Sudan in talks with Malaysia to build oil refinery

January 13, 2009 (KHARTOUM) — Sudanese government officials are scheduled to hold a meeting with their Malaysian counterparts to discuss plans for an oil refinery project.

“We are meeting with our joint venture partner to see how we can move forward with this project” Sudanese energy Minister Al-Zubeir Ahmed Al-Hassan told Reuters on the sidelines of the Petrotech conference in New Delhi.

The refinery project has been delayed by the Malaysian company Petronas due to $1-$2 billion spike in costs from when it was originally planned.

A source in Petronas told Reuters that their position on the feasibility of the refinery project remains “unchanged”.

It is not clear under what terms the March meeting will take place given Petronas’ view.

Petronas signed a deal in August 2005 to invest in the refinery, which would process some of the hard-to-sell, high acidic Dar Blend crude produced in Sudan.

Equipment and labor shortages have pushed costs up globally in the energy sector, leading to several refining projects being delayed or cancelled.

Oil exports represent 65% of revenue for Sudan and helped fuel its unprecedented economic growth despite US economic sanctions.

However the sharp drop in crude prices will make it difficult for Sudan to attract new investments the oil sector.

(ST)