meed-logo

line1 line2 line3
SIGN IN / REGISTER

Aramco to acquire majority stake in Petro Rabigh

7 August 2024

Register for MEED's 14-day trial access 

Saudi Aramco has announced signing an agreement with Japan’s Sumitomo Chemical Company to acquire an additional 22.5% stake in Rabigh Refining & Petrochemical Company (Petro Rabigh) in Saudi Arabia.

The transaction, which is subject to regulatory approvals and other third-party approvals, is valued at $702m, Aramco said in a statement on 7 August.

Aramco and Sumitomo Chemical presently own 37.5% shares each in Petro Rabigh, with the remaining 25% shares trading on the Saudi Exchange (Tadawul) since 2008.

Following the completion of the transaction, which is priced at SR7 ($1.86) a share, Aramco will become the majority shareholder in Petro Rabigh, with a 60% stake, and Sumitomo Chemical will retain a 15% stake.

ALSO READ: Petro Rabigh starts operations at carbon capture plant

Petro Rabigh was originally established as a basic topping refinery, with crude oil processing facilities, at Rabigh on the kingdom’s Red Sea coast to the north of Jeddah. However, in 2005, Aramco and Sumitomo Chemical formed an equal joint venture to transform the business into an integrated refinery and petrochemicals complex.

Petro Rabigh phase 1 was launched in 2009 to expand Saudi Arabia’s annual production capacity of refined products and petrochemicals. The Petro Rabigh downstream complex consists of a topping refinery that has a 340,000 barrel-a-day (b/d) crude distillation unit, a 47,000 b/d hydrotreater, a 12 million cubic-feet-a-day (cf/d) hydrogen plant, a 75,000 b/d naphtha merox unit and a 60,000 b/d kerosene merox unit, along with supporting utilities, product tankage and a marine terminal.

The phase 2 expansion project, which was commissioned in 2018, added 15 chemical plants to the Petro Rabigh complex, increasing the facility’s capacity to process an additional 30 million cf/y of ethane and 3 million tonnes a year (t/y) of naphtha.

Expansion of the main existing chemical plant and establishing a clean fuels complex comprising polyether polyols, naphtha treating and sulphur recovery units were also part of the phase 2 project.

Boosting Petro Rabigh financials

The transaction to acquire a majority stake “is part of a package of financial measures intended to reinforce Petro Rabigh’s financial position”, Aramco said in its statement.

Under the terms of the share sale and purchase agreement, all proceeds received by Sumitomo Chemical from the sale will be injected into Petro Rabigh, through a mechanism to be agreed with Petro Rabigh.

Aramco will also provide additional funds to Petro Rabigh, via a mechanism also to be agreed, matching the $702m from Sumitomo Chemical to improve Petro Rabigh’s financial position and support its future strategy, bringing the aggregate injection amount to $1.4bn. 

In addition, Aramco and Sumitomo Chemical have agreed to a phased waiver of shareholder loans of $750m each, which will result in a $1.5bn direct reduction 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 that Aramco and Sumitomo Chemical intend to explore with Petro Rabigh, which also includes initiatives to upgrade the refinery with the aim of helping improve the profitability of the business,” Aramco said.

“The agreement also aligns with Aramco’s downstream expansion and Sumitomo Chemical’s move away from commodity chemicals toward specialty chemicals,” Aramco added in its statement.

In a separate statement, Aramco said: “In addition to helping improve Petro Rabigh’s financial position, the share transaction is expected to pave the way for discussions around further possible structural investments, in accordance with applicable governance, intended to improve Petro Rabigh’s performance and support its turnaround strategy, with a view to identifying potential opportunities to elevate its financial performance through upgrading its product mix, enhancing its asset reliability and optimising its operations.

“Petro Rabigh is also expected to benefit from greater efficiency achieved through economies of scale.”

ALSO READ: Petro Rabigh awards KBR maintenance contract

https://image.digitalinsightresearch.in/uploads/NewsArticle/12299874/main.jpg
Indrajit Sen

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Saudi Arabia battery storage awards provide fresh lift

    24 August 2026

    Commentary
    Mark Dowdall
    Power & water editor

    The latest battery storage awards provide a welcome injection of investment into Saudi Arabia’s power market, which has seen a sharp slowdown in contract awards this year.

