Saudi Aramco and ConocoPhillips Announce Signing of Memorandum of Understanding for Yanbu Export Refinery Project
DHAHRAN, SAUDI ARABIA, May 24, 2006 --- The Saudi Arabian Oil Company (Saudi Aramco) and ConocoPhillips today signed a comprehensive Memorandum of Understanding (MOU) to conduct a detailed evaluation for the proposed development of a 400,000 barrel-per-day, full-conversion refinery in Yanbu, Saudi Arabia.
The refinery would be designed to process Arabian heavy crude and produce high-quality, ultra-low sulfur refined products that meet current and future U.S. and European product specifications. The project is targeted to start up in 2011.
The MOU sets forth the agreement between Saudi Aramco and ConocoPhillips regarding the key parameters of the project, the project configuration, and a broad range of the major technical, commercial, legal and financial terms.
The proposed project represents an opportunity for the world’s largest producer of hydrocarbons and ConocoPhillips to work together to construct a state-of-the-art, full-conversion, heavy crude refinery to serve multiple markets with high-quality, refined products in an environmentally sound manner. For Saudi Arabia, this project would not only add value to the Kingdom’s petroleum product exports, it would also be a platform for increased industrial development in the Kingdom. In addition to attracting foreign investment to The Kingdom of Saudi Arabia, the project is expected to expand its economy and provide increased job opportunities for Saudi nationals.
“For over 70 years, Saudi Aramco has been committed to providing the world with reliable energy to fuel its prosperity,” said Abdallah S. Jum’ah, Saudi Aramco president and chief executive officer. “This proposed venture with our industry colleagues at ConocoPhillips is a proud moment for us all, and will allow us to expand our role to downstream exports in addition to the upstream.”
“ConocoPhillips welcomes this opportunity to work with the Saudi Arabian Oil Company to add needed capacity to the international refining system,” said Jim Mulva, chairman and chief executive officer of ConocoPhillips. “The Yanbu project fits well with the company’s overall strategy to invest in projects that expand our global refining presence, and would provide significant new supplies of refined products to help meet growing requirements around the world.”
Longer-term, the MOU contemplates Saudi Aramco and ConocoPhillips forming a joint venture company with equal ownership interests to own and operate the proposed new refinery. Subject to required regulatory approvals, the parties may offer up to 30 percent interest in the project to the Saudi public. Saudi Aramco would supply the project with 400,000 barrels per day of Arabian heavy crude oil. Saudi Aramco and ConocoPhillips would each be responsible for marketing one half of the refinery’s production.
ConocoPhillips is an integrated petroleum company with interests around the world. For more information, go to www.conocophillips.com.
Additional information about Saudi Aramco can be found on the following Web site: www.saudiaramco.com.
CONTACTS:
ConocoPhillips
Phil Blackburn (media) 281-293-1809, Gary Russell (investors) 212-207-1996
Saudi Aramco
Jamal Kheiry 966-3-874-5350
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that contain projections about revenues, income, earnings and other financial items, plans and objectives for the future, future economic performance, or other projections or estimates about assumptions relating to these types of statements. These statements usually relate to future events and anticipated revenues, earnings, business strategies, competitive position or other aspects of operations or operating results. In many cases you can identify forward-looking statements by terminology such as "anticipate," "estimate," "believe," "continue," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," "objective," "projection," "forecast," "goal," "guidance," "outlook," "effort," "target" and other similar words. However, the absence of these words does not mean that the statements are not forward-looking. The forward-looking statements are based on the expectations, estimates and projections of Saudi Aramco and ConocoPhillips about their respective businesses and the petroleum industry in general on the date this statement was released. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Economic, business, competitive and regulatory factors that may affect ConocoPhillips' business are generally as set forth in their filings with the Securities and Exchange Commission (SEC). ConocoPhillips is not under any obligation (and expressly disclaim any such obligation) to update or alter these forward-looking statements whether as a result of new information, future events or otherwise.