Saudi Aramco and Total signed a Joint Venture (JV) Agreement to develop a network of fuel and retail services in Saudi Arabia.
The 50:50 JV plans to invest around USD 1 billion over the next 6 years in the Saudi fuel retail market and start providing motorists with premium fuels and retail services in Saudi Arabia.
“Total is proud to be the first international oil major to invest in Saudi Arabia’s fuel retail network. This joint venture agreement is in line with our global strategy to expand in fast-growing markets worldwide.” said Momar Nguer, President Marketing and Services and Executive Committee Member at Total.
He added: “This new agreement is also reaffirming our long-term partnership with Saudi Aramco. Following our joint investments in SATORP refining and petrochemical complex, we are pleased to bring to the Saudi market our expertise and customer-minded approach in retail and contribute to local employment development.”
“I am excited about this major milestone, which will help transform the fuel retail market in the Kingdom. We look forward to working together with our long-term partner Total, and draw on their extensive experience in the fuel retail market,” said Abdulaziz Al-Judaimi, Saudi Aramco senior vice president of Downstream.
He added: “We aim to enhance the quality of services, as well as create thousands of jobs and additional investment opportunities in the Kingdom. This project will also help optimize the total value of our hydrocarbon resources.”
The two companies have also signed an agreement with the owners of Tas’helat Marketing Company (TMC) and Sahel Transport Company (STC) to acquire TMC and STC, thereby jointly acquiring their existing network of 270 service stations and their fuel tanker fleet. Saudi Aramco and Total plan to modernise this network and build high-quality service stations at selected locations.
This operation is subject to prior approval of the competent administrative authorities.
Ahmed Al-Subaey, Vice President of Marketing, Sales, and Supply Planning and Chairman of the Board of RetailCo., said: “This venture will strive to exceed customer’s expectations. We aspire to become the retailer of choice in Saudi Arabia, providing customers with a unique experience and premium offerings. Saudi Aramco is building on its position as the world’s oil powerhouse and international retail experience, coupled with Total’s experience in this field.”
Al-Subaey emphasized that the decision to acquire TMC came after extensive feasibility studies of the local fuel and retail market and its promising opportunities. He added: “Our goal is to provide high-quality services that support the tourism industry in the Kingdom and reflect our country’s progress in developing the infrastructure and a reliable service industry.”
The JV will take a phased approach to expanding its network of domestic fuel retail stations, with a plan to reach the goal of owning and operating hundreds of stations by 2021.