Saudi Aramco said to be holding talks with Russia’s Sibur on JV

Moscow, Russia - Saudi Arabian Oil Co, the world’s biggest oil exporter, is in talks with Sibur Holding PJSC, Russia’s largest petrochemical producer, about forming a joint venture to make synthetic rubber in the kingdom, according to two people with knowledge of the discussions.

Saudi Aramco, as the stateowned company is known, and Sibur are expected to sign a memorandum of understanding for the project next month when Saudi Arabia’s King Salman bin Abdulaziz al Saud visits Russia, said the people, who asked not to be identified because the talks are private. Talks are at an early stage, they said.

Aramco didn’t immediately respond to requests for comment, while Sibur’s press service declined to comment, referring to comments that the company’s chairman Dmitry Konov made in June about general cooperation talks between the two entities.

The venture would be Saudi Aramco’s first project with a Russian company that didn’t involve energy exploration or production. It conforms with Aramco’s strategy of boosting investments in refining and petrochemicals to reduce its reliance on crude sales. Aramco began earlier this year to fully operate Sadara Chemical Co, a US$20bn venture with Dow Chemical Co, in Jubail, Saudi Arabia. In 2015, Aramco invested in a venture with Germany’s Lanxess AG that makes elastomers, which are used to make golf balls bouncier and chewing gum softer.

King Salman is scheduled to visit Russia on October 4-7 and meet President Vladimir Putin, Prime news service reported last week, citing an unidentified official in Moscow.

Sibur has been expanding in other emerging markets since 2011, when the company reached an agreement with China Petroleum & Chemical Corp, also known as Sinopec, to set up two rubber joint ventures.

Saudi Aramco and Sibur are expected to sign a MOU for the project next month