Top Global Oil Producer to Strengthen its Presence in China
Saudi Aramco, the world's largest oil producer, aims to strengthen ties with its Chinese partner by increasing investment and expanding its presence in China's energy market
Explore the impact of China's rise on the world by signing up for CNN's Meanwhile in China newsletter. Saudi energy giant Aramco, the world's largest integrated oil and gas company, is preparing to increase its investment in its Chinese partner as it expands in the country.
Aramco is currently in discussions with Rongsheng Petrochemical regarding the potential acquisition of up to a 50% stake in its subsidiary, Ningbo Chongjin Petrochemical, as stated in a filing to the Shenzhen Stock Exchange on Wednesday. Additionally, Rongsheng, a privately-owned refiner based in Hangzhou, has expressed interest in the possibility of acquiring a 50% stake in Saudi Aramco Jubail Refinery Company, the refining unit of the Saudi company, based on a memorandum of understanding signed by both parties the previous day.
The companies may collaborate to enhance and broaden the Chinese subsidiary's equipment and construct the extensive Rongsheng New Materials (Zhoushan) project, as per Rongsheng. This project will manufacture high-performance petrochemicals, including engineering plastics, special polyesters, and high-end resins for use in electronic devices and semiconductors.
Saudi Arabia has greatly enhanced its energy relationship with China in the past year. In March, Aramco reached an agreement to acquire a 10% share in Rongsheng for 24.6 billion yuan ($3.5 billion) and committed to providing 480,000 barrels per day of crude oil to the Chinese company as part of the deal.
China has also aimed to expand its influence in the Middle East nation. Sinopec, a state-owned refining company, has partnered with Aramco to run a refinery project in Yanbu Industrial City, Saudi Arabia. The Yanbu Aramco Sinopec Refining Company, operational since 2016, utilizes 400,000 barrels of Arabian heavy crude oil per day to create high-quality transportation fuels, as stated by the company.
In an investment conference last month, Hong Kong warmly welcomed Saudi elites. During a visit to Riyadh in February 2023, the city's chief executive, John Lee, met with Aramco's CEO and proposed a secondary listing in Hong Kong, as per a government statement. Aramco had previously gone public in Riyadh in 2019, setting a record for the biggest IPO at the time.
