Page 17 - DMEA Week 38

DMEA PETROCHEMICALS DMEA

Saudi petchem firms mull $9.4bn merger

SAUDI ARABIA TWO Saudi petrochemical firms are consider- and combining the pair would form a company
ing a merger after sustaining heavy losses, raising with around $9.4bn in assets, based on their cur-
There have been a the prospect of further consolidation of the king- rent share prices.
series of mergers and dom’s downstream industry. Petrochem has two subsidiaries, Saudi Pol-
acquisitions in Saudi Saudi Industrial Investment Group (SIIG) ymers and Gulf Polymers Distribution, both
Arabia’s petrochemicals said on September 20 that its board of direc- of which are 65% owned. Saudi Polymers pro-
sector in recent years. tors had approved initial talks on a tie-up with duces up to 1.2mn tonnes per year of ethylene
National Petroleum Co. (Petrochem). No agree- and 440,000 tpy of propylene.
ment has been reached and it is yet to be decided There have been a series of mergers and
what structure the deal might take, SIIG said in a acquisitions in Saudi Arabia’s petrochemicals
filing on the Saudi Stock Exchange. sector in recent years, as players look to lower
“It should be noted that entering into this costs and develop greater clout through integra-
study does not necessarily mean that the deal tion. Diversified petrochemicals manufacturer
will take place between the two parties,” the Sipchem combined with polypropylene supplier
company noted. “If the deal is agreed upon, this Sahara Petrochemicals last year. And state oil
will be subjected to the conditions and approvals giant Saudi Aramco closed the $70bn purchase
of the competent authorities, and the approval of a 70% stake in petrochemicals giant SABIC in
of the extraordinary general assembly of both June from the state.
companies.” Conditions on the global petrochemicals
SIIG suffered a 18.5% decline in revenues in market were bearish even before the coronavirus
the three months ending June 30, and it racked (COVID-19) pandemic, owing to weak demand
up SAR55mn ($14.7mn) in net losses. Petro- in Asia and increased supply. SABIC suffered its
chem, on the other hand, booked a SAR139mn third quarterly loss in a row in April-June, and
loss in the first half of the year. has warned that the second half of the year will
SIIG already owns a 50% stake in Petrochem, likely be as gruelling as the first. ™

FUELS

Nigerian fuel shortages loom

as key roads closed

NIGERIA THERE is a risk of fuel shortages in northern leaders, we have to do the necessary and protect
Nigeria, following the shutdown of key road the lives of our members from avoidable acci-
Drivers say the links used to bring fuel imports to the region dents and attacks from hoodlums,” the union
alternative route is too from the south. said. “So starting September 17, our members
dangerous. The Niger State government stopped fuel will not be lifting products from Lagos to the
tankers and other heavy vehicles from using link northern part of the country.”
roads in the province’s Minna area on September Operations will not resume until the Bida-
15, the Petroleum Tanker Drivers (PTD) union Agai-Lapai-Lambata road is made usable or
said in a statement. This step was taken so that Minna roads re-open, it said.
repair work on the roads could be done faster. Niger State authorities responded to the
The PTD has subsequently halted the supply halting of fuel shipments saying that it was the
of fuel from the port of Lagos through Niger federal government’s job to repair Bida-Agai-
State to Nigeria’s north. The union explained Lapai-Lambata, as it is a federal road. The
that the only alternative road, Bida-Agai-Lap- roads the local administration closed in Minna
ai-Lambata, was not suitable for motor vehicles, belonged to the state, and it was acting within
describing it as a “death trap.” the law to do so.
Union leaders got wind of the Niger State “We are affirming our position: There is no
government’s plan weeks ago and urged author- going back on the state government’s decision on
ities to fix the poorly maintained Bida-Agai-Lap- the ban on articulated trucks from playing the
ai-Lambata route. They got assurances that this state-owned roads,” Ibrahim Balarabe, the chief
would be done, the PTD said. of state of the Niger State governor, told report-
“Unfortunately, over two weeks after our dis- ers. “We will stand on our position and we will
cussion nothing has been done on the road. As not relent on that.” ™

Week 38 24•September•2020 www. NEWSBASE .com P17