Editor’s Comment: Saudi Aramco acquires 70% of stake in SABIC

The integration of operations of Aramco and SABIC will definitely act as a catalyst for realisation of Saudi Vision 2030

Martin Menachery is the editor of Refining & Petrochemicals Middle East.
Martin Menachery is the editor of Refining & Petrochemicals Middle East.

We waited for this day for a long time – Saudi Aramco has acquired a 70% stake in SABIC for $69.1bn. The acquisition will accelerate Aramco’s ambition to increase its refining capacity from the current 4.9 million barrels per day (bpd) to 8-10 million bpd by 2030, of which 2-3 million bpd will be converted into petrochemical products. Amin Nasser, president & CEO, Saudi Aramco, commented: “This transaction is a major step in accelerating Saudi Aramco’s transformative downstream growth strategy of integrated refining and petrochemicals.

Aramco signed a share purchase agreement to acquire the majority stake in SABIC from the Public Investment Fund (PIF) of Saudi Arabia, in a private transaction of SAR123.39 per share. According to Nasser, Aramco and SABIC together will create a stronger, more robust business to enhance competitiveness and help meet rising demand for energy and chemical products needed by their customers around the world.

The merger of the world’s largest oil company and the world’s largest petrochemical company is a game-changing decision for the downstream industry in the Middle East. As stated by Yasir Othman Al-Rumayyan, managing director, PIF, this is a win-win-win transaction and a transformational deal for three of Saudi Arabia’s most important economic entities – Aramco, SABIC and PIF.

As stated by Yousef Al-Benyan, SABIC vice chairman and CEO, SABIC will benefit from the additional scale, technology, investment potential, and growth opportunities Aramco will bring as a global leader in integrated energy and chemicals production, while remaining focused on meeting the needs of their customers and the creation of value for their shareholders.

Saudi Arabia’s economic and industrial endeavours are centred on Saudi Vision 2030, which is a masterplan to reduce the kingdom’s dependence on oil, diversify its economy, and develop public service sectors such as health, education, infrastructure, recreation and tourism. The integration of operations of Aramco and SABIC will definitely act as a catalyst for realisation of Saudi Vision 2030. As a result of this acquisition, investors around the world are keen to know the future of the much-discussed Aramco IPO.

For the latest refining and petrochemical industry related videos, subscribe to our YouTube page.

For all the latest refining and petrochemical news from the Middle East countries, follow us on Twitter and LinkedIn, like us on Facebook.

You may also like

Sadara awards maintenance services contract to KBR
KBR was originally awarded the feasibility and pre-FEED for the entire Sadara complex, and later awarded the front-end engineering design (FEED) for several major assets
KBR gets three-year extension on general maintenance services contract for SATORP
KBR has capitalised on driving digital transformation, including robotics, modelling and simulation, data analytics, and enterprise software development from its government services business into the energy space
SABIC achieves carbon neutral status at global headquarters, receives PAS 2060 validation
SABIC is among the first in the global chemical industry to achieve the PAS 2060 carbon neutrality specification standard, established by the British Standards Institute
Wood wins engineering contract from SABIC for new technology centre in Saudi Arabia
Wood was recently selected to develop the world’s largest fully integrated crude-oil-to-chemicals (COTC) complex in Saudi Arabia on behalf of SABIC and Saudi Aramco, as the first PMC contractor