Aramco, Total to invest $5 billion in new Saudi Arabia plant

12 April, 2018, 07:28 | Author: Roderick Gutierrez
  • How investors can buy into Saudi Arabia’s reform even without an international Aramco listing

Saudi Aramco, the world's biggest oil producer, has signed an agreement to develop with a consortium of Indian refiners a $44 billion integrated refining and petrochemical complex as it looks to secure its market share in India.

Meanwhile, Saudi Arabia - which is said to be aiming for oil near US$80 to pay for its own crowded policy agenda - is planning to sign a deal to participate in a refinery on India's west coast as part of its strategy to secure sources of consumption for its crude.

Motiva Enterprises LLC, a wholly-owned downstream oil and gas subsidiary of Saudi Aramco, recently signed MoUs worth between US$8 billion - US$10 billion with U.S. companies Honeywell UOP LLC and TechnipFMC plc, in a ceremony in Houston timed to coincide with the official visit to the USA by HRH Crown Prince Mohammed bin Salman of Saudi Arabia.

Speaking on the sidelines of the International Energy Forum, a gathering of oil producers and consumers, Saudi Oil Minister Khalid al-Falih said the OPEC kingpin is trying to ensure that there is a close match of supply and demand "so that markets are not anxious about gluts and over-supply and continued investment will flow into the industry". According to a statement by the Ministry of Petroleum & Natural Gas, Saudi Aramco may also seek to include a strategic partner to co-invest in the project.

Aramco and the conglomerate will now discuss the formation of a joint venture to provide ownership, control and management of the project, which will be capable of processing 1.2m barrels of crude oil per day.

Besides the petrochemicals project, more than the other dozen agreements were signed at the France-Saudi business forum Tuesday.

Last month the Saudi firm awarded more than $8 billion worth of contracts to U.S. firms to boost its United States refinery operations.

Aramco has also pledged billions of dollars for deals in Malaysia and Indonesia in the past year. We went through a part of the process, including the due diligence, but due to political and legal reasons that process was discontinued.

He said Aramco is also keen on venturing into fuel retailing. "We want to be in every neighbourhood, every city, providing energy solutions", he said.

Jadaan said the government had not yet decided whether to list Aramco on the Saudi exchange alone, on a stock market overseas or seek a dual listing. When the government announced plans to sell about 5 percent of Aramco to raise over $100 billion, an IPO was expected by the end of this year, with possible listing list on foreign markets including New York, London and Hong Kong.



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