Aramco seeks 10% stake in Hengli Petrochemical amid China expansion
Saudi Aramco, the world’s largest oil-producing company, has signed an agreement with China’s Hengli Group to initiate discussions for the purchase of a 10 per cent stake in its petrochemicals subsidiary.
The acquisition of Hengli Petrochemical stake, which is subject to regulatory clearance, will strengthen Aramco’s investments in China.
It aligns with the company’s strategy to expand its downstream presence in high-value markets, Aramco said.
Mohammed Al Qahtani, Aramco’s downstream president, said the state-owned company continues to explore “new opportunities in important markets”.
Hengli Petrochemical owns and operates a 400,000-barrel-per-day refinery and integrated chemicals complex in China’s Liaoning province.
It also operates several plants and production complexes in Jiangsu and Guangdong provinces.
Aramco has been expanding its presence in vital markets globally and bolstering its downstream operations.
In October last year, it signed an agreement with three Chinese organisations amid plans to buy a 10 per cent stake in Shandong Yulong Petrochemical.
In September, it started preliminary discussions with Jiangsu Eastern Shenghong, to acquire a 10 per cent equity stake in the company’s petrochemicals subsidiary.
In July, it closed a deal to buy a 10 per cent stake in Shenzhen-listed Rongsheng Petrochemical for $3.4 billion.
In 2023, Aramco increased its dividend by 30 per cent despite a decline in annual net profit due to lower oil prices and the effect of output cuts.
The company’s dividends for the year rose to $97.8 billion while net profit hit $121.3 billion, compared with a record $161.1 billion in 2022.
Revenue last year fell by more than 17 per cent to $440.88 billion. Capital investments reached $49.7 billion, up 28 per cent annually.
Earlier this year, Saudi Arabia transferred an 8 per cent stake in Aramco to the kingdom’s sovereign wealth fund, the Public Investment Fund.
After the transfer, the kingdom remains Aramco’s largest shareholder, retaining about 82 per cent in equity.