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Saudi Aramco is entering Pakistan’s downstream market by acquiring a 40% stake in Gas & Oil Pakistan Ltd, one of the country’s largest retail and storage companies, as the oil giant seeks international downstream expansion and Saudi Arabia looks to invest more in its ally Pakistan.
Saudi Aramco said on Tuesday it had signed definitive agreements to acquire a 40% equity stake in Gas & Oil Pakistan Ltd (GO), a diversified downstream fuels, lubricants, and convenience stores operator.
The transaction is subject to certain customary conditions, including regulatory approvals, the Saudi oil giant said.
The acquisition would be Aramco’s first entry into the Pakistani fuels retail market, advancing its strategy to strengthen its downstream value chain internationally.
“Our second planned retail acquisition this year aligns with Aramco’s downstream expansion strategy, with a clear path ahead for growing an integrated refining, marketing, lubricants, trading and chemicals portfolio worldwide,” Aramco’s Downstream President Mohammed Y. Al Qahtani said in a statement.
Earlier this year, Qahtani said that Saudi Aramco looks to further bolster its downstream presence in the world’s top crude oil importer, China. The long-term prospects on the Chinese market are favorable for Saudi Aramco, which is looking to further expand its downstream business in China and lock in future term oil supply contracts with the top global oil importer.
Saudi Aramco announced earlier this year two major refinery and petrochemical deals in China, which not only give the world’s largest oil firm a share of the Chinese downstream market but also an additional export outlet for around 690,000 barrels per day (bpd) of Saudi crude in China.
Pakistan’s caretaker Prime Minister Anwaar-ul-Haq Kakar said in September that Saudi Arabia would invest up to $25 billion in Pakistan within the next five years in various sectors including mining, agriculture, and information technology.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com