SON to Purchase Minority Interest in Al Fujairah's 500,000 BPD Refinery

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SLATKIN OIL NV ("SON") agreed to purchase a minority interest in the UAE IPIC's owned Al Fujairah refinery. SON secured the annual feed stock production of 170,000,000 barrels of crude from Saudi Arabia. Additional crude feed stock is to be provided to the refinery by IPIC, major shareholder from Abu Dhabi's Upper Zakum Field through 350 Km main online (MOL) pipeline that is funded by IPIC.

SLATKIN OIL NV ("SON") agreed to purchase a minority interest in the UAE IPIC's owned Al Fujairah refinery. SON secured the annual feed stock production of 170,000,000 barrels of crude from Saudi Arabia. Additional crude feed stock is to be provided to the refinery by IPIC, major shareholder from Abu Dhabi's Upper Zakum Field through 350 Km main online (MOL) pipeline that is funded by IPIC.

Al Fujairah refinery, on the Gulf of Oman, is well situated and close to Al Fujairah Seaport located at the entrance of the Straits of Hormuz which connects the Persian Gulf with the Arabian Sea. The refinery's location is ideal for delivery of petrochemical finished products, specifically if any political conflicts in the region may damper the exports from within the gulf.

There is a big gap in the demand (USA-China-India-Brazil) and supply position of the energy products and the UAE Government has provided various incentives to develop this sector and invite for the first time foreign investors. Lot of exploration through concession agreements is going on throughout the countries in the Middle East. It is also felt necessary to develop the down-stream refining industry to release pressure on foreign exchange i.e. - USD.

The increase in refinery will require imports from KSA of crude oil. As the road transportation rate for both crude and white products is the same, therefore, it is advantageous to transport finished products through the new pipeline resources. The above consideration led SON to select Al Fujairah/Zakum as the site for the establishment of the refining facility. The planned Al Fujairah Refinery is to be built so to meet rising global demand and tighter specification for products such as gasoline, diesel and jet fuel notably in Europe and in the US.

SON intends to work closely with the UAE government and expend its investment for the development of additional production facilities in the region.

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