Saudi Aramco, Total in USD1bln Pact
Saudi Aramco and Total hasve signed a joint venture agreement to develop a network of fuel and retail services in Saudi Arabia.
The 50:50 JV plans to invest around $1 billion over the next six years in the Saudi fuel retail market and start providing motorists with premium fuels and retail services in the Guf kingdom.
“This is a major milestone which will help establish a quality retail fuel network in the Kingdom. We look forward to working together with our long-term partner Total and draw on their extensive experience in the retail fuel market,” said Abdulaziz Al-Judaimi, Saudi Aramco’s Senior Vice President of Downstream and Chairman of the JV Board.
He added: “With this new business, we aim to enhance the quality of services, as well as create jobs and additional investment opportunities in the Kingdom. This JV aligns with Saudi Vision 2030 and supports the goals of the Infrastructure and Transportation Initiative under the Quality of Life program. This project is designed to also help optimize the total value of our hydrocarbon resources.”
Momar Nguer, President of Marketing and Services and Executive Committee Member at Total, said: “Total is proud to be the first international major oil company to invest in Saudi Arabia’s fuel retail network. This joint agreement is in line with our strategy to expand in fast-growing markets worldwide. This new agreement is also reaffirming our long-term partnership with Saudi Aramco. Following our joint investments in SATORP refining and petrochemical complex, we are pleased to bring to the Saudi market our expertise and customer-minded approach in retail and contribute to local employment development.”
The two companies have also signed an agreement with the owners of Tas’helat Marketing Company (TMC) and Sahel Transport Company (STC) to acquire TMC and STC, thereby jointly acquiring their existing network of 270 service stations and their fuel tanker fleet. Saudi Aramco and Total plan to modernize this network and build high-quality service stations at selected locations. This transaction is subject to approval of regulatory authorities.
Ahmed Al-Subaey, Vice President of Marketing, Sales, and Supply Planning and Chairman of the Board of RetailCo., said: “This venture will strive to exceed customer’s expectations. We aspire to become the retailer of choice in Saudi Arabia, providing customers with a unique experience and premium offerings. Saudi Aramco is building on its position as the world’s oil powerhouse and international retail experience, coupled with Total’s experience in this field.”
Mr. Al-Subaey emphasized that the decision to acquire TMC came after extensive feasibility studies of the local fuel and retail market and its promising opportunities. He added: “Our goal is to provide high-quality services that support the tourism industry in the Kingdom and reflect our country’s progress in developing the infrastructure and a reliable service industry.”
The JV will take a phased approach to expanding its network of domestic fuel retail stations, with a plan to reach the goal of owning and operating hundreds of stations by 2021.