Aramco has finalised an agreement to acquire an additional 22.5% stake in Rabigh Refining and Petrochemical (Petro Rabigh) from Sumitomo Chemical for $702m. Petro Rabigh is a refining and petrochemical complex situated on the west coast of Saudi Arabia.
Currently, Aramco and Tokyo-based Sumitomo Chemical each own a 37.5% share in Petro Rabigh, which has been listed on the Saudi Exchange since 2008. Upon completion of this transaction, Aramco will become the largest shareholder with an approximately 60% equity stake.
Sumitomo Chemical will retain a 15% stake in the refining and petrochemical complex.
The transaction, pending customary closing conditions and necessary regulatory approvals, is part of a broader financial strategy designed to enhance Petro Rabigh’s financial stability.
Under the share sale and purchase agreement, Sumitomo Chemical will reinvest all proceeds from the sale into Petro Rabigh through an agreed-upon mechanism. Aramco will also contribute additional funds to Petro Rabigh, matching Sumitomo Chemical’s $702m investment.
This will bring the total financial injection to $1.4bn, aimed at strengthening Petro Rabigh’s financial position and supporting its future strategic plans.
Additionally, Aramco and Sumitomo Chemical have agreed to a phased waiver of shareholder loans, with each company waiving $750m. This will result in a direct reduction of $1.5bn in Petro Rabigh’s liabilities.
These measures are expected to improve Petro Rabigh’s balance sheet and cash liquidity. As part of a remedial plan, Aramco and Sumitomo Chemical will work with Petro Rabigh on further initiatives, including upgrading the refinery to enhance profitability.
The agreement aligns with Aramco’s downstream expansion goals and Sumitomo Chemical’s transition from commodity chemicals to specialty chemicals.
Aramco Fuels senior vice president Hussain A. Al Qahtani said: “Aramco continues to identify opportunities to strengthen its downstream value chain, secure placement of its upstream crude oil with affiliated refineries, and convert more of its hydrocarbons into high-value materials.
“By increasing our shareholding, we expect to achieve even closer integration with Petro Rabigh and facilitate its turnaround strategy. We look forward to building on our existing relationship with Petro Rabigh, in alignment with our strategic goals.”
