SAUDI'S STRATEGY WORKS
Saudi Aramco is purchasing stakes in refineries in several Asian countries, from Indonesia to Vietnam, with contracts guaranteeing most of the oil will come from the Kingdom. Aramco has invested in three processing facilities in Asia.
As Iran prepares to boost its own exports, the Saudis are on the cusp of a dramatic increase in their commitment to Asia, eyeing billions of dollars of projects in countries from Indonesia to Vietnam.
The Saudis pursued a similar path in the US three decades ago to lock in sales as crude prices tumbled, buying into three oil-processing facilities in Texas and Louisiana since 1988. The strategy worked: Motiva Enterprises LLC, the US refiner half-owned by Aramco, imported 65 million barrels of Saudi oil in the first eight months of 2015 – more than triple what ExxonMobil Corp. got from the Kingdom in that time, US government data show.
In 2004, Aramco bought 15% of a Japanese refinery with a capacity of 395,000 barrels a day, and in 2007 it paid $1.3 billion for a quarter of a refinery in Quanzhou, China, with a capacity of 240,000 barrels. Aramco originally invested in the Korean facility (with a capacity of 670,000 barrels daily) in 1991, and last year paid another $2 billion to increase its stake from 35%. (