Saudi Aramco is one of the leading integrated energy and chemicals companies. It recently signed a cooperation framework agreement with Chinese refiner Jiangsu Eastern Shenghong to engage in further discussions towards Aramco potentially purchasing a strategic 10 percent equity in Shenghong Petrochemical, a wholly-owned subsidiary of Eastern Shenghong.
Shenghong Petrochemical owns and operates a 320 million barrels per day (MBD) integrated refinery and petrochemicals complex. It is a methanol-to-olefins and derivatives complex as well as a purified terephthalic acid production facility through its wholly-owned subsidiaries.
Under the deal, Aramco would supply Shenghong Petrochemical with crude oil and potentially other feedstocks. The two intend to cooperate on the development of a large expansion project, subject to further discussions.
Mohammed Y Al Qahtani, Aramco Downstream President, said: “The signing of this cooperation framework agreement is another significant milestone in Aramco’s Downstream strategy to increase conversion of Arabian crude oil to chemicals and to expand into the critically important Chinese market. We see China as an important partner not only for today but for decades to come.”
Read: Saudi’s Aramco pondering selling more shares before end of 2023
Aramco financials
Saudi Aramco revealed profits in the three months to the end of June up 90 percent to $48 billion, one if the largest quarterly profits in history, easily beating the nearly $26 bn it made a year earlier, thanks to soaring energy prices.
The world’s biggest oil company is 95 percent owned by the Saudi government. The kingdom will rake the bulk of $18.8 bn in dividends set to be distributed by end October.
Aramco has shares listed on Riyadh’s stock exchange since December 2019.
The company has a low cost of production, given that much of its oil is sourced from easy-to-tap fields onshore or in shallow waters, helping to boost profitability.
Brent crude prices were at $95 at the time of publishing.
Soaring demand for oil has also contributed to huge profits for Shell which last month made nearly £10bn in profits between April and June. BP’s profits tripled to almost £7bn in the second quarter.
Amin Nasser, the president and chief executive of Aramco, hinted that profits could continue to grow because of high demand.
“We expect oil demand to continue to grow for the rest of the decade despite downward economic pressures on short-term global forecasts,” he said.
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