Abu Dhabi investment co. will sell half its stake in South Korean refiner.
Abu Dhabi's IPIC plans to sell half of its 70 % stake in South Korea's fourth-largest oil refiner Hyundai Oilbank this summer, an IPIC executive said on Sunday.
"We plan to sell 35 %, which is half our stake," IPIC Managing Director Mohamed Nasser Al Khaily said at a press conference.
International Petroleum Investment Co. (IPIC), which invests in oil related projects for the Abu Dhabi government, will sell the stake in a tender, he said.
IPIC wanted to take some profits on the investment, he added. It has been a shareholder in Hyundai Oilbank since 1999 and in February 2006 raised its stake to 70 % from 50 %. South Korea's Hyundai Group owns the rest.
A new refinery that IPIC plans to build in Fujairah in the United Arab Emirates would cost at least $8 billion, Khaily said.
The fund needed to find a new design for the project as the initial plan for a 500,000 barrels per day refinery was unprofitable, Khaily said.
"We are redesigning the capacity in order to give us better returns," he said.
U.S. oil company ConocoPhillips, which last year signed a deal to partner IPIC on the refinery, said last month that the project might be delayed and that it may pull out due to rising costs.
IPIC said later it would go ahead with the project despite Conoco's reservations. The fund was still exclusively talking to Conoco as a partner, although it was possible that other companies would get involved, Khaily said on Sunday. He declined to name other potential partners.
An oil pipeline that IPIC plans to build to bypass the Strait of Hormuz could have capacity as high as 2 million barrels per day and would be finished by 2009, Khaily said.
IPIC executives had previously said the line would have capacity of 1.5 million bpd and would be completed in 2010.
The 320 km pipeline will allow the United Arab Emirates to pump more than half of its crude exports to the port of Fujairah, outside the Strait, direct from Abu Dhabi National Oil Company's Habshan fields.
IPIC and Pakistan's Pan-Arab Refinery (PARCO) were finalising studies for a new 260,000 bpd refinery in Pakistan, he said.
The fund wanted more security and concessions from Pakistan's government as a foreign investor, but was optimistic the plant would be built, he said.
IPIC's investment portfolio was worth around $10 billion, Khaily said, up from more than $7 billion last July.
Khaily spoke at a joint press conference with Austrian oil and gas group OMV in Abu Dhabi. IPIC owns a 17.5 % stake in OMV.