(CTN News) – The long-term efforts of Aramco to expand its integrated refining and petrochemical operations mark an historic milestone in its efforts to expand its integrated refining and petrochemical operations through the terms of the agreements.
There has been the successful closing of three landmark transactions by Saudi Arabian Oil Company (Aramco), one of the largest integrated energy and chemical companies in the world, through its subsidiary, Aramco Overseas Company BV, based in the Netherlands, with Polish refiner and fuel retailer PKN Orlen.
As part of the transaction, first announced in January 2022, the company acquired equity stakes of 30% in a 210,000 barrel-per-day refinery in Gdansk; 100% in an associated wholesale business; and 50% in a joint venture with BP Europa SE for the marketing of plane fuel in Poland, which operates at seven airports in Poland as a result of PKN Orlen’s merger with Grupa Lotos.
According to the Saudi company, the agreement represents a significant milestone in Aramco’s long-term strategy to expand its integrated refining and petrochemical capacity as well as expand its product portfolio across the entire hydrocarbon value chain, which is part of its long-term strategic plan.
This transaction will also lay the foundation for further business development. It is meant to complement Aramco’s plans to increase its liquids to chemicals capacity to up to 4 million barrels per day, according to the company.
As the Senior Vice President of Downstream at Aramco, Mohammed Y Al Qahtani, said: “These investments are part of our efforts towards cementing the presence of Aramco in a key European market, while also providing us with the opportunity to develop more advanced pathways from liquids to chemicals, which will allow Aramco to expand its downstream footprint and diversify its portfolio while expanding our global downstream footprint.
Meanwhile, we aim to continue developing our product portfolio through our ongoing downstream transformation strategy in order to further strengthen our product portfolio.”
It was stated by Daniel Obajtek, the Chairman of the Management Board of PKN Orlen, that these transactions were of strategic significance.
This was in order to further strengthen energy supplies not only in Poland, but throughout the entire region. As one of the largest companies in Central Europe, we have built a diversified portfolio of assets. Through this portfolio, we will be able to successfully strengthen and develop our current business lines, as well as develop new ones..
As a result, we are able to take advantage of these new growth opportunities to continue to expand our product range and continue to maintain high margins.”
Aramco has also entered into a crude oil sales agreement with PKN Orlen through which Aramco will be supplying approximately 45% of PKN Orlen crude oil requirements in the near future.
The three companies have also signed a joint development agreement for the assessment of the technical and economic feasibility of a potential petrochemical project in the Polish city of Gdansk in addition to the investments.
What does the Aramco do?
Saudi Aramco is the world’s largest oil producer. Officially known as Saudi Arabian Oil Company, the company is primarily state-owned and is based in Dhahran, Saudi Arabia.
It is the world’s most profitable company, eclipsing even tech giants such as Apple (AAPL) and Alphabet’s Google (GOOGL).