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Saudi Aramco, the world's largest oil exporter, hopes to become a global chemicals and refining company and seeks to take advantage of the fastest growing petroleum industry sectors while supporting the world's largest oil and gas industry. economic diversification of the kingdom.
The company reserves $ 500 billion to invest in the next 10 years, of which $ 160 billion for natural gas projects and $ 100 billion for chemical projects, said Aramco president Amin Nbader in an interview at Dhahran, Saudi Arabia
This expense would be in addition to the company's proposed acquisition of a controlling interest in Sabic, the largest chemical company in the Middle East, a transaction valued at 70 billions of dollars .
"We need a large acquisition to be present in different markets quickly," Nbader said. Sabic is present in over 50 countries and for Aramco, "it makes sense" to acquire a business of this size, he added.
Aramco, which also plans what would be the largest equity sale in the world, plays a central role in attempts to transform the Saudi economy.
Prince Mohamed Salman defends a strategy of creating new industries and diversifying the kingdom after decades of dependence on oil sales. Aramco's plan to buy 70% of Saudi Basic Industries – Sabic's official name – from the Sovereign Public Investment Fund is an important part of the transformation.
Financing Sabic
Aramco plans to complete negotiations with the fund and "all financial instruments are on the table" to settle the transaction, Nbader said.
Aramco's interest in Sabic lies partly in predictions that demand for petrochemicals will account for a growing proportion of global oil production. According to the International Energy Agency, the use of petrochemicals will increase faster than any other segment of the oil industry.
The Sabic acquisition project, however, required to defer until 2020 or 2021 the IPO of Aramco, said Prince Mohámed during an interview in October.
"The OPI is a decision made," said Nbader. "It's only a matter of time."
Aramco, whose official name is Saudi Arabian Oil, wants to convert 3 million barrels of crude oil per day – about 30% of its daily production – into chemicals. It also aims to more than double its refining capacity by the middle of the next decade.
"You can absorb market volatility when you have a balance between upstream and downstream," said Nbader. "That's what our strategy is all about."
A 32% drop in the price of oil from October 3rd could complicate the country's financial plans. The international outrage surrounding the badbadination of Saudi dissident Jamal Khashoggi at the country's consulate in Istanbul could also do so. Nbader downplayed the fears aroused by Aramco 's call as an investment.
The demand for oil is in good health, he said. "Next year will be the same in terms of additional demand."
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