Shell Could be Dropped from China Oil Refinery Project

Kuwait is considering dropping UK-based oil giant Royal Dutch Shell as a partner and is instead considering BP in a project to build a US$5 billion oil refinery in China, according to Kuwait's state news agency KUNA.

The refinery in Guangdong would be one of the largest joint venture investments in China, similar in size to the $5bn refinery to be built by ExxonMobil and Saudi Aramco in Fujian.

It is unclear whether BP is keen to take on the project but analysts point to Beijing's preference to team up state-owned firms that can offer supply guarantees with less need for technology.

State-owned Kuwait Petroleum (KPC) and China's largest refinery Sinopec received preliminary Chinese government approval for the Guangdong plant last year.