Saras SpA has several ideas about investments to upgrade its Sarroch refinery in Sardinia but it is not looking at a capacity expansion, said managing director Dario Scaffardi, adding he does not expect any major cost overrun.

"We are not looking at capacity expansion, it's unlikely at the moment. What we are looking at is having further conversion," Scaffardi said in a conference call after the release of its third-quarter results Wednesday morning.

"Other possible options include a new power plant and co-generation unit. There are a variety of ideas at the moment," he said, adding that no definitive decision has yet been taken.

Scaffardi said the "very good returns" from brownfield investment has made Saras more careful to possible upgrade projects at the refinery and that its location in Sardinia makes investments there safe from major cost overruns.

"We don't see any major cost overruns. We're largely shielded due to the fact we operate in Sardinia, and local engineering firms haven't really changed in a significant way their pricing policy towards us," he said.

Scaffardi said Saras is still looking to acquisition opportunities in the refining, marketing, and oil logistics sectors and confirmed the company will adopt a disciplined approach to any operation.

On its gas exploration activities, he said offshore tests will start in the coming months.

Copyright 2007 AFX News Limited. All Rights Reserved.

Related Project
Sarroch Refinery
Facility Type: Refinery Owner: Saras S.p.A.
Scope: Expansion Location: Cagliari Italy