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Saudi Aramco looks to further bolster its downstream presence in the world’s top crude oil importer, China, the oil giant’s Downstream President, Mohammed Al Qahtani, has said.
“China is strategically important to our business growth in Asia and worldwide, and we will remain a reliable source of long-term oil supply,” Al Qahtani was quoted as saying by China Daily.
Oil product demand in China has seen a robust recovery, the Saudi executive said, reiterating Aramco’s view that China will drive global oil demand growth and is of strategic importance to the world’s largest crude oil exporter, Saudi Arabia.
“For example, more than half of the world's oil demand growth this year could come from China alone,” Al Qahtani said, echoing views of the International Energy Agency (IEA) and other forecasters that expect Chinese demand growth to account for around 70% of global oil demand increase in 2023.
The long-term prospects on the Chinese market are also favorable for Saudi Aramco, which is looking to further expand its downstream business in China and lock in future term supply contracts with the top global oil importer.
Just last month, Saudi Aramco completed the purchase of a 10% stake in a Chinese petrochemical firm for the equivalent of $3.4 billion as the Saudi oil giant continues to expand its downstream footprint in one of its key export markets. Aramco successfully closed the acquisition of a 10% interest in Rongsheng Petrochemical Co Ltd.
Saudi Aramco announced earlier this year two major refinery and petrochemical deals in China, which not only give the world’s largest oil firm a share of the Chinese downstream market but also an additional export outlet for 690,000 barrels per day (bpd) of Saudi crude in China.
A Saudi Aramco joint venture plans to build a $10-billion refining and petrochemical complex in China over the next three years, while Aramco has now completed the acquisition of 10% in Rongsheng Petrochemical and will supply 480,000 bpd of Arabian crude oil to Rongsheng affiliate Zhejiang Petroleum and Chemical Co. Ltd (ZPC), under a long-term sales agreement.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.