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ConocoPhillips signed a $6-billion agreement with Saudi Arabian Oil Co. to build a 400,000 barrel-per-day oil refinery in the Saudi kingdom's Red Sea city of Yanbu.

Under the deal, the Saudi company also known as Aramco and Houston-based ConocoPhillips may offer up to a 30 percent interest in an initial public offering to Saudi nationals, according to an Associated Press report.

The project, forecast to come online in 2011, follows a similar deal signed Sunday between Aramco and French oil company Total SA for a 400,000 barrel-per-day refinery in the eastern Saudi city of Jubail on the Persian Gulf.

Aramco and ConocoPhillips agreed to form a joint-venture company, with each side holding about a 35 percent stake, according to the memorandum of understanding signed by the two companies. The two will each be responsible for marketing half of the refinery's production.

This week's deals between Aramco and the two western oil majors come amid a severe global shortage of refining capacity to process crude oil into gasoline, diesel and other products.

Tight refining capacity worldwide has been one of the key reasons for the jump in global crude oil prices, which have doubled from $35 a barrel two years ago to around $70 at present.

Many of the plans that have been announced the past year to build new refineries or expand existing ones follow years of reduced investment because of concerns about whether new projects -- which take years to build -- would be profitable when they begin service.

Many of the proposed projects will not begin production for another three to five years, according to the AP report.

The Aramco projects are part of a big investment program to refine more Saudi crude oil at home and at refineries built jointly by the company in other countries.

Aramco plans to spend $50 billion over the next five years to boost refining capacity in Saudi Arabia and other parts of the world and boost the kingdom's refining capacity by as much as 60 percent over this period.

Aramco is planning to build new refineries or expand existing ones in China, Indonesia, South Korea and the United States.

Bestway muscles in on stores merger

In London, the Daily Telegraph reports that cash-and-carry group Bestway hopes to gatecrash the planned merger between Nisa-Today's and convenience store group Costcutter, by making a counter bid for Nisa-Today's.

Bestway has submitted a written proposal outlining its interest in acquiring Nisa-Today's.

A source close to the situation said, "We submitted a letter last week to Dudley Ramsden [Nisa-Today's chairman] saying we would be interested in acquiring Nisa-Today's if it was up for sale."

Acquisitive Bestway was founded by Pakistani entrepreneur Sir Anwar Pervez in the 1960s. Sir Anwar has built Bestway into a company that last year generated £1.6bn in turnover.

Earlier this month The Daily Telegraph revealed that wholesaler Nisa-Today's was planning to merge with convenience store group Costcutter in a deal that would value the new group at £200m.

However, the deal has angered some of the Nisa-Today's shareholders -- store managers and owners -- who want to remain as a mutual organization.

The rebel shareholders are being represented by influential solicitor David Greene, who said that any offer by Bestway ought to be presented to all the shareholders.

"Nisa-Today's needs to be more transparent. It's not for the management to dismiss out of hand any bids that are being made. Any bid is in effect in competition to the management's bid."

The management of Nisa-Today's plans to roll over its long-term incentive plans in the wholesaler to take a 21.5pc stake in the merged company.

Imperial Oil warns retailers about possible energy shortages

Canada's Imperial Oil was left scrambling to secure alternate gasoline supplies due to a lengthy refinery shutdown, with the energy giant warning its retailers of possible shortages.

But after a warning letter to its Esso stations was sent out last week, Imperial was able to find another source of gasoline, even in the midst of a tight supply situation in western Canada, said a company spokesman.

The news, reported in the Calgary Sun, comes as predictions of dramatically higher gasoline prices came due to concerns of the impact a looming hurricane season could have on Gulf of Mexico oil production.

One forecast by CIBC World Markets sees gasoline hitting the $1.30 a litre mark this summer.

Imperial Oil's Hart Searle said a two-week delay in returning its Edmonton Strathcona Refinery to full capacity shouldn’t crimp supply at the its pumps.

“We are not anticipating supply disruptions for our customers,” said Searle.

He said there are no guarantees on prices changes, adding that’s dependent on a number of market factors that could be impacted by higher gasoline demand as summer nears.

"We have to price our product competitively and we do," said Searle.