Shell exits Saudi petrochemicals venture

Saudi Basic Industries Corporation (Sabic) on Sunday said it had reached an agreement with Shell on acquiring the latter’s stake in their Saudi petrochemicals tie-up.

Sabic will buy out Shell in a deal valued at USD 820 million, becoming the sole owner of Saudi Petrochemical Company (Sadaf). The Shell-Sabic partnership, whose six petrochemicals plants together produce some 4 million tonnes per year, was set to expire in 2020.

“With this transaction, Sabic is looking to capitalise on synergy opportunities of Sadaf with other affiliates, and improve its operation and profitability,” Chief Executive Yousef Al Benyan said in a statement.

Late last week, Sabic posted a 2016 net profit of USD 4.78 billion, down from USD 5 billion the year before. The company ended the year with fourth-quarter profits of USD 1.21 billion, up almost 48% compared with the same period in 2015.

Quarterly revenue was essentially level at some USD 9.07 billion. Measured over the whole year, revenue was down 10% to some USD 33 billion. Commenting on the results, Al Benyan said Sabic had performed “admirably” given the “unusual market conditions.”