Page 12 - DMEA Week 08 2020

DMEA PETROCHEMICALS DMEA
Aramco-SABIC deal set for EU approval
SAUDI ARABIA
Aramco’s annual petrochemical capacity will rise from 17mn to 89mn tonnes.
SAUDI oil giant Saudi Aramco is reportedly set to gain unconditional clearance from EU regula- tors to proceed with its $69bn takeover of petro- chemical producer Saudi Basic Industries Corp. (SABIC).
Aramco struck a deal to buy 70% of SABIC from the Saudi Public Investment Fund in March last year. The takeover is aimed at consolidating the country’s petrochemical sector in order to cut costs and unlock synergies.
Sources told Reuters last week that the Euro- pean Commission would be signing off on the deal without demanding concessions, such as asset divestments. EU antitrust regulators were expected to announce their decision by Febru- ary 27. Competition watchdogs in India and a number of other countries have similarly given unconditional support already.
SABIC operates in more than 50 countries and has over 34,000 employees. It is the world’s biggest petrochemicals group by sales. It is the largest producer of ethylene in Europe, with plants in Germany, the Netherlands and Ire- land. At its Saudi facilities, SABIC uses natural
gas supplied from Aramco at prices well below market rates as feedstock, giving it a competitive edge.
By acquiring the firm, Saudi Aramco will expand its annual petrochemicals produc- tion capacity from a mere 17mn tonnes at present to 89mn tonnes. Fresh from raising a record $29.4bn from an initial public offering (IPO) late last year, Aramco wants to invest in expanding its refining and petrochemical operations, helping to reduce dependency on crude oil sales. As part of this plan it has also increased exploration for gas, with the aim of eventually producing a surplus that could be exported.
Aramco has not disclosed when it expects to close the acquisition of SABIC, beyond at some point this year.
The takeover comes at a time when the global market for petrochemicals is reeling from over- supply and a rut in economic growth. SABIC notably posted its first quarterly loss in more than a decade in October through December, on weak prices and write-downs. ™
FUELS
Fuel shortages persist in parts of Sudan
SUDAN
Diesel is fetching four times the official price on the black market.
SHORTAGES of motor fuel seem to have eased in Khartoum and surrounding areas, but sup- plies remain scarce in the north-eastern and south-western regions of Sudan.
In the south-west, the states of Northern Darfur and Southern Darfur are both report- ing shortfalls of gasoline and diesel, according to Radio Dabanga. Residents of Kutum, a town in Northern Darfur, said last week that many drivers were buying fuel on the black mar- ket, since filling stations were unable to meet demand.
Diesel is fetching four times the official price on the black market, while gasoline is selling for 12 times the normal rate, said Yahya El Khims, a member of the Sudanese Professionals Associa- tion (SPA) in Kutum. The price hikes have driven transportation costs up, and complaints about the shortages and high prices are widespread, he told the radio station.
Meanwhile in Northern Darfur, demon- strators gathered in front of local government buildings in Saraf Umra to protest about ongo- ing problems with fuel supplies. Members of resistance committees and the Forces for
Freedom and Change (FFC) group blamed the local administration for the shortages and called for the dismissal of the government offi- cials involved in distribution. Additionally, they complained that local farmers had not received their fair share of fuel in recent distribution campaigns.
In the north-east, motor fuel continued to be in short supply in the states of Kassala and Red Sea. In the latter state, drivers and motorcy- clists were forced to queue up for miles, as filling stations in the towns of Suakin and Port Sudan did not have enough gasoline or diesel to meet demand.
In Kassala, fuel shortages led the local arm of the General Transportation Union (GTU) to stage a strike that led to the shutdown of all forms of public transport over the weekend. Union members staged the work stoppage in a bid to force local authorities to raise ticket prices, arguing that this move was necessary because of the difficulty of obtaining adequate fuel.
As of press time, no word was available on the central government’s response to continued shortages and protests outside Khartoum. ™
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w w w . N E W S B A S E . c o m Week 08 28•February•2020