SABIC acquisition "ideal" as part of Aramco's long-term strategy, CEO says

Published: 3 July 2020 - 6:30 a.m.

In a conversation with IHSMarkit vice chairman Daniel Yergin, Saudi Aramco CEO Amin Nasser commented on the strategic purpose of the company's acquisition of a 70% stake in SABIC from the Public Investment Fund for $69.1 billion.

“We acquired a 70% stake in SABIC. SABIC is definitely a global and a leading company when it comes to petrochemicals," he said in the video interview. "Our aspiration from the beginning when we started our strategy plans, we decided that we needed to be a leading energy and petrochemical company. We have a leading position when it comes to upstream and refining. We needed to integrate further our refinery with petrochemical; in addition, we are looking at crude-to-chemicals. We could not do all of these aspirations in terms of adding value, extracting more value from our barrels, without a big acquisition."

He also noted the importance of crude-to-chemicals in Saudi Aramco's energy transition strategy. "Crude-to-chemical, that’s part of our strategy in acquiring SABIC," Nasser said. "The highest sector in terms of use of oil demand up to 2040 is chemicals. Climate change and reducing carbon footprints and identifying new usage for oil is a focus area for Saudi Aramco going forward."

“SABIC was ideal," he said. "It’s run based on best-in-class when it comes to operations. It works in more than 50 countries. There’s a lot of synergy with Saudi Aramco; we operate also in similar markets. There’s a lot of value that can be extracted by acquiring a significant position in SABIC. I’m sure we can achieve our goals of adding value to our shareholders, both shareholders in SABIC and Saudi Aramco, by turning our feedstock to petrochemicals and adding value. Crude-to-chemicals is very important to Aramco.”

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