Saudi oil giant Aramco announced Monday its intention to acquire a 10% stake in Chinese petrochemical company Rongsheng Petrochemical, demonstrating its long-term commitment to China. This acquisition comes against a background of political rapprochement with China, the main oil importer.
In a statement, Aramco announced that it would supply some 480,000 barrels per day of oil to Rongsheng under a long-term sales agreement. The stake is seen as important for Aramco in a key market, as it ensures a reliable supply of oil to one of China’s most important refiners.
This announcement comes a day after Aramco announced that it will participate with two Chinese companies in the construction of a refinery and petrochemical plant in Panjin, in northeast China. These oil infrastructures should be fully operational by 2026.
Aramco has set a goal of reducing greenhouse gas emissions to net zero at its manufacturing facilities by 2050. During the China Development Forum in Beijing, Aramco CEO Amin Nasser renewed his call to invest in fossil fuels, saying that Chinese President Xi Jinping shares this view.
“This announcement demonstrates Aramco’s long-term commitment to China and its confidence in the pillars of the Chinese petrochemical sector,” said Mohammed al-Qahtani, vice president of Aramco. “This is an important acquisition for Aramco in a key market,” he added.
Aramco’s net profit was $161.1 billion last year, up 46% year-on-year. These are the highest profits for Aramco since the 1.7% listing of its shares on the Saudi Stock Exchange in December 2019.
Aramco’s acquisition of a stake in Rongsheng Petrochemical confirms its commitment to China and its goal of strengthening its business in the liquid-to-chemical sector.
