"We stand ready to deliver the oil China requires ... we are building strong, long-term relationships with leading Chinese petroleum companies," said Saudi Aramco Chief Executive and President Abdallah Jumah. "We are committed to this market."

The two companies signed a $3.5 billion agreement with ExxonMobil last week to expand a refinery in south China, said Jumah.

ExxonMobil and a Sinopec subsidiary launched the largest oil refining and ethylene integrated joint venture in Quanzhou in China's eastern Fujian province. The petrochemical complex will produce 12 million tons of refined oil and 800,000 tons of ethylene annually by 2008 while adding new facilities to increase existing capacity.

Fujian Refining & Chemical Co. subsidiary Sinopec holds 50 percent; ExxonMobil and Saudi Aramco owned 25 percent each. Saudi Aramco will supply the oil. Negotiations on the Fujian project began in 1995.

"We are also working together (with Sinopec) to explore the feasibility of developing a new grassroots refinery in Qingdao, in Shandong province," said Jumah while in Beijing.

While Saudi Aramco expects to hold a minority stake in the refinery, Chinese companies expects to own a stake of 20 percent to 40 percent. Majority stakes in the project will be held by Sinopec and local companies from the Shandong provincial government.

Saudi Arabia is the largest supplier of crude to China, where the refinery industry is projected to expand by nearly 30 percent within the next five years.

Saudi Arabia has been investing in China's refineries to help guarantee a market in the country by building capacity to process its heavier crude as well as opportunities to sign long-term supply agreements.

Foreign imports met more than 40 percent of China's oil needs in 2004. Saudi Arabia has proven oil reserves of approximately 260 billion barrels.

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Five jailed in protest against Shell

Five men were in jail Tuesday for failing to obey an injunction not to obstruct a Shell gas pipeline passing through their land in the West of Ireland.

Micheal O. Seighin, Vincent McGrath, Philip McGrath, Willie Corduff and Brendan Philbin are being held in Cloverhill prison for refusing to obey the injunction while arguing Shell's injunction should be quashed.

Judge Joseph Finnegan of the High Court said he will accept an affidavit from their attorney, who has argued his clients did not grant Shell full consent to construct the pipeline, and therefore his clients cannot be jailed for obstructing the pipeline.

Shell said the five men and other protesters are misguided over the safety of the pipeline. "We don't want people in prison - in fact, it's the last thing we want," Andy Pyle, the chairman of Shell Ireland, told Britain's Times Online. "We recognize that there are some landowners with concerns, but these have been built up by misinformation and emotive language. It is absolute rubbish to suggest safety is not our primary priority, but, in hindsight, we should have done more to counter their concerns."

In June, Shell commissioned a report on the pipeline's safety and found that the risks to the public "would be tolerable when compared with international criteria." Times Online said the initial report was based on incomplete information. Protesters questioned the objectivity of the report.

Shell subsidiary in Ireland is looking to pump gas from the Corrib gas field to an onshore refinery at Bellanaboy in the county of Mayo. The project is worth almost $1.2 billion.

Shell said it plans to continue production despite protests earlier this month outside its construction depot in Rossport.

The five men await trial and have expressed their determination to continue their protest against the Shell pipeline passing through their land.

-0-

Convicted drug dealer to seek Liberian oil block

Convicted drug felon and former chairman of Regal Oil Vasile Frank Timis seeks to sign a deal with National Oil Company of Liberia, NOCAL, over an offshore block in Liberia.

Timis, in his early 40s, was forced to resign from Regal Oil after the company hit a dry well in the Aegean Sea and resulted in plummeting stock prices. Despite heroin convictions in Australia, Romanian-born Timis raised significant capital for Regal Oil on the AIM index in London before the dry well incident.

Although NOCAL recently signed production sharing agreements with several oil companies such as Regal Oil, Broadway Hydrocarbons, and Oranto, it is not clear in which capacity Timis seeks to sign the offshore deal with NOCAL since he had already resigned.

The deal signing with Timis coupled with accusations of rampant corruption in the National Transitional Government of Liberia could adversely influence Liberia's oil program, hampering foreign investment.

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More than 20 arrested on piracy charges

Malaysian law enforcement earlier this month detained 21 maritime pirates and their vessel used to hijack two oil tankers.

Malaysian Southern Region Marine Police Commander Abdul Aziz Yusof said a special police team discovered the pirates after receiving a report on the disappearance of tankers named Samudera Sindo 8 and Bash Aranda 7.

"Following the report, we also received information from our Indonesian counterpart that oil being transferred from Samudera Sindo 8 and Bash Aranda 7 to another oil tanker Palm Cheam Chemical," said Yusof.

All the detained crew members are Indonesian nationals.

--

Closing oil prices, July 12, 3 p.m. London

Brent crude oil: $58.32

West Texas intermediate crude oil: $59.76

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