• 4 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 7 minutes Countries with the most oil and where they're selling it
  • 10 minutes Stack gas analyzers
  • 13 minutes What Would Happen If the World Ran Out of Crude Oil?
  • 15 hours Trudeau Faces a New Foe as Conservatives Retake Power in Alberta
  • 4 hours Ecoside
  • 11 hours Oil at $40
  • 3 hours Japan’s Deflation Mindset Could Be Contagious
  • 18 hours Not Just Nuke: Cheap Solar Panels Power Consumer Appliance Boom In North Korea
  • 6 hours US Military Spend at least $81 Billion Protecting OPEC Persian Gulf Oil Shipping Lanes (16% DoD Budget)
  • 17 hours Haaretz article series _ Saudi Arabia: A Kingdom in Turmoil | Part 1 - Oil Empire
  • 2 days Guaido and the Conoco Award
  • 8 hours Mueller Report Brings Into Focus Trump's Attempts to Interfere in the Special Counsel Investigation
  • 2 days Welcome To The Club: Apple In Talks With Potential Suppliers Of Sensors For Self-Driving Cars
  • 13 hours Negative Gas Prices in the Permian
  • 13 hours Gas Flaring
  • 22 hours The Number Increases: Swiss To Support Belt And Road Push During President's China Trip
Alt Text

Is Oil Due For A Correction?

Crude oil prices are expected…

Alt Text

U.S. Greenlights Two Major LNG Export Projects

The U.S. Federal Energy Regulatory…

Cyril Widdershoven

Cyril Widdershoven

Dr. Cyril Widdershoven is a long-time observer of the global energy market. Presently, he holds several advisory positions with international think tanks in the Middle…

More Info

Trending Discussions

French Total To Enter Saudi Downstream Business

Saudi Aramco is currently mainly in the news with regards to multibillion investment schemes in Asian markets, showing an increased appetite to lock in demand for Saudi crude in China, Pakistan and India. But make no mistake, local ventures could be making headlines again very soon.

In the last couple of days, news has popped up that Aramco and French oil major Total, through its Satorp joint-venture, Sumitomo Mitsui Banking Corporation and Riyad Bank to help raise funds to develop a petrochemical facility in the kingdom. The parties are asked to assist with the financing of the $5 billion Admiral project, which is going be in Jubail in the Eastern Province. Satorp already operates a refinery and will convert fossil fuels into building blocks for plastics. This new project is a logical step forward in the Saudi plan to diversify its oil-dependent economy and turn it into a more sustainable economy. Part of this move is to expand the petrochemicals sector. The Admiral project is expected to have a total production capacity of 2.7 million tons of chemicals per year, and is expected to come onstream by late 2023 or early 2024.

At the same time that this major project is hitting the wires, Saudi sources also have stated that within the next days, Saudi Aramco and Total will be announcing a new deal which entails the entrance of Total into the Saudi retail fuel market. Sources have indicated that this move could be published on Monday January 21, targeting the set up of a new line of Saudi and Total gasoline stations in the country. The move is said to take advantage of the opening of the downstream retail markets before there could be a new move to increase fuel prices in the Kingdom. The entrance by French oil giant Total into the Saudi local fuel markets could be significant, as it stimulates competition and diversification on one-side, but could also indicate a renewed move by the Kingdom to open up other oil and gas, and even upstream sectors for IOCs. Related: This Is How Much Each OPEC+ Member Needs To Cut

Looking at the success story of Total in the UAE (ADNOC), this Saudi move could be very important. It also could increase Aramco’s knowledge and access to upstream gas technologies and capabilities which are much needed to support the future target of self-sufficiency or even the Saudi dream of becoming a net-gas exporter.

The possible announcement of this downstream/retail deal was already a rumor at the end of 2018. At that time, Aramco stated that it had established a domestic fuel retailing subsidiary as part of the national oil company’s drive to expand beyond crude oil production into downstream businesses.

The set-up of this new company, Saudi Aramco Retail Co, has been supported by a feasibility study by Total. The latter was asked to evaluate the feasibility of jointly buying a retail service station network in Saudi Arabia. In December Total was not mentioned by Saudi officials, but now things seems to be heading towards the introduction of a Total retail network in the Kingdom too.

For the position of Aramco as a whole, the latter also is part of the other major goal, the IPO of Aramco. With an increased downstream presence, including access to the Kingdom itself, parties could be much more interested in participating if, as analysts now expect, the targeted Aramco downstream IPO (2021) would be also have this part included. A full scale downstream IPO, which will for sure include the SABIC assets, which are currently being acquired, could fetch the amount targeted by Saudi Crown Prince Mohammed bin Salman of around $100 billion.

By Cyril Widdershoven for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News