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Aramco’s investments exceed $127bn in 2018 – Mubasher Report

Aramco’s investments exceed $127bn in 2018 – Mubasher Report

Riyadh – Mubasher: The Saudi Arabian Oil Co, known internationally as Saudi Aramco, signed a host of contracts and agreements in 2018, with their value surpassing SAR 476.25 billion ($127 billion) as part of its expansion strategy, data compiled by Mubasher, using Aramco statements, showed.

Aramco inked these deals with companies from Malaysia, India, China, France, the UK, the US, added to a mega-partnership with UAE-based Abu Dhabi National Oil Company (ADNOC) to invest in the gas and refining sectors.


Below are the highlights of Aramco’s deals in 2018

In late March, the largest international oil company signed a commercial cooperation contract exceeding SAR 10 billion with 14 American companies, including Schlumberger, Baker Hughes, and Halliburton.

In the same month, Aramco, along with Malaysia’s Petroliam Nasional Berhad (Petronas), jointly announced that operations at their steam cracker refinery JV would commence in the first quarter of 2019.

Nearly two weeks later, the state-owned oil giant signed eight agreements and memorandums of understanding (MoUs) with French counterparts, including Veolia, TechnipFMC, and Schneider Electric, at a combined value of $12 billion.

In the same month, Aramco and France’s Total also agreed to set up $9-billion petrochemical complex in Saudi Arabia’s Jubail Industrial City. The agreement entailed front-end engineering and design (FEED) for the mega petrochemical complex.

In ​April, a month of mega deals for the oil giant, also saw Aramco sign a deal to establish $44 billion refinery in India. Aramco signed an MoU with India's Ratnagiri Refinery and Petrochemicals Ltd (RRPCL) to build a fully-fledged refinery and petrochemicals complex in Ratnagiri, India. The UAE’s top oil firm ADNOC also got a portion of the $44-billion deal.

In May, Aramco and Halliburton signed a contract to improve unconventional gas stimulation services.

Later in August, the Middle Eastern oil producer signed an agreement with Saudi’s ACWA Power and US-based Air Products to carry out an $8 billion gasification and power joint venture (JV) in the kingdom.

During Saudi Arabia’s mega three-day event, the Future Investment Initiative (FII), Aramco unveiled a number of deals including 15 MoUs worth a combined value of $34 billion on the first day.

In October, the largest global oil producer revealed plans to acquire a stake in a refinery-petrochemical project in eastern China’s Zhejiang province. In a separate deal in the same month, Aramco along with Bahrain Petroleum (Bapco) unveiled the commissioning of a 112km oil pipeline under the name AB-4 pipeline in to meet the Bahraini firm’s increasing demand for energy.

In 2018, Baker Hughes, a subsidiary of US conglomerate General Electric, secured deal from Aramco for drilling, coiled tubing, and drilling fluids engineering services in the Marjan Island oilfield.

In November, Aramco and UAE-based ADNOC signed an MoU to explore investment opportunities in the gas sector. Aramco also signed 31 contracts exceeding SAR 100 billion in value during the In-Kingdom Total Value Add Programme (IKTVA).

During the course of the year, Saudi Aramco awarded 16 contracts to domestic companies worth more than SAR 26 billion, as a part of its strategy to raise its presence in the kingdom’s industrial and manufacturing sectors.

Towards the end of 2018, Aramco announced establishing a 100% retail subsidiary that would responsible for its downstream business. The new firm was named Saudi Aramco Retail Company, or RetailCo.


A tale of Aramco and SABIC

During 2018, the Saudi mega oil firm made headlines when it said it was planning to acquire a stake in the Saudi Basic Industries Corporation (SABIC).

In April, the two large Saudi firms launched an award to US-based KBR to manage and carry out a crude oil-to-chemicals (COTC) and FEED complex.

At the beginning of November, Aramco and SABIC signed a deal to build a petrochemicals complex that will convert crude oil to chemicals.


Aramco’s contribution in SPARK

On 12 July, the Saudi Authority for Industrial Cities and Technology Zones (MODON) awarded a licence for the development of the King Salman Energy Park (SPARK) project to Aramco, which had said, earlier in the year, that it had completed around 20% of the project’s engineering designs.

In December, Saudi Crown Prince Mohammed bin Salman laid the foundation stone for the first phase of the SAR 6 billion project SPARK, which is meant to position the Kingdom as a global energy hub. The 50-km project is located between Dammam and Al-Ahsa governorate.

A few days after bin Salman laid the foundation stone, Saudi energy minister Khalid Al-Falih unveiled the signing of 12 deals at a combined SAR 1.2 billion to lease land plots and build companies at SPARK. The deals were signed with several domestic and global companies, including Schlumberger, Halliburton, and Baker Hughes.


Edited and translated by: Mohammad Hesham Azab