Beijing, 26 April 2024 (GNP): Saudi Aramco has recently heightened its focus on the Chinese market and allocated substantial energy resources to the world’s second-largest economy.
One of Aramco’s strategies include strengthening ties with a vital energy client. Its current negotiations to pay $15 billion for a 10% stake in Hengli Petrochemical show that the company is committed to diversifying its international investment holdings.
This move aligns with Aramco’s larger objective to strengthen its market dominance throughout the energy value chain, especially in key regions like Asia.
Moreover, it happens at a time when Saudi Arabia is attempting to bolster its standing following Russia’s emergence as China’s primary oil supplier last year.
Aramco has invested in Hengli Petrochemical and has undertaken several other initiatives in China recently.
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A similar purchase was executed by the corporation in July when it paid 24.6 billion yuan (about $3.4 billion) to acquire a 10% share in Rongsheng.
The 88% premium paid for this acquisition above Rongsheng’s undisturbed market value made it noteworthy.
In addition to these deals, Aramco is looking at potential partnerships with Chinese refiners and pursuing cooperative venture capital and emissions reduction initiatives.
These investments are significant from China’s point of view because they show that the nation still attracts international capital despite a general fall in foreign direct investment.
Foreign direct investment in 2023 was recorded at 1.13 trillion yuan ($155.9 billion) by the Ministry of Commerce, a decrease of 8% from the year before and the first in more than ten years.
Aramco’s chemical arm SABIC has demonstrated the breadth of its engagement with the Chinese market by investing over $20 billion in numerous crude-to-chemical projects in China as part of a larger strategy.
