Page 11 - AsianOil Week 34

AsianOil
EAST ASIA AsianOil
e Saudi rm is aiming to raise global re n- ing capacity to 8-10mn bpd by 2030, with expan- sion focused on major Asian consumers of the kingdom’s crude. Downstream investment pro- jects in China, India, Indonesia, Malaysia and Pakistan are at various stages of execution, while Aramco’s US subsidiary Motiva Enterprises last week signed a deal to acquire the Flint Hills Resources Chemical Plant nearby its Port Arthur Re nery in the US state of Louisiana and the rm is in talks to acquire 20% of India’s Reliance Industries Ltd’s (RIL) oil-to-chemicals business for around $15bn.
Most of Aramco’s current 4.9mn bpd capac- ity is produced through JVs, with around 2-3mn bpd of the total envisaged being converted to petrochemicals, to add to the 17mn tpy of pet- rochemicals already produced. Gross and net re ning capacity stood at 4.9mn bpd and 3.1mn bpd respectively at the end of 2018. e two g- ures were anticipated to increase to 5.6mn bpd and 3.7mn bpd by the end of this year.
Aramco’s owned and affiliated refineries absorbed 38% of the company’s crude last year, providing a signi cant hedge against the oil mar- ket uctuations of the past few years.
Crude supply agreements have been a central feature of the company’s international invest- ment projects, and the prospectus noted that Saudi oil had accounted for 68% of the feedstock absorbed by its international re neries.™
OCEANIA
ATO demands $509mn from Shell
FINANCE & INVESTMENT
THE Australian Taxation Office (ATO) has demanded that Royal Dutch Shell pay a A$755mn ($509.3mn) bill for unpaid taxes on its stake in the Browse natural gas project o shore Western Australia.
Local unit Shell Energy Holdings Australia has been ghting against paying tax on its stake in the project for six years, e Guardian reported on August 24, citing federal court documents.
Shell wants the ATO to allow it to deduct A$2.2bn ($1.48bn) from its tax bill in relation to costs arising from the acquisition of natural gas assets for the project.
Shell agreed in 2012 to pay Chevron A$450mn ($303.6mn) for 16.7% of the East Browse titles and 20% of the West Browse titles. Shell also agreed to give Chevron its 33% stake in two o shore gas elds in the Carnarvon Basin.
e ATO has rejected this request, however, arguing that the law requires an asset to be in active development before deductions can be made. Browse, though on the drawing board for 15 years, is still to reach a nal investment decision (FID).
Shell claims that it has “used each asset by hav- ing it ‘held in reserve’ or otherwise held ready for use in its business” and has asked the court to set aside the ATO’s decision.
The Guardian quoted a company spokes- woman as saying simply that the company was “engaging” with the ATO to con rm the “correct tax outcome” of its 2012 acquisitions. “Shell com- plies with all its legal and taxation obligations and is committed to paying the right amount of tax under the letter and the spirit of the law in all countries in which we operate,” she added.
Despite the company’s long-standing tax bat- tle, Shell’s appetite for Australian assets appears undimmed, with the Anglo-Dutch super-major o ering A$617mn for Australian power retailer ERM Power.
ERM founder Trevor St Baker, who holds 27% of the company, has backed the o er, saying he would vote in favour of the deal “in the absence of a superior proposal”. e retailer’s board has unani- mously backed the deal.
Shell’s country head, Zoe Yujnovich, said the takeover “aligns with Shell’s global ambition to expand our integrated power business and builds on Shell Energy Australia’s existing gas marketing and trading capability.”
She added: “ERM will become our core power and energy solutions platform and this acquisition is a signi cant step forward in growing Shell’s inte- grated power business in Australia.”™
Week 34 28•August•2019 w w w . N E W S B A S E . c o m P11