Saudi
Arabian Oil Co. expanded its ownership of refineries and petrochemical plants
in Indonesia and Malaysia with investments totaling $13 billion as it prepares
for what may be the biggest ever initial public offering by bulking up its
business in Asia, its largest market.
The
Middle Eastern oil giant, known as Saudi Aramco, signed a $6 billion agreement
Wednesday with Indonesia’s PT Pertamina for refinery projects. A separate $7
billion deal with Malaysia’s state-owned Petroliam Nasional Bhd. to develop an
oil refinery and naphtha cracker in the southeast Asian country and provide up
to 70 percent of the crude requirements, was sealed Tuesday.
“This
will strengthen the equity story for Saudi Aramco,” Khalid Al Falih, the
kingdom’s energy minister, said in Kuala Lumpur on Tuesday. “Investors will be
looking for a company that has breadth in its portfolio.”
The
deals are part of Saudi Aramco’s long-standing strategy of investing in
refining to help lock in demand for its crude, as it has done in markets
including the U.S., Japan and South Korea. The company is battling for global
market share amid challenges posed by U.S. shale oil producers, Russia and even
fellow members of the Organization of Petroleum Exporting Countries.
Cilacap
Refinery
“Saudi
Arabia, as OPEC’s largest producer and exporter, wants to secure outlets in the
world’s most dynamic and fastest growing energy market,” said John Driscoll,
the chief strategist at JTD Energy Services Pte, who has spent more than 30
years in the petroleum trading industry in Singapore. “A $7 billion deal
positions the kingdom as Malaysia’s largest single investor and provides the
basis for future partnerships and collaboration.”
Indonesia’s
Foreign Minister Retno Marsudi commented on the refinery deal in Bogor, West
Java on Wednesday, and didn’t immediately offer details. In December PT
Pertamina said it formed a joint venture with Saudi Aramco and planned to boost
its Cilacap refinery capacity 15 percent to 400,000 barrels a day.
Saudi
Aramco’s investment in the Malaysia’s $27 billion development, known as
Refinery and Petrochemicals Integrated Development, or RAPID, in Pengerang is a
boost to the project that borders the traditional Asian oil trading and
refining center of Singapore, and was announced in 2011 and originally
scheduled to come online last year.
King’s
Visit
RAPID
will include a 300,000 barrel-a-day refinery, scheduled to start in 2019, which
can produce fuels that meet Euro 5 emissions standards and provide feedstock
for a connected 3.5 million tons-a-year petrochemical plant, according to a
joint statement from both companies.
The
deal significantly reduces the financial burden on Petronas and will allow it
to allocate capital to other businesses such as liquefied natural gas and
petrochemicals, according to a Feb. 28 note from BMI Research. The agreement
also helps lock-in future demand for Saudi crudes, according to the note.
“Malaysia
offers tremendous growth opportunities and today’s agreement further strengthens
Saudi Aramco’s position as the leading supplier of petroleum feedstock to
Malaysia and Southeast Asia,” Saudi Aramco President Amin Nasser said in the
statement.
The
deal coincides with a visit to Asia by Saudi Arabia’s King Salman bin
Abdulaziz, who is leading an entourage to strengthen ties with the region.
Malaysian and Saudi Arabian companies signed memorandums of understanding worth
a total 9.74 billion ringgit ($2.19 billion) in areas including construction,
aerospace, halal, and hajj-related industries, according to a statement from
Malaysia’s trade ministry.
Source: www.oilpro.com
No comments:
Post a Comment