Saudi Aramco to acquire 10% of Rongsheng Petrochemical to expand its presence in China

On March 27, 2023, Rongsheng Petrochemical Co., Ltd. reached a strategic cooperation with Saudi Aramco, one of the world's leading integrated energy and chemical companies, and signed a number of agreements, including Saudi Aramco The acquisition agreement to acquire 10% of Rongsheng Petrochemical for RMB 24.6 billion, as well as a number of business cooperation framework agreements on raw materials, refined oil, chemical products, crude oil storage and technology sharing. The achievement of this strategic cooperation will vigorously expand the relevant business of both parties in the petrochemical field.

Through this strategic arrangement, Aramco Overseas Corporation, a wholly-owned subsidiary of Saudi Aramco, will acquire a portion of Rongsheng Petrochemical's shares. At the same time, Rongsheng Petrochemical and its subsidiaries will carry out all-round consultation and cooperation with Saudi Aramco and Aramco Trading Singapore ("ATS") in the fields of raw materials, refined oil, chemical products, crude oil storage and technology sharing. Based on a signed long-term sales agreement, Saudi Aramco will supply 480000 barrels of Arabian crude oil per day to Rongsheng Petrochemical's Zhejiang Petrochemical Co., Ltd.

Mohammed Y.Al Qahtani, Executive Vice President of Saudi Aramco Downstream, said: "This launch demonstrates Saudi Aramco's commitment to long-term cooperation with China and its confidence in the Chinese petrochemical industry. This is a major acquisition in a key market for Saudi Aramco, supporting the company's belief in growing and expanding and advancing its liquid chemicals strategy. It also promises a reliable supply of crude oil to Zhejiang Petrochemical, one of China's most important refiners."

Li Shuirong, chairman of Rongsheng Petrochemical, said in his speech: "Today's strategic cooperation is the sublimation of the long-term friendship and trust between the two sides, which can promote the better implementation of each other's enterprise development strategies, and thus will certainly create a new future for the high-quality development of the world petrochemical industry."

Rongsheng Petrochemical is one of the leading private petrochemical enterprises in China, with a 51% stake in Zhejiang Petrochemical, and Zhejiang Petrochemical's refining and chemical integration project is the world's largest investment in a single industry project, which can process 800000 barrels of crude oil per day.

The conclusion of this cooperation will further consolidate the bond between Saudi Aramco and Rongsheng Petrochemical and the competitive advantages of both parties in the petrochemical field.

Source: Rongsheng Petrochemical

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