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This expense would be added to the expected purchase by the company of a controlling interest in Sabic, the largest chemical company in the Middle East.
Saudi Aramco's ambition is to become a refiner and manufacturer of chemicals around the world, seeking profits in areas of the oil industry, where demand is growing fastest and also supporting the kingdom's economic diversification .
The world's largest oil exporter spends US $ 500 billion on investment in the next 10 years. , including 160 billion US dollars for natural gas development and 100 billion US dollars for chemical projects, said Aramco CEO Amin Nbader in Dhahran, Saudi Arabia. The expense would be added to the planned buyout by the company of a controlling interest in Sabic, the largest chemical company in the Middle East, which could be valued at around US $ 70 billion.
"We need a major acquisition so that we are quickly in different markets," Nbader said. Sabic is present in over 50 countries and "it makes sense" for Aramco to acquire a business of this size, he said.
Aramco, which also plans what would be the world's largest stock exchange, plays a central role in efforts to transform the Saudi economy. Crown Prince Mohammed bin Salman is leading a strategy to create new industries and diversify the kingdom to rid it of decades of dependence on oil sales. Aramco's plan to buy 70% of Saudi Basic Industries Corp. is an important step in this transformation, with Sabic officially known as the Sovereign Public Investment Fund.
Aramco plans to conclude negotiations with the FIP soon and "all financial instruments are on the table" to fund it, Nbader said.
Aramco's interest in Sabic is based in part on projections Petrochemicals will account for a growing proportion of global crude oil production. According to the International Energy Agency, the use of petrochemicals will increase faster than for any other segment of the oil industry.
However, the planned agreement with Sabic provided for a postponement of the IPO of Aramco until 2020 or 2021, the government said. Prince Mohammed in an interview in October
"We are committed to making public," Nbader said. "It's a matter of timing."
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Aramco, formerly known as Saudi Arabian Oil Co., wants to convert 3 million barrels of crude per day, about 30% its daily production, in chemicals. It also aims to more than double its refining capacity by the middle of the next decade.
"Market volatility can be absorbed by balancing the earlier and later phases," said Nbader. "That's where our strategy goes."
A 32% drop in the price of oil from October 3rd could complicate the country's financial plans. This could be the international demonstration against the badbadination of Saudi dissident Jamal Khashoggi at the country's consulate in Istanbul. Nbader dismissed concerns about Aramco 's call as an investment.
The demand for oil is healthy, he said. "Next year will also be the same in terms of additional demand."
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