Saudi Aramco sets up fuel retail subsidiary as part of downstream business push
Saudi Aramco Retail Company will sell automotive fuel at its own domestic network of petrol stations
State-controlled Saudi Aramco has formed a fuel retailing unit through which the world’s top oil exporting company will create a network of petrol stations in the Arab World’s biggest economy as it looks to expand its downstream business.
The new wholly-owned subsidiary, Saudi Aramco Retail Company (RetailCo), will sell automotive fuel at its own network of petrol stations in a move that will open up a “new and stable” source of revenues for the national oil company, Aramco said yesterday. It did not provide a timeline, size or the value of the investment into the network.
“Integrating fully across the hydrocarbon value chain is key to capturing maximum value from our resources,” said Abdulaziz Al Judaimi, Aramco’s senior vice president of downstream.
“It will leverage synergies in our business model and position us to actively participate in the customer-facing segment of the downstream value chain.”
The move is part of Aramco’s overall strategy of further enhancing its crude production, increase its refining capacity and invest in its consumer-facing business.
Downstream is an industry term that refers to purifying oil extracted from the ground into crude grades that can be sold to oil markets.
Refineries separate unwanted elements such as sulphur and products including gasoline, petrol, kerosene, jet fuel as well as hundreds of petrochemicals, which are then marketed and distributed to the consumers.
RetailCo’s will take a “phased approach” to expand its network of domestic fuel retail stations to cover the kingdom, Saudi Aramco said.
The formation of the new unit is the start of a series of initiatives and deals for RetailCo to become a “full-fledged” fuel retail segment of Aramco, the company said.
Aramco is increasingly pivoting to grow its downstream business to reduce the risk of a slowdown in the demand for oil in the global markets.
The oil major has signed several deals in refining and petrochemicals sectors to secure new markets for its crude, expanding its footprint globally and boosting the capacity of its plants.
The move to sell fuel directly at its own network of domestic stations will allow Aramco to cater directly to consumers as part of the kingdom’s Vision 2030 programme to improve citizens’ standard of living, the company said.
Updated: December 26, 2018 08:41 PM