The largest oil refinery in North America is now under the control of Saudi Aramco, which has purchased it recently. The deal unveiled some of the major operations of the Saudi company and its future strategy, following which it will soon become the largest company on the global stock markets.
Aramco, the oil giant, is still wholly owned by the Saudi government. However, five percent of the company is to be floated in a public offering, listing its shares on the market and becoming the largest joint stock company in the world.
Aramco competes in size with the giants Google, Apple and others.
A report by Foreign Affairs magazine said that Aramco had bought 100 percent of Port Arthur oil refinery in Texas, the largest refinery in North America (in the United States and Canada together). The oil refiner, “will enhance Aramco’s access to the lucrative US energy market at this critical time,” as reported by the magazine.
Towards greater strength
According to the Foreign Affairs report, energy experts believe that the deal signed by Aramco a few days ago represents the latest episode in its march towards greater strength in the oil markets before they go public next year.
“The deal reveals a broader strategy for Aramco that has never been taken by any state oil company before, a strategy based on the purchase of refineries all over the world in order to ultimately reach the consumer regardless of prices,” the magazine said.
Last Monday, Aramco signed a deal to buy the Port Arthur along with 24 distribution stations as investors eye the initial public offering, which is attracting high interest from major investors around the world.
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The US magazine reveals that the Port Arthur refinery in Texas is the “jewel of the crown” in the US oil market, because of its size and strategic importance, as it handles daily 600,000 barrels of oil, and produces in important places in the American continent, since it is the beating heart of the US economy.
“This Port Arthur deal is about Saudis getting prepared to try and value Aramco at the highest amount they can before the initial public offering,” said Andrew Holland, an energy expert at Washington. After the deal, the company could increase its market size by over $2 trillion which is the expected value. If so, Aramco will become the largest publicly listed company in the world. Even with only 5 percent in the Initial Public Offering, Aramco is expected to break records.
The US market is one of the "important stations" for Saudi Arabia, especially since the United States is one of the largest producers and consumers of oil in the world, and the largest economy in the world, while Saudi Arabia succeeded in raising its oil exports to the United States by 32 percent during the current year compared to last year, where it was revealed that the Kingdom exported 1.3 million barrels of oil per day to the United States during the month of February.
The Arthur Port refinery is not the first conquest of Aramco and will not be the last. Aramco has bought oil refineries in China, Japan, Indonesia and South Korea and is currently exploring similar opportunities in India and Malaysia as well.
This article is also available in Arabic.