    Saudi Power Procurement Company’s four Group 1 storage service agreements, announced last week, are worth more than $1.16bn and cover 2,000MW of capacity.

    That is significant against the wider market. According to regional project tracker MEED Projects, Saudi Arabia recorded $19.7bn in power sector contract awards in the first seven months of 2025, compared with just $2.5bn in new awards in the same period this year.

    The battery energy storage system (bess) awards therefore account for a sizeable share of the activity recorded so far this year and provide a much-needed source of new contracting activity.

    Importantly, this is not a one-off. SPPC issued the request for proposal (RFP) for its second group of bess projects in July, covering six projects with a combined capacity of 3,000MW and 12,000MWh.

    With the Group 1 tender taking around 18 months from RFP to contract award, it is reasonable to expect Group 2 contracts to be signed in 2027.

    At the same time, the awards for six independent renewable plants under Round 7 of Saudi Arabia’s National Renewable Energy Programme (NREP), with a combined capacity of 5,300MW, are also likely to move into next year, with the latest bid deadlines now extending into September.

    Although a substantial pipeline remains in procurement, it is only once these projects move from tender to award and into construction that this pipeline translates into market activity.

    It is important that these tenders continue to progress at the pace established by the early rounds of Saudi Arabia’s renewable energy programme and now also SPPC’s independent storage provider bess scheme.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18962923/main.jpg
    Mark Dowdall
  • Qatar receives bids for major power grid expansion

    24 August 2026

     

    Qatar General Electricity & Water Corporation (Kahramaa) has received bids for several packages under a major power transmission expansion project tendered in April.

    The project covers new substations at multiple voltage levels, as well as the supply and installation of 400kV extra-high-voltage power cables. The overall scheme is estimated to cost $650m.

    It is being tendered as part of Kahramaa’s 2026 procurement plan, which includes 198 tenders with a total estimated value of QR21.4bn ($5.9bn).

    According to sources, bids were submitted for the following packages on 20 August:

    • Substation packages S1 and S2, covering new 132/11kV substations (estimated cost: $200m)
    • Package S3, covering new 66/11kV substations ($50m)
    • Package S4, including a new 400/220/132kV substation, as well as upgrades and modifications to existing 400kV and 220kV substations ($200m)
    • Package S5, covering new 132/11kV substations and upgrades to existing 132kV and 66kV substations ($100m)
    • Cable packages C1 and C2, covering 400kV cables ($100m)

    Kahramaa previously stated that foreign companies not registered in Qatar would be allowed to participate in the bidding, subject to meeting specified conditions, including registration and certification requirements.

    In June, the electricity and water utility awarded contracts worth more than QR2.2bn ($604m) to expand the electricity transmission network in the country’s western region.

    The engineering, procurement and construction (EPC) works will support the integration of the 2GW Dukhan solar power project into Qatar’s national electricity grid. The scope includes new and upgraded substations, as well as the installation of underground cables and overhead transmission lines.

    Kahramaa said contracts were awarded to local firm Voltage Engineering, Turkiye’s Best & Betas Consortium, India’s Larsen & Toubro and South Korea’s LS Cable.

    Of Kahramaa’s 2026 procurement plan, electricity transmission projects account for QR8.9bn ($2.4bn) and include the construction of new 400/132kV substations in Al-Wukair and Al-Mashaf, as well as the expansion of 400kV substations at Ras Laffan.

    These also cover the installation of 132kV underground cables between Al-Sailiya and Al-Rayyan over a 24-kilometre route, as well as upgrades to the 400kV and 220kV networks.

    Additionally, there are 64 planned electricity distribution projects managed by the Electricity Distribution Department that cover the medium-voltage and low-voltage networks throughout Doha and the regional municipalities. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18962223/main.jpg
    Mark Dowdall
  • Maaden closes $1bn term loan and credit facility

    24 August 2026

    Saudi Arabian Mining Company (Maaden) has announced the closing of its inaugural international syndicated term loan and revolving credit facilities, worth a total of $1bn.

    The $500m international term loan facility will support Maaden’s growth agenda and general corporate purposes, including funding growth projects across its portfolio.

    The $500m international revolving credit facility, which is expected to remain undrawn, provides additional committed funding capacity “as Maaden continues to scale its business and execute its long-term growth strategy”.

