Saudi Aramco, SABIC deny plans to merge petrochems

National oil giant Saudi Aramco and Saudi Basic Industries Corp denied on Saturday they had any plans to merge their petrochemicals businesses after media reports on the possibility.

“The companies wish to clarify that they have no plans to pursue this option,” they said in a joint statement.

“Both companies will continue to explore mutually beneficial opportunities to work together as partners and contribute to the continued growth and diversification of the kingdom’s economy.”

Aramco is currently finalising proposals for its partial privatisation and will present them to its Supreme Council soon, its chief executive recently said about the centrepiece of the kingdom’s efforts to overhaul its economy.

The company has a huge team working on the options for the initial public offering (IPO) of less than 5 per cent of its value, which include a single domestic listing and a dual listing with a foreign market, CEO Amin Nasser said earlier this month.

They will be presented “soon” to Aramco’s Supreme Council, headed by Deputy Crown Prince Mohammed bin Salman, who is leading an economic reform drive to address falling oil revenue and sharp fiscal deficits by boosting the private sector, ending government waste and diversifying the economy.

Nasser stressed that even after the listing, the Saudi government would retain sole control over Aramco’s oil and gas output levels. “Production is sovereign,” he said.

Riyadh has traditionally kept an expensive “spare cushion” of excess production capacity, allowing it to raise or reduce levels to influence prices according to the government’s market strategy. Private oil companies, by contrast, do not hold back output for strategic gain.

Nasser also said Aramco was seeking to expand globally via joint ventures in Asia and North America.

“We are looking at the current market status that, even though challenging, is an excellent opportunity for growth,” Nasser said, adding that he was looking at opportunities in the United States, India, Indonesia, Vietnam and China.

Read: Saudi Aramco prepares for global expansion as IPO looms