Saudi Aramco acquires additional stake in Petro Rabigh
Saudi Aramco has completed the acquisition of a 22.5 per cent stake in its refining and petrochemicals joint venture Petro Rabigh, according to Reuters on October 9. The agreement comes as part of a turnaround plan for the loss-making venture.
The oil company acquired Petro Rabigh from Japan’s Sumitomo Chemical for 2.63 billion riyals (£547 million) and raised Aramco’s stake in the petrochemical company to approximately 60 per cent.
The turnaround plan for Petro Rabigh also includes the waiver of $1.5 billion (£1.1 billion) in shareholder loans and a future joint capital injection of 5.26 billion riyals (£1 billion), evenly split between Aramco and Sumitomo.
The agreement reduces Sumitomo’s stake to 15 per cent and will see Aramco and its affiliates take over marketing rights for Petro Rabigh’s products.
Petro Rabigh posted significant losses in recent years. It last turned a full-year profit in 2021 and has accumulated net losses of 12.4 billion riyals (£2.5 billion) between 2022 and the first half of 2025, according to calculations from Reuters.
The state-owned oil company is navigating a period of reduced profits due to lower oil prices. In August, Aramco reported a 22 per cent drop in second-quarter profit and identified cost-cutting measures across the company. The company also intends to divest non-core assets to unlock capital for higher-return investments.
“The board welcomes the steps and measures agreed to be taken by Saudi Aramco, which highlight its support, as a substantial shareholder, for the long-term prospects of Petro Rabigh,” the joint venture said in a filing.
The news comes after Aramco halted expansion plans for three chemical projects due to weaker oil prices.
This marks the latest example of delays to Saudi Arabia’s long-term projects as softer oil prices squeeze the country’s finances.
The government and Aramco have been forced to increase borrowings due to pressure, with the company falling into a net debt position last year.
Reuters, Maghrebi.org
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