Saudi Aramco to buy out Shell in 50:50 refining JV for $631 million
22 April 2019
Saudi Aramco, which is in the midst of a major expansion programme, investing in joint ventures and green field projects both within the country and overseas, will acquire Royal Dutch Shell’s 50 per cent stake in their Saudi refining joint venture SASREF for $631 million, the two companies said on Sunday.
The purchase, which is part of Aramco’s strategy to expand its downstream operations, will be completed later this year, the two companies stated in a joint release.
Saudi Aramco Shell Refinery Co (SASREF), based in Jubail Industrial City in Saudi Arabia, has a crude oil refining capacity of 305,000 barrels per day (bpd).
“Saudi Aramco will take full ownership and integrate the refinery into its growing downstream portfolio. SASREF will continue to be a critical facility in our refining and chemicals business and we look forward to further optimising its performance and long term viability,” Abdulaziz al-Judaimi, Aramco’s senior vice president of downstream, said in the statement.
“SASREF has been a long and successful partnership between Shell and Saudi Aramco. The refinery has operated with good reliability, and has an impressive safety record. We’re proud of what we have achieved together over the past four decades and will continue to explore new business opportunities,”
John Abbott, Shell Downstream director, said.
The acquisition supports Saudi Aramco’s plan to increase the complexity and capacity of its refineries, as part of its long-term Downstream growth strategy.
For Shell, the sale is part of an ongoing effort to focus its refining portfolio, integrating with Shell Trading hubs and Chemicals. The sale is expected to complete later this year, subject to regulatory approval.
The refinery has a capacity of 305,000 barrels per day. The main products are liquefied petroleum gas, naphtha, kerosene, diesel, fuel oil and sulphur.
Aramco aims to become a global leader in petroleum and petrochemical products and the world’s largest integrated energy firm, with refining operations and petrochemical production across the world.