    The transaction “was met with strong support from the international banking market, attracting participation from a diverse group of leading international banks across key global financial markets”, including the US, Canada, Europe, China and Japan. The facilities were oversubscribed, Maaden said.

    ALSO READ: Maaden and Aramco sign deal to create joint venture

    “The level of demand reflects the global banking community’s confidence in Maaden’s financial strength, strategic direction and ambitious growth plans,” the Saudi state miner said in its statement.

    “The facilities mark another significant milestone in Maaden’s funding journey – further diversifying its sources of funding and broadening its access to global capital providers as the company continues to advance its long-term growth ambitions.

    “Maaden continues to make significant progress across its growth pipeline, expanding production, advancing major projects and accelerating exploration as it builds a world-class mining company at the heart of Saudi Arabia’s economic transformation.”

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18962086/main4516.jpg
    Indrajit Sen
  • Dubai inflation slows to 5.3% in July

    24 August 2026

    Dubai’s annual inflation rate slowed to 5.3% in July, down from 5.7% in June, as a decline in transport costs eased pressure on consumer prices, according to Emirates NBD.

    The bank said the slowdown supported its view that price growth peaked at mid-year, and it expects inflation to continue easing through the rest of 2026. Monthly price growth slowed to 0.1% in July, from 0.4% in June, the weakest pace since February.

    Transport was the clearest sign of the moderation. Annual price growth in the category slowed to 11.9% in July, from 18.1% in June, as transport costs fell 3.7% over the month. Fuel and lubricant inflation eased to 24.1% year on year, from 48.3%, tracking a decline in local petrol prices.

    Petrol remains the main swing factor in the emirate’s inflation. Transport contributed 1.1 percentage points to headline inflation in July, down from 1.7 percentage points in June. Emirates NBD said the relief may prove temporary, with Super 98 petrol prices climbing 5.9% in August to leave them 33.8% higher than a year earlier. The bank expects headline inflation to edge higher in the August figures before easing again later in the year.

    The UAE deregulated petrol and diesel prices in 2015 and reviews them monthly against global prices, meaning changes in global fuel costs pass through to consumers quickly. Transport, which includes fuel, accounts for 9% of Dubai’s consumer price index basket.

    Housing remained the largest contributor to inflation even as its impulse faded. Housing and utilities, which account for about two-fifths of the basket, added 2.8 percentage points to headline inflation. Annual price growth in the category slowed to 7.0%, from 7.4% in January.

    Food inflation edged up to 7.8% year on year, from 7.6% in June, which the bank attributed to lingering supply-chain disruption from the regional conflict. Inflation in restaurants and hotels accelerated to 4.5% year on year, from 1.7% in June.

    Emirates NBD forecasts inflation of 2.9% by year-end but said risks to that projection were tilted to the upside, given lingering pressures in food and housing.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18961735/main1839.jpg
    Colin Foreman
  • Libya oil project on track for 2027 completion

    24 August 2026

     

    The project to develop a workers’ camp at Libya’s Erawin oil field is on track for completion next year, according to industry sources.

    The project, estimated to be worth about $50m, is being executed by the Libyan oil services company Al-Saraya Al-Hamara, headquartered in the city of Sebha.

    The Libyan company was awarded the contract in February 2025.

    The scope of the project includes:

    • Construction of an accommodation camp
    • Construction of the camp maintenance warehouse
    • Construction of the camp office
    • Construction of a fire brigade shelter
    • Construction of a kitchen and mess hall
    • Construction of a mosque
    • Construction of a laundry room
    • Construction of a clinic
    • Construction of parking facilities
    • Installation of a fire and gas system
    • Installation of a power generator
    • Construction of associated facilities

    The client on the project is Zallaf Libya Oil & Gas Exploration & Production Company.

    Zallaf Libya Oil & Gas Exploration & Production Company was established in Libya in 2013 and is wholly owned by Libya’s state-owned National Oil Corporation.

    The Erawin field development project is located about 800 kilometres south of Tripoli and 100km southwest of the El-Sharara field.

    Libya shipped its first cargo of crude from the Erawin oil field in November 2023.

    The shipment departed from Libya’s Zawiyah port and consisted of 600,000 barrels of crude.

    Australia-based Worley Parsons was appointed as the front-end engineering and design (feed) contractor for the early production facility project in 2019.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18953632/main.jpg
    Wil Crisp