On Friday, Saudi Aramco confirmed the successful acquisition of a 10% stake in a Chinese petrochemical firm for $3.4 billion, further extending its downstream presence in a crucial export market.
Aramco has successfully completed the acquisition of a 10% stake in Rongsheng Petrochemical Co Ltd, following the signing of definitive strategic agreements in March of this year.
According to Aramco Downstream President Mohammed Al Qahtani, the strategic partnership with Rongsheng not only furthers Aramco’s liquids to chemicals strategy but also strengthens their foothold in China, underscoring their importance as a reliable crude oil supplier.
According to Al Qahtani, the acquisition of a 10% stake in the Chinese petrochemical business is an integral component of Saudi Aramco’s long-term growth strategy to expand its presence in the crucial Chinese market.
Saudi Arabia, the world’s largest crude oil exporter, is making significant investments in the expanding Chinese crude market. Saudi Aramco is strategically bolstering its downstream presence and reinforcing its market share in crude supply, catering to China, the world’s leading importer of crude oil.
Earlier this year, Saudi Aramco disclosed two significant refinery and petrochemical agreements in China.
These deals not only grant the world’s largest oil company a stake in the Chinese downstream market but also open up an additional export outlet for 690,000 barrels per day (bpd) of Saudi crude to China.
In a partnership venture, Saudi Aramco intends to construct a $10-billion refining and petrochemical complex in China within the next three years.
Additionally, Aramco has successfully concluded the acquisition of a 10% stake in Rongsheng Petrochemical and will supply 480,000 bpd of Arabian crude oil to Zhejiang Petroleum and Chemical Co. Ltd (ZPC), an affiliate of Rongsheng, as part of a long-term sales agreement.
With the two deals in place, Aramco secures a long-term export channel for 690,000 bpd of Saudi crude to China, solidifying Saudi Arabia’s market share and ensuring locked-in contracts for the foreseeable future, extending to the coming years and decades.
Source : oilprice.com
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