BEIRUT (Zawya Dow Jones), May 25, 2009
Saudi Arabian Oil Co., known as Saudi Aramco, and France's Total are expected to delay the award of deals of their joint-venture refinery project in Jubail to beyond the planned date of mid-June, Abha-based Al Watan daily reports Monday.
Bids have exceeded the $10 billion "red line" that the two partners have set as the project's cost, the paper reports citing a person in the oil sector.
About a $1 billion increase in expenses is "palatable" but the two partners were surprised to find that offers have exceeded this figure, said the person who is close to one of the companies competing for the project.
The initial estimate of the project's cost was $13 billion during the inflationary period, the daily reports.
The fate of the Yanbu refinery project, an Aramco joint venture with ConocoPhillips, will depend on the fate of the Jubail refinery project, the person said, adding that the two companies have started to scrutinize the interests of potential bidders for the project.
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