and petrochemical complex at Duqm Port, in the Al Wusta region of Oman.

The next stage in the project, according to a statement issued by both companies, entails a detailed assessment of the feasibility and viability of the proposed complex, including marketing studies, which will be undertaken by the two companies and external international consultants. No timetable for the estimated $7 billion complex has been established, but the companies intend to commission the relevant investigations in the near future.

Oman Oil was incorporated in 1996 to investigate investment opportunities in the energy sector within and outside Oman. Today, it has investments in the exploration, refining, petrochemical, shipping, energy and metals sectors. It has investments in exploration and production services in Oman and Kazakhstan, in particular the Mukhaizna complex in Oman, where it holds a 20% share of a consortium of international oil companies formed to develop the Mukhaizna oil field during the next 30 years. Currently, the project has an output of 20,000 barrels per day (BBL/d), but with the planned drilling of more than 2,000 production wells, the consortium is targeting an output of 150,000 BBL/d by 2012.

In the refining sector, Oman Oil holds shares in two refining companies: Oman Refineries & Petrochemicals Company LLC (ORPC) in Oman, in which the company holds a 25% stake, with the Ministry of Finance holding the 75% balance; and Magyar Olaj-es Gazipari Nyrt (BDP:MOL) (MOL) (Budapest, Hungary) in Hungary, in which Oman Oil has a 7% stake.

ORPC operates the Minah Al-Fahal (MAF) refinery, which started operations in 1992 and produces 106,000 BBL/d of light products. In 2006, ORPC commissioned the Sohar refinery to process the feedstock of long residue from the MAF refinery. This feedstock is blended with crude oil and fed from the MAF refinery to Sohar through a 226-kilometer pipeline, where it is used to produce 220,000 BBL/d of light products.

IPIC is the wholly owned Abu Dhabi state organization that is responsible for all foreign investments in the oil and petrochemical sectors. It is controlled by the Supreme Petroleum Council of Abu Dhabi and is a subsidiary of Abu Dhabi National Oil Company (ADNOC) (Abu Dhabi, United Arab Emirates), which has a daily production capacity of more than 2.7 million barrels of oil. IPIC has an estimated net worth of more than $14 billion.

The Sultanate of Oman sees the Duqm Port, Petrochemical and Refinery complex playing a major role in its plans to develop and diversify the economy to make Oman a viable investment center. Phase 1 of the overall development plan includes the $1.8 billion port and dry dock facilities, while phase 2 includes the fully integrated export center with a crude oil export terminal and the refinery and petrochemical complex. The area also will boast of an international airport, new hotels and tourist resorts, in addition to a free trade zone.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.