Saudi Aramco to acquire Shell’s stake in refining JV for $631m

The Saudi Arabian Oil Company (Saudi Aramco) has signed a $631m agreement to acquire Shell’s 50% stake in the Saudi Aramco Shell Refinery (SASREF) joint venture (JV).

Saudi Aramco will acquire the stake from Shell Saudi Arabia Refining.

Based in Jubail Industrial City, Saudi Arabia, SASREF has a production capacity of 305,000bpd. It started production in 1985 and currently produces liquefied petroleum gas, kerosene, diesel, fuel oil, naphtha and sulphur.

The acquisition is aligned with Saudi Aramco’s Downstream growth strategy, which includes bolstering the capacity of its refineries.

Saudi Aramco Downstream senior vice-president Abdulaziz Al-Judaimi said: “The partnership with Shell has led to a strong record of performance and delivery of refined products.

“Saudi Aramco will take full ownership and integrate the refinery into its growing downstream portfolio. SASREF will continue to be a critical facility in our refining and chemicals business and we look forward to further optimising its performance and long term viability.”

The divestment is a part of Shell’s ongoing effort to focus its refining portfolio.

Shell downstream director John Abbott said: “SASREF has been a long and successful partnership between Shell and Saudi Aramco.

“The refinery has operated with good reliability and has an impressive safety record. We’re proud of what we have achieved together over the past four decades and will continue to explore new business opportunities.”

The deal is subject to regulatory approval and is expected to close later this year.

Saudi Aramco recently signed an agreement to acquire 17% stake in South Korean oil refiner Hyundai Oilbank for $1.25bn.