Saudi Arabia’s Supreme Petroleum Council, which sets the country’s oil and gas policy, is in talks with Saudi Aramco over the state-owned oil major taking a role in the development of the Jizan oil refinery.

Progress on the 250,000-400,000-barrel-a-day (b/d) refinery is being closely watched by international oil companies (IOCs) as it was to be the first local refinery in decades to be wholly owned and operated by the private sector.

However, one oil executive close to the project says Aramco is in informal talks over taking a role in the refinery.

“The ministry has made much of the fact it can carry out this project on a private basis,” says the executive.

“But there is a recognition from the council that other parties may need to become involved. That is what the talks with Aramco are exploring.”

The Petroleum & Mineral Resources Ministry submitted its development plans for the refinery to the Supreme Petroleum Council at the end of March. The council is expected to approve the plan in the next month.

Aabed al-Saadoun, an adviser to the Oil Ministry, says he expects it to release a request for proposals to IOCs by the end of May. “Once that is out, the interested IOCs will know their position better because they will have all the information to make an investment decision,” he says.

Any involvement by Aramco is expected to be welcomed by IOCs.

To date, three IOCs - Malaysia’s Petronas, India’s Reliance Industries and Taiwan’s Formosa Petrochemical Corporation - have indicated an interest in the scheme.

More bidders are expected once the Supreme Petroleum Council has given its approval.

It is a difficult project because of its remote coastal location in the southwest and the potential for escalating costs. Aramco was unavailable for comment.