Saudi Aramco to buy 40% stake in Gas & Oil Pakistan

Agreement marks Saudi company's entry into the South Asian country's fuel retail market

In November, Aramco reported a 23 per cent drop in third-quarter net profit amid the kingdom's voluntary production cuts and a fall in crude prices. Reuters
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Saudi Aramco, the world's largest oil-producing company, has agreed to acquire a 40 per cent equity stake in Gas & Oil Pakistan (GO), a downstream fuels, lubricants and convenience store operator.

The value of the transaction was not disclosed.

The agreement marks Aramco’s entry into Pakistan’s fuel retail market, "advancing the company’s strategy to strengthen its downstream value chain internationally", Aramco said in a statement on Tuesday.

The deal will allow Aramco to secure additional outlets for its refined products, it added.

It will also offer new market opportunities for Valvoline-branded lubricants, following Aramco’s acquisition of the US motor oil and lubricant maker's global products business in February.

“GO has a significant storage capacity, high-quality assets and growth potential, which will help launch the Aramco brand in Pakistan,” said Mohammed Al Qahtani, Aramco's downstream president.

“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."

The transaction is subject to certain customary conditions, including regulatory approval, Aramco said.

GO is one of the largest retail and storage companies in Pakistan. It has a network of more than 1,100 outlets in Pakistan providing petrol, diesel and lubricants.

Aramco is the third most valuable company in the world, with a market value of $2.12 trillion, behind Microsoft ($2.76 trillion) and Apple ($3 trillion) as of Tuesday. The company has been acquiring assets globally to strengthen its portfolio and expand into new markets.

This year, it completed its acquisition of Valvoline's global products business for $2.65 billion.

In September, the company said it was buying a 100 per cent equity stake in Esmax Distribuscion, a downstream fuels and lubricants retailer in Chile, from private equity company Southern Cross Group.

Last month, Aramco reported a 23 per cent drop in third-quarter net profit amid the kingdom's voluntary production cuts and a fall in crude prices.

Net profit after zakat for the three-month period to the end of September fell to 122.2 billion Saudi riyals ($32.58 billion), from 159 billion riyals in the same period in the previous year, the state oil company said in a filing to the Tadawul stock exchange, where its shares are traded.

Updated: December 12, 2023, 2:30 PM