Aramco, one of the world’s leading integrated energy and chemicals companies, has signed a definitive agreement to acquire an additional 22.5 percent stake in Rabigh Refining and Petrochemical Co. from Sumitomo Chemical for $702 million. This acquisition will increase Aramco’s ownership in Petro Rabigh, a major refining and petrochemical complex on Saudi Arabia’s west coast, to approximately 60 percent.
Prior to the transaction, both Aramco and Tokyo-based Sumitomo Chemical each held a 37.5 percent stake in Petro Rabigh, which has been publicly listed on the Saudi Exchange since 2008. The acquisition, priced at SAR7 per share, will make Aramco the largest shareholder in Petro Rabigh, while Sumitomo Chemical will retain a 15 percent equity stake. The completion of the deal is subject to customary closing conditions, including regulatory and third-party approvals.
The transaction is part of a broader financial strategy to strengthen Petro Rabigh’s financial position. As part of the agreement, all proceeds from Sumitomo Chemical’s sale will be reinvested into Petro Rabigh. Additionally, Aramco will provide matching funds of $702 million, bringing the total financial injection into Petro Rabigh to $1.4 billion. This capital infusion is aimed at enhancing Petro Rabigh’s financial stability and supporting its future strategic initiatives.
Furthermore, Aramco and Sumitomo Chemical have agreed to a phased waiver of shareholder loans, amounting to $750 million each, which will result in a $1.5 billion reduction in Petro Rabigh’s liabilities. These measures are expected to improve the company’s balance sheet and cash liquidity as part of a broader remedial plan. The plan includes initiatives to upgrade the refinery, which aims to boost the profitability of Petro Rabigh.
Hussain A. Al Qahtani, Aramco’s senior vice president of fuels, stated, “Aramco continues to identify opportunities to strengthen its downstream value chain, secure placement of its upstream crude oil with affiliated refineries, and convert more of its hydrocarbons into high-value materials. By increasing our shareholding, we expect to achieve even closer integration with Petro Rabigh and facilitate its turnaround strategy.”
Seiji Takeuchi, senior managing executive officer of Sumitomo Chemical, added, “Amid the evolving business landscape in both the refining and petrochemical sectors, Aramco and Sumitomo Chemical have considered options to find an appropriate turnaround strategy for Petro Rabigh. We believe this transaction, which aligns with the strategic directions Aramco and Sumitomo Chemical are respectively pursuing, will significantly enhance Petro Rabigh’s financial position.”
The agreement aligns with Aramco’s downstream expansion strategy and Sumitomo Chemical’s shift from commodity chemicals towards specialty chemicals, positioning Petro Rabigh for future success.
For more information visit www.aramco.com
