The construction of a planned US$5-billion oil refinery in northern Mozambique has been put on hold after a major investor pulled out, state media reported on Friday.

The credit crunch caused by the global financial crisis has forced South Africa-based construction firm Group Five International to withdraw from the Nampula refinery and put its shares in the project up for sale, Noticias newspaper said.

Plans for the 300 000 barrel-a-day refinery were hatched in 2007 with the signing of an agreement between the Mozambican government and Texas-based firm Ayr Logistics, Group Five's partner on the project.

The refinery was originally projected to create 450 permanent jobs, plus a similar number of temporary jobs during the construction phase.

Mozambique was to receive a third of the oil refined, with the remainder designated for export.

In March, Mozambican firm Oilmoz announced that it has received funds to conduct a feasibility study for an oil refinery to be built in partnership with Shell Global Solutions, a unit of Royal Dutch Shell, south of Maputo.

Mozambique's only oil refinery closed 24 years ago, leaving it dependent on fuel imports.

AFP