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Aramco to expand presence in China by acquiring 10% stake in Rongsheng Petrochemical

Aramco to expand presence in China by acquiring 10% stake in Rongsheng Petrochemical

- Deal involves placement of 480,000 barrels per day of crude to the largest integrated refining and chemicals complex in China

DHAHRAN, Saudi Arabia, March 27, 2023 /PRNewswire/ -- Aramco, one of the world's leading integrated energy and chemicals companies, has signed definitive agreements to acquire a 10% interest in Shenzhen-listed Rongsheng Petrochemical Co. Ltd. ("Rongsheng") for RMB 24.6 billion ($3.6 billion at current exchange rates), in a deal that would significantly expand its downstream presence in China.

 


Amin H. Nasser, Aramco President & CEO (center), attends the signing ceremony for Aramco’s acquisition of a 10% interest in Rongsheng Petrochemical Co. Ltd. Mohammed Y. Al Qahtani, Aramco Executive Vice President of Downstream (sitting right), and Li Shuirong, Rongsheng Chairman (sitting left), signed the documents in the presence of Anwar Al Hejazi, Aramco Asia President (standing left) and Xiang Jiongjiong, Rongsheng CEO (standing right)

 

Through the strategic arrangement, Aramco would supply 480,000 barrels per day (bpd) of Arabian crude oil to Rongsheng affiliate Zhejiang Petroleum and Chemical Co. Ltd (ZPC), under a long-term sales agreement. Aramco Overseas Company ("AOC"), a wholly-owned subsidiary of Aramco, will acquire the interest in Rongsheng.

Among other assets, Rongsheng owns a 51% equity interest in ZPC, which in turn owns and operates the largest integrated refining and chemicals complex in China with a capacity to process 800,000 bpd of crude oil and to produce 4.2 million metric tons of ethylene per year.

Mohammed Y. Al Qahtani, Aramco Executive Vice President of Downstream, said: "This announcement demonstrates Aramco's long-term commitment to China and belief in the fundamentals of the Chinese petrochemicals sector. It is an important acquisition for Aramco in a key market, supporting our growth ambitions and advancing our liquids to chemicals strategy. It also promises to secure a reliable supply of essential crude to one of China's most important refiners."

Li Shuirong, Rongsheng Chairman, said: "This strategic co-operation will take our long-term friendship and mutual trust to a new level, and paves the way for a bright future for the high-quality development of the world's petrochemicals industry. I believe that Aramco's involvement will greatly help Rongsheng implement its petrochemical growth strategy."

The investment would anchor an important association between Aramco, Rongsheng and ZPC, which operates one of the world's most state-of-the-art chemical conversion assets.

The transaction involves an off-market secondary sale of Rongsheng shares by majority shareholder Zhejiang Rongsheng Holding Group, with potential for future collaboration between the parties in trading, refining, chemicals production and technology licensing. The transaction is expected to close by the end of 2023, and is subject to regulatory approvals.

It follows the announcement on March 26 that the Aramco joint venture, Huajin Aramco Petrochemical Company (HAPCO), planned to start construction of a major integrated refinery and petrochemical complex in northeast China in the second quarter of 2023. Aramco, which has a 30% stake in HAPCO, will supply up to 210,000 bpd of crude oil feedstock to the complex.

Combined, the partnership with Rongsheng and the HAPCO joint venture would see Aramco supply a total of 690,000 bpd of crude to high chemical conversion assets.

About Aramco

Aramco is a global integrated energy and chemicals company. We are driven by our core belief that energy is opportunity. From producing approximately one in every eight barrels of the world's oil supply to developing new energy technologies, our global team is dedicated to creating impact in all that we do. We focus on making our resources more dependable, more sustainable and more useful. This helps promote stability and long-term growth around the world. www.aramco.com.

Disclaimer

The press release contains forward-looking statements. All statements other than statements relating to historical or current facts included in the press release are forward-looking statements. Forward-looking statements give the Company's current expectations and projections relating to its capital expenditures and investments, major projects, upstream performance, including relative to peers, and growth in downstream and chemicals. These statements may include, without limitation, any statements preceded by, followed by or including words such as "target," "believe," "expect," "aim," "intend," "may," "anticipate," "estimate," "plan," "project," "will," "can have," "likely," "should," "would," "could," "continue," "forward" and other words and terms of similar meaning or the negative thereof. Such forward–looking statements involve known and unknown risks, uncertainties and other factors beyond the Company's control that could cause the Company's actual results, performance or achievements to be materially different from the expected results, performance, or achievements expressed or implied by such forward–looking statements, including the following factors: international crude oil supply and demand and the prices at which Aramco sells crude oil; the impact of COVID-19 on business and economic conditions and on supply and demand for crude oil, gas and refined and petrochemical products; adverse economic or political developments that could impact the Company's results of operations; competitive pressures faced by the Company; any significant deviation or changes in existing economic and operating conditions that could affect the estimated quantity and value of proved reserves; operational risks and hazards in the oil and gas, refining and petrochemicals industries; the cyclical nature of the oil and gas, refining and petrochemical industries; weather conditions; political and social instability and unrest and actual or potential armed conflicts in the regions in which Aramco operates and other areas; losses from risks related to insufficient insurance; the Company's ability to deliver on current and future projects; litigation to which the Company is or may be subject; the Company's ability to realize benefits from recent and future acquisitions, including with respect to SABIC; risks related to international operations, including sanctions and trade restrictions, anti–bribery and anti–corruption laws and other laws and regulations; risks related to oil, gas, environmental, health and safety and other regulations that impact the industries in which Aramco operates; the Company's dependence on its senior management and key personnel; the reliability and security of the Company's IT systems; climate change concerns and impacts; risks related to Government-directed projects and other Government requirements, including those related to Government-set maximum level of crude oil production and target MSC; fluctuations in interest rates and foreign exchange rates; and other risks and uncertainties that could cause actual results to differ from the forward looking statements in this press release, as set forth in the Company's latest periodic reports filed with the Tadawul. For additional information on the potential risks and uncertainties that could cause actual results to differ from the results predicted please see the Company's latest periodic reports filed with the Tadawul. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which it will operate in the future. The information contained in the press release, including but not limited to forward-looking statements, applies only as of the date of this press release and is not intended to give any assurances as to future results. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to the press release, including any financial data or forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law or regulation. No person should construe the press release as financial, tax or investment advice. Undue reliance should not be placed on the forward–looking statements.

 

 

 

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Source: Aramco

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