Sumitomo to go ahead with Saudi C2 despite Khobar attack

01 June 2004 03:55  [Source: ICIS news]

SINGAPORE (CNI)—Japan’s Sumitomo Chemical will go ahead with its plans to develop an integrated refining and petrochemical complex in Saudi Arabia despite the latest terrorist outrage in the country over the weekend.

 

Sumitomo Managing Director Ichiro Miyawaki said on Monday: “The schedule and content of the feasibility study will not be affected, and it will proceed as initially planned.”

 

In mid-May, Sumitomo announced it had signed a Memorandum of Understanding with Saudi Aramco to build a S$4.3bn (Euro3.5bn) complex capable of producing 2.2m tonne/year of olefins.

 

That announcement was just one week after an earlier terrorist attack in Saudi Arabia which killed five expatriate contractors at Yanbu on the Red Sea coast.

 

Last weekend, a second attack saw a further 22 foreigners killed at Khobar on the Persian Gulf. The US State Department has urged all of its citizens to leave the country.

 

A spokesman for Sumitomo said the company did not have any employees in Saudi Arabia at present and the feasibility study would not be completed until the end of 2005.

 

Another Japanese company, Sojitz Corp, said it planned to repatriate two of its employees from Khobar along with their four family members.

           

While few Japanese and Korean petrochemical companies have staff or operations in Saudi Arabia, they are heavily reliant on imports of feedstock from the country. For this reason many companies are bracing themselves for higher prices and reduced profits as the price of oil continues to rise.

 

Stephen Han, a spokesman for Korea’s Hanwha Chemical, said, “We are concerned about the impact this incident will have on the oil price and the extra cost that will add to our business.”

 

US oil prices surged more than 2% this morning to push above the $40/bbl mark after the weekend attack.

 

Oil prices have risen more than 25% since the end of 2003 due to increased demand, especially from Asia, and concerns of increased instability in the Middle East.
By: Staff Reporter
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