Adnoc Distribution, the UAE’s largest fuel and convenience retailer, agreed a deal to acquire 15 fuel service stations in Saudi Arabia.
The company will spend $10 million on the stations as part of its first phase of expansion plans in the Arab world's largest economy, it said in a statement to the Abu Dhabi Securities Exchange on Thursday.
“Expanding our presence in Saudi Arabia is an important milestone for our company and part of our profitable growth strategy,” Ahmed Al Shamsi, acting chief executive of Adnoc Distribution, said. “We see this expansion as a natural progression since opening our first station in 2018 and look forward to significantly increasing our presence in the coming years.”
The company currently owns two stations in the kingdom – one on the Riyadh-Dammam highway and another in the city of Hofuf within the Al Ahsa Governorate.
The company is also “in discussions on a range of opportunities” to grow its footprint in the kingdom, he said.
“Saudi Arabia is the largest market in the GCC and there is huge potential for experienced fuel operators like us to consolidate the market and capture further growth,” Mr Al Shamsi added.
The new stations are based in the eastern region of the country and offer both fuel and retail services to customers, according to the company.
In the UAE, the company has been expanding its network and currently operates more than 420 service stations in all seven emirates. It opened its 20th station in Dubai last month, where it has more than tripled its footprint in the emirate, from just six stations at the start of the year.
It is also aiming to expand into Egypt, the Arab world’s most populous country.
Saudi Arabia is aiming to attract foreign direct investment to diversify its economy as part of its Vision 2030 programme. Earlier this month, the kingdom's Ministry of Investment reported a 21 per cent year-on-year jump in foreign investor licences in the third quarter as the country reopens its economy following Covid-19 restrictions. It issued 306 new investor licences during the period with India, Egypt and the UK being the top sources of new foreign projects.