Page 10 - Downstream Monitor - MEA Week 34

DMEA refining DMEA
Aramco, PetroChina and traders interested in Petrobras refinery sale
middLe east
THE planned privatisation of eight re neries by state-run Brazilian rm Petrobras is attract- ing large state and independent oil and trading rms, including Saudi Aramco.
Sources close to proceedings were quoted by Reuters this week as saying that roughly 20 com- panies had signed non-disclosure agreements (nDAs) and were mulling making an o er, with the first round of non-binding offers due on October 11. e sources noted that signature of the nDA was not indicative that the rms would bid.
State rms Saudi Aramco, PetroChina and Sinopec, both of China, are said to be interested. e latter is already involved in a joint venture (JV) in Brazil with Repsol of Spain. e sources said that traders Vitol, glencore and Tra gura were in the running alongside local rm Ultra- par Participacoes and Raizen, a JV of Brazil’s Cosan and Royal Dutch Shell.
e re neries up for privatisation have a com- bined crude processing capacity of 1.1mn barrels per day (bpd) and industry estimates have said that the sale could earn Petrobras $18bn.
Reuters’ sources noted that the bidding groups were likely to include private pipeline operators, with French rm Engie and Canada’s Brook eld mentioned on account of their recent acquisition of Petrobras’ assets.
Aramco’s possible involvement would t well with the company’s massive downstream growth strategy.
e Saudi rm is aiming to raise global re n- ing capacity to 8-10mn bpd by 2030, with expan- sion focused on major Asian consumers of the kingdom’s crude. Downstream investment pro- jects in China, India, Indonesia, Malaysia and Pakistan are at various stages of execution, while Aramco’s US subsidiary Motiva Enterprises last week signed a deal to acquire the Flint Hills Resources Chemical Plant nearby its Port Arthur Re nery in the US state of Louisiana and the rm is in talks to acquire 20% of India’s Reliance Industries Ltd’s (RIL) oil-to-chemicals business for around $15bn.
Most of Aramco’s current 4.9mn bpd capac- ity is produced through JVs, with around 2-3mn bpd of the total envisaged being converted to petrochemicals, to add to the 17mn tpy of pet- rochemicals already produced.
gross and net refining capacity stood at 4.9mn bpd and 3.1mn bpd respectively at the end of 2018. e two gures were anticipated to increase to 5.6mn bpd and 3.7mn bpd by the end of this year.
Aramco’s owned and affiliated refineries absorbed 38% of the company’s crude last year, providing a signi cant hedge against the oil mar- ket uctuations of the past few years.
Crude supply agreements have been a central feature of the company’s international invest- ment projects, and the prospectus noted that Saudi oil had accounted for 68% of the feedstock absorbed by its international re neries.™
P10
w w w . N E W S B A S E . c o m Week 34 29•August•2019