Page 4 - DMEA Week 13 2022

DMEA COMMENTARY DMEA

Saudi chemicals deals

penned following

Aramco announcement

Saudi Arabia is working to develop its chemicals capabilities as its state oil
giant doubles down on its downstream expansion with crude-to-chemicals.

MIDDLE EAST TWO deals were announced in Saudi Arabia this a joint venture (JV) with state-owned Saudi
week that illustrate Riyadh’s intention of leverag- Arabian Industrial Investments Co. (Dussur)
ing upstream production to garner greater value that will provide oilfield services and industrial
WHAT: in the downstream. chemicals.
Deals were signed this While the agreements themselves are not The American firm will take a 51% stake in
week for a new industrial huge, they underline the recent trend towards the new unit, with the deal expected to close
chemicals JV and a downstream diversification through industrial during Q3 this year. Its partner Dussur is owned
pipeline to supply the chemicals and come just a week after majority by Aramco, SABIC and the Public Investment
Kingdom’s new speciality state-owned Saudi Aramco announced a long- Fund (PIF).
chemicals facility. term goal of achieving 4mn barrels per day (bpd) The JV, for which a name has not yet been
of liquids-to-chemicals capacity, without provid- announced, will launch a chemicals manufac-
WHY: ing a timeline. The company is also working to turing facility at the downstream hub of Jubail
Riyadh’s focus remains integrate the operations of Saudi Basic Industries Industrial City in the oil-rich Eastern Province
firmly set on leveraging Corp. (SABIC), the world’s fourth-largest chem- and will operate under Baker Hughes’ branding
its vast hydrocarbon icals company, following the oil giant’s acquisi- In 2020, it formed the Novel JV with Aramco
wealth to aid its tion of a 70% stake for just over $69bn. for the development of non-metallic products
economic diversification In its 2021 full-year results presentation, Ara- and in October last year, the US company broke
through chemicals and mco said it envisages synergies of $3-4bn by 2025 ground on its new regional oilfield services hub
speciality products. from the SABIC integration as the company at the King Salman Energy Park (SPARK), also
focuses on deeper control of the value chain. in Eastern Province.
WHAT NEXT: Baker Hughes said that the 300,000-square
Chemicals margins Baker Hughes metre facility would support the company’s oil-
improved in 2021 and On the back of commitments to the localisa- field service operations and customers through-
Saudi state-backed tion of its regional operations and deals signed out the Middle East. More than 600 employees
companies can anticipate with Aramco for new facilities, US-based will be based there, 70% of which will be Saudi
more of the same in 2022 Baker Hughes announced the formation of nationals, with 120 of the jobs to be newly
as demand continues
to grow while feedstock
availability improves.

P4 www. NEWSBASE .com Week 13 31•March•2022