Saudi Aramco, the world’s largest oil-exporting company, has closed a deal to acquire a 10 per cent stake in Shenzhen-listed Rongsheng Petrochemical for $3.4 billion.
Under the terms of the deal, Aramco will supply 480,000 barrels per day of Arabian crude oil to Rongsheng affiliate Zhejiang Petroleum and Chemical Co (ZPC) under a long-term sales agreement, the company said on Friday.
“Our strategic partnership with Rongsheng advances Aramco’s liquids-to-chemicals strategy while growing our presence in China, and showcases our importance as a reliable supplier of crude oil,” said Mohammed Al Qahtani, Aramco's downstream president.
“This key acquisition is an important part of Aramco’s long-term growth strategy, expanding our presence in a vital market.”
Aramco has increasingly looked at refining and petrochemical investments in China, the world's biggest consumer of oil.
Rongsheng owns a 51 per cent equity stake in ZPC, whose refining and chemicals complex can process up to 800,000 bpd of crude oil and produce 4.2 million metric tonnes of ethylene per year.
China’s crude imports hit a record 16 million bpd in March as its economy continued to recover following the lifting of Covid-19 restrictions earlier this year, the International Energy Agency said in its April oil market report.
The Asian country was the largest importer of oil from Saudi Arabia last year, buying about 1.75 million bpd.
In December, Aramco and the China Petroleum and Chemical Corporation, better known as Sinopec, signed an initial agreement to build a refinery and a petrochemical plant in the world's second-largest economy.
The 320,000-bpd refinery and 1.5 million tonne-per-year petrochemical cracker complex will be operational by the end of 2025.
Aramco is looking for investment opportunities in India amid a surge in crude demand in the South Asian country, Amin Nasser, the company’s president and chief executive, said during an event this month.
In terms of crude imports, both China and India – two large oil-consuming countries – have surpassed pre-coronavirus levels, Mr Nasser said.
“The completion of this transaction marks the entry of Rongsheng and Aramco into a new era together, and also signifies an important step forward in Rongsheng's internationalisation strategy,” said Rongsheng chairman Li Shuirong.
China’s gross domestic product expanded by an annual 6.3 per cent from April to June, after growing by 4.5 per cent in the previous three months, according to the National Bureau of Statistics.
However, the pace of growth in the second quarter missed the 7.1 per cent estimate of economists polled by Bloomberg and the 7.3 per cent forecast of those surveyed by Reuters.
Aramco said in March that construction of a major integrated refinery and petrochemical complex in China would begin in the second quarter of this year.
The project was announced last year and the Huajin Aramco Petrochemical Company is developing the complex that can process 300,000 bpd of oil and a petrochemical plant capable of producing 1.65 million tonnes of ethylene and two million tonnes of paraxylene a year.
Aramco will supply up to 210,000 bpd of crude oil to the plant, which is being built in China’s Liaoning province. It is expected to be fully operational by 2026.
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Teaching your child to save
Pre-school (three - five years)
You can’t yet talk about investing or borrowing, but introduce a “classic” money bank and start putting gifts and allowances away. When the child wants a specific toy, have them save for it and help them track their progress.
Early childhood (six - eight years)
Replace the money bank with three jars labelled ‘saving’, ‘spending’ and ‘sharing’. Have the child divide their allowance into the three jars each week and explain their choices in splitting their pocket money. A guide could be 25 per cent saving, 50 per cent spending, 25 per cent for charity and gift-giving.
Middle childhood (nine - 11 years)
Open a bank savings account and help your child establish a budget and set a savings goal. Introduce the notion of ‘paying yourself first’ by putting away savings as soon as your allowance is paid.
Young teens (12 - 14 years)
Change your child’s allowance from weekly to monthly and help them pinpoint long-range goals such as a trip, so they can start longer-term saving and find new ways to increase their saving.
Teenage (15 - 18 years)
Discuss mutual expectations about university costs and identify what they can help fund and set goals. Don’t pay for everything, so they can experience the pride of contributing.
Young adulthood (19 - 22 years)
Discuss post-graduation plans and future life goals, quantify expenses such as first apartment, work wardrobe, holidays and help them continue to save towards these goals.
* JP Morgan Private Bank
More from Aya Iskandarani
Three tips from La Perle's performers
1 The kind of water athletes drink is important. Gwilym Hooson, a 28-year-old British performer who is currently recovering from knee surgery, found that out when the company was still in Studio City, training for 12 hours a day. “The physio team was like: ‘Why is everyone getting cramps?’ And then they realised we had to add salt and sugar to the water,” he says.
2 A little chocolate is a good thing. “It’s emergency energy,” says Craig Paul Smith, La Perle’s head coach and former Cirque du Soleil performer, gesturing to an almost-empty open box of mini chocolate bars on his desk backstage.
3 Take chances, says Young, who has worked all over the world, including most recently at Dragone’s show in China. “Every time we go out of our comfort zone, we learn a lot about ourselves,” she says.
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
