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on september 11, saudi aramco announced that it had signed a development framework agreement with rongsheng petrochemical. the two parties are discussing two acquisitions, namely rongsheng petrochemical plans to acquire a 50% stake in sasref, a wholly-owned subsidiary of saudi aramco, and saudi aramco's potential acquisition of no more than 50% of the shares of cicc petrochemical, a wholly-owned subsidiary of rongsheng petrochemical.

at the same time, saudi aramco also announced that it had signed a strategic cooperation agreement with hengli group. advances talks on saudi aramco's potential acquisition of 10% stake in hengli petrochemical, but due diligence and regulatory approval are still required.

in recent years, saudi capital has frequently made large investments in china's downstream petrochemical industry. amin nasser, president of saudi aramco, said in a conference call at the beginning of the year: "china's oil demand is strong and growing, and the company is looking for opportunities to further invest in china."

saudi aramco is one of the world's largest integrated energy and chemicals companies, with a current total market value of approximately rmb 12.39 trillion.

"increase investment in china" continues to advance

according to an announcement made by rongsheng petrochemical on the evening of september 11, on january 2, 2024, the company signed a memorandum of understanding with saudi aramco to discuss the proposed acquisition of a 50% stake in sasref, a wholly-owned subsidiary of saudi aramco, and plans to increase production capacity through expansion to improve product flexibility, complexity and quality.

at the same time, the two parties are also discussing saudi aramco (or its affiliates)'s potential acquisition of no more than 50% of the equity of rongsheng petrochemical's wholly-owned subsidiary cicc petrochemical, and jointly developing the upgrade and expansion of cicc petrochemical's existing facilities.

the latest development is that rongsheng petrochemical and saudi aramco have reached consensus on some matters and signed the "framework agreement on joint development agreement" in riyadh on september 11, 2024, to jointly promote the joint development agreement to regulate the cooperation implementation required for the sasref joint development and expansion project.

rongsheng petrochemical said that this progress is expected to further strengthen the daily communication, technology research and development, and business cooperation between the two parties, and promote the realization of their respective strategic goals and long-term sustainable development.

the agreement signed between saudi aramco and hengli group has advanced negotiations on saudi aramco's possible acquisition of a 10% stake in hengli petrochemical, but due diligence and regulatory approval are still required.

in april this year, hengli petrochemical announced that its controlling shareholder hengli group and saudi aramco signed a memorandum of understanding. the two parties are discussing saudi aramco's plan to acquire hengli group's shares, which account for 10% plus one share of the company's issued share capital.

hengli group also stated that it will support the company's strategic cooperation with saudi aramco in crude oil supply, raw material supply, product procurement, technology licensing and other aspects.

saudi capital frequently "buys" chinese refining and chemical companies

currently, saudi arabia's capital investment is mainly carried out through the sovereign wealth fund public investment fund and oil giant saudi aramco.

among them, saudi aramco is one of the world's largest integrated energy and chemical companies, mainly engaged in oil exploration, development, production, refining, transportation and sales. it was listed on the saudi stock exchange in 2019.

in recent years, saudi capital has frequently invested in china's downstream refining and chemical companies. especially after 2022, saudi aramco's layout in china has accelerated significantly. it has strategically invested in rongsheng petrochemical and plans to strategically invest in refining and chemical companies such as oriental shenghong and shandong yulong.

in march 2023, saudi aramco acquired 1.013 billion shares of rongsheng petrochemical through its wholly-owned subsidiary aramco overseas company, accounting for 10% of rongsheng petrochemical's total share capital, becoming its second largest shareholder. according to the information disclosed at the time, saudi aramco's acquisition price was 24.3 yuan per share, corresponding to a total transaction price of approximately 24.6 billion yuan.

in september 2023, saudi aramco announced that it planned to acquire a 10% strategic stake in shenghong petrochemical, a wholly-owned subsidiary of oriental shenghong. in october of the same year, saudi aramco, nanshan group, shandong energy group and non-listed refining giant shandong yulong signed a memorandum of understanding, under which saudi aramco may acquire a 10% strategic stake in shandong yulong.

saudi aramco president and ceo amin nasser said in a fiscal 2023 earnings call that china's oil demand is strong and growing, and the company is looking for opportunities to further invest in china.

it is worth mentioning that due to the decline in crude oil production and the continued deterioration of refining profit margins, saudi aramco's profits fell by 3.4% in the second quarter of this year, and its net income in the first half of 2024 was us$56.3 billion, a year-on-year decrease of 9%.