Saudi Aramco and Sinopec to Strengthen Co-Operation

Saudi Aramco and the China National Petrochemical Corporation have signed a memorandum of understanding in a mutual effort to deepen the existing co-operation between the two companies and strengthen their relations and business development opportunities.

The memorandum of understanding (MoU) reaffirms the interest of the two companies to continue exploring further opportunities that will support their current joint ventures and increase strategic co-operation.

Abdallah Jum’ah, Saudi Aramco’s president and CEO, said that the MoU is aimed at revitalizing the relations between Saudi Aramco and China National Petrochemical Corporation (Sinopec), reflecting both China’s view of the crucial role of Saudi oil in the world, as well as Saudi Arabia’s view of China’s crucial role in the global economy.

In 2007, the two sides formed the Fujian Refining & Petrochemical Company and the Fujian Sinopec SenMei Petroleum Company, striving to fully integrate production and marketing in the areas of refining and petrochemicals, and achieve commercial success in the global market. Saudi Aramco and Sinopec have also agreed to continue exploring for potential economic opportunities to collaborate on.

The volume of crude oil trade between the two parties has been steadily increasing. In 2007, Sinopec imported nearly 23 million tons of crude oil from Saudi Aramco at an average of 460,000 barrels per day (bpd). With the current expansion of Fujian refinery, Sinopec will be looking to import 32.4 million tons at an average of 650,000bpd in 2008.

It is expected that by 2010, the average rate will increase to one million bpd, as per an MoU signed between the companies in 2006, and by 2015, the rate will reach 1.5 million bpd.