Week 13 in Review: Big deals, big news out of China top the week that was
Aramco president and CEO Amin Nasser spoke about the company’s commitment to working with China on all major energy issues, and then the company announced actions to back that up.
Aramco president and CEO spoke at the China Development Forum this week, emphasizing the company’s commitment to the country’s long-term energy security and high quality development on a number of issues.
In conjunction with his visit, Aramco announced an agreement to acquire a 10% interest in Rongsheng Petrochemical Ltd. for about $3.6 billion, greatly expanding Aramco’s presence in China.
And a few days later, company officials also attended a groundbreaking ceremony for a major integrated refinery and petrochemical complex being developed by joint venture Huajin Aramco Petrochemical Company (HAPCO).
Here’s a look at the past week’s major headlines.
China’s long-term energy security and “high quality” development are among Aramco’s top priorities, president and CEO Amin Nasser has affirmed.
Nasser was speaking in Beijing at the China Development Forum (CDF) in-person for the first time in four years, due to the COVID-19 pandemic. The theme of this year’s forum was “Economic Recovery: Opportunities and Cooperation.”
In a wide ranging address, he spoke of the alignment in thinking between the company and Chinese president HE Xi Jinping on the energy transition.
Nasser welcomed what he described as the president’s “pragmatic thoughts” in the face of the challenges of ongoing conflict in Europe, global economic headwinds, and an energy crisis.
“We agree with his (President Xi’s) view that conventional energy sources and alternatives will have to work in parallel for decades to come,” said Nasser. “We also agree that China cannot achieve its climate change mitigation goals at the expense of energy security. And his principle of ‘building the new before discarding the old’ really struck a chord with us.”
Aramco has signed definitive agreements to acquire a 10% interest in Shenzhen-listed Rongsheng Petrochemical Co. Ltd. (“Rongsheng”) for RMB 24.6 billion ($3.6 billion at current exchange rates) in a deal that would significantly expand its downstream presence in China.
Through the strategic arrangement, Aramco would supply 480,000 barrels per day (bpd) of Arabian crude oil to Rongsheng affiliate Zhejiang Petroleum and Chemical Co. Ltd (ZPC), under a long-term sales agreement. Aramco Overseas Company (“AOC”), a wholly-owned subsidiary of Aramco, will acquire the interest in Rongsheng.
Among other assets, Rongsheng owns a 51% equity interest in ZPC, which in turn owns and operates the largest integrated refining and chemicals complex in China with a capacity to process 800,000 bpd of crude oil and to produce 4.2 million metric tons of ethylene per year.
Three days after announcing it, a groundbreaking ceremony took place Wednesday, March 29, for a major integrated refinery and petrochemical complex being developed by Huajin Aramco Petrochemical Company (HAPCO).
The joint venture between Aramco (30%), NORINCO Group (51%) and Panjin Xincheng Industrial Group (19%) is developing the complex in the city of Panjin, in China’s Liaoning Province.
On March 26, it was announced that the complex was expected to be fully operational by 2026. Aramco is expected to supply up to 210,000 barrels per day (bpd) of crude oil feedstock to the facility.
Combined, the partnership with Rongsheng and the HAPCO joint venture would see Aramco supply a total of 690,000 bpd of crude to high chemical conversion assets in China, in line with its strategy of converting 4 million bpd of crude to chemicals by 2030.
Aramco’s Energy Management Steering Committee (EMSC) recently held the 2022 Energy Efficiency Awards ceremony in Dhahran to celebrate excellence and exemplary performances from organizations and individual energy projects, as the company advances its decarbonization drive.
The 2022 awards were the fifth annual celebration of its type. Khalid Y. Al-Qahtani, Aramco vice president and chief engineer, and EMSC chairman, said that, “Our plan is to continue such an event annually to recognize best performers and create healthy competition.”
The Ras Tanura Producing Department (RTPD) carried off the flagship prize for the top performing department in terms of energy efficiency, with energy intensity coming in 5% below target, while 100% of the EnMP’s requirements were met. It implemented a wide range of energy saving initiatives, including a flare gas recovery system, and deployment of new disposal water pumps.
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Human Resources (HR) recently launched 1HR, a new centralized portal that combines more than 15 websites, integrating over 130 HR services into a single convenient and streamlined platform. The interactive 1HR portal includes HR services, information, recent announcements, and other exciting personalized content to enhance employee experience.
“1HR was created to centralize all HR services into a one-stop shop,” said Faisal A. Al-Hajji, senior vice president of HR.
Employees can use this system to create, manage, and track all of the necessary HR services related to their medical care, travel, family, and much more. It elevates user experience by presenting each employee with bespoke services and information based on their specific needs.