Sinopec not interested in acquiring Shell’s Singapore assets

ASIA’S top refiner, Sinopec, is not interested in acquiring Shell’s refinery or petrochemical plant in Singapore, although it is keen on participating in a shale gas project in Saudi Arabia, the Chinese company’s president said on Monday (Aug 28).

Sinopec president Yu Baocai was speaking at a briefing in Hong Kong after the state-run oil and gas giant reported a 20 per cent decline in interim earnings.

His comment came after sources last week told Reuters that Shell had hired Goldman Sachs to advise on a potential sale of its Singapore assets, and that Sinopec was among the companies reviewing them.

However, Yu said that Sinopec is interested in participating in Saudi Arabia’s Jafurah shale gas project.

This is in line with an earlier Reuters report, which said that Sinopec and TotalEnergies were in separate discussions with state-run Saudi Aramco to invest in the Jafurah project. This is the largest shale gas development outside the United States, with reserves estimated at 200 trillion cubic feet of raw gas.

Yu also said that Sinopec was one of the international companies invited by the Sri Lankan government to build a refinery there, and that it was evaluating the matter. The island nation shortlisted Sinopec and commodities trader Vitol to become potential investors in a proposed export-oriented refinery in Hambantota.

Separately, Sinopec is set to start operating a retail fuel business in Sri Lanka next month.

Yu also said that Russian oil makes up a small fraction of Sinopec’s international crude purchases, and that it will make “dynamic adjustments” in the future, buying based on the global market situation.

Chinese refiners have benefited from cheap crude oil supplies from Iran, Venezuela and Russia, as Western sanctions have forced those producers to sell oil at deep discounts to keep revenue flowing.

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