Total interested in exploring Saudi petrol station market with Aramco

Total and Aramco are considering the joint acquisition of petrol station operators in Saudi Arabia, two sources familiar with the matter said. (Reuters)
Updated 26 April 2018
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Total interested in exploring Saudi petrol station market with Aramco

LONDON: Total is exploring options to enter Saudi Arabia’s petrol station market in conjunction with Saudi Aramco, as international interest in the Kingdom’s fuel distribution sector hots up.

A spokesman for the French energy major told Arab News that “several possibilities (are) under evaluation” for entering the sector, following the signature of an MoU with Aramco earlier this month “to evaluate the feasibility of jointly acquiring a retail service station network in Saudi Arabia.”

Bloomberg reported yesterday that the two firms are considering jointly acquiring Tas’helat Marketing Company, which operates petrol stations in the Kingdom under the “Sahel” brand, citing people with knowledge of the matter.

The Total spokesman declined to comment on the report.

Aramco is the sole distributor to Saudi Arabia’s petrol stations, but has no stations of its own, despite announcing plans to enter the sector in 2014.

Total and Aramco’s evaluation of the sector follows an uptick in interest from regional distributors.

Dubai-based ENOC in February opened what it described what it described as Saudi Arabia’s largest petrol station in the Modon industrial area of Riyadh, its 10th in the Kingdom. The company said at the time it planned to open further distribution facilities in the country later this year, giving no further details.

Abu Dhabi’s ADNOC Distribution meanwhile plans to open its first petrol station in Saudi Arabia later this year, following the award of an operating license last week.

Expansion into Saudi Arabia is a key strategic initiative of the fuel retailer, which operates nationwide in the UAE apart from in Dubai, and contributed to the success of its IPO on the Abu Dhabi stock market at the end of last year.
 
But a big play into the sector by Total and Aramco may well disrupt ADNOC Distributions plans, analysts have cautioned.

“In the pre-IPO presentation, ADNOC Distribution did not provide sufficