Arab News Japan

Saudi Arabia’s Aramco on Thursday announced its strategic downstream expansion with the acquisition of an additional 22.5 percent stake in Rabigh Refining and Petrochemical Company (Petro Rabigh) from Japan’s Sumitomo Chemical Corporation for $702 million.

Aramco is now Petro Rabigh’s largest shareholder with an equity stake of approximately 60 percent, while Sumitomo retains an equity stake of 15 percent.

According to a statement from Aramco, the transaction reflects the company’s commitment to its partners and affiliates, as it forges ahead with a downstream strategy that promotes value creation, business integration and portfolio diversification.

The transaction also enhances Aramco’s ability to support the transformation program underway at Petro Rabigh, which includes targeted asset upgrades to improve the yield of high-margin products and enhance plant reliability. 

Aramco’s Senior Vice President of Fuels Hussain A. Al Qahtani said that Petro Rabigh is a “key player in the Kingdom’s downstream sector.”

“This additional investment by Aramco reflects strong belief in its long-term prospects. It also underscores Aramco’s focus on downstream expansion and value creation,” he added.

Aramco and Sumitomo agreed last year to inject a total of $1.4 billion to partly prepay Petro Rabigh’s debt, supporting its future growth opportunities and strengthening its balance sheet.

This injection will involve the innovative issuance by Petro Rabigh of Class B shares, which will be fully subscribed to by Aramco and Sumitomo, according to the Saudi company.

Through the Class B share issuance, Aramco and Sumitomo will be able to inject fresh capital without altering Petro Rabigh’s existing governance structure or diluting the voting power of Petro Rabigh’s other shareholders.   

As part of the transaction, Aramco and Sumitomo have also waived a total of $1.5 billion in shareholder loans to Petro Rabigh, completed in two phases in August 2024 and January 2025, improving its capital structure and partially remediating its accumulated losses.