(Adds quotes, industry comment)
* Shell eyes downstream expansion in China
* Delays a coal-to-liquid project
BEIJING, April 14 Royal Dutch Shell Plc
RDSA.L has teamed up with Chinese state oil firms to jointly
bid for oil projects in Iraq, and is eyeing the expansion of
downstream businesses in China, company executives said on
"We indeed have discussions about bidding...and Chinese
companies for certain are part of the bidding partnerships,"
Chief Executive Jeroen van der Veer told reporters while in
Beijing. He did not give the names of the Chinese firms or the
makeup of any partnership.
By joining Shell, China would make its second major foray
into Iraq after state oil group CNPC's $3 billion project to
develop the al-Ahdab field, Iraq's first major oil deal with a
foreign firm since the fall of Saddam Hussein.
The Anglo-Dutch oil major has said it wants to expand its
presence in the vast fuel retail and refining businesses in
China, currently dominated by state-run Chinese giants that are
keen to boost oil reserves overseas.
"We are interested in refining participation in China,"
said Shell Group's Chief Financial Officer Peter Voser. "We
look at opportunities...and compare them against other
opportunities on a global base."
Asked if the oil giant will participate in a planned
expansion of CNOOC's first major refinery in southern China
that neighbours a joint petrochemical complex between the two
firms, Voser said they will study the "interesting
"It is natural to look at the two assets in
combination...we are business people at the end of the day,"
said Voser, who is going to replace van der Veer as company CEO
from July 1.
The $4.3 billion Nanhai Petrochemicals Project, equally
owned by Shell and a CNOOC unit, is able to churn out 800,000
tonnes of ethylene a year and 430,000 tonnes of propylene.
CNOOC, parent of CNOOC Ltd (0883.HK), started operating its
240,000 barrels-per-day Huizhou refinery last month and it has
decided to invest $6.5 billion to almost double its crude
capacity and add an ethylene unit.
Shell, the world's second-largest non-government controlled
oil company by market value, has been downsizing its refining
and retail assets in Europe and Africa as demand falls in the
But it has been eager to have a bigger presence in China,
the world's No.2 oil consumer, after setting up a small
joint-venture fuel marketing firm with top Chinese refiner
Sinopec Corp (0386.HK).
"There is no question that Shell, like other IOCs, wants a
share of China's refining and petrochemical business, which is
growing faster than the rest of the world," said a
Beijing-based executive with an international oil company.
Shell's potential investment targets include a proposed
refinery in a tie-up with PetroChina (0857.HK) and Qatar, after
the Shell and the Middle East exporter landed a huge liquefied
natural gas pact with Chinese firms.
Shell may also join hands with Kuwait Petroleum Corp to
build a refining and petrochemical complex with Sinopec Corp.
The project is waiting for approval from Beijing's
Lim Haw Kuang, executive chairman of Shell companies in
China, said the firm has postponed a coal-to-liquid project in
Ningxia, undergoing a feasibility study, due to economic
reasons amid the economic downturn. But he said coal
gasification continues to be a growth driver for the company.
(Reporting by Jim Bai and Eadie Chen; Writing by Chen Aizhu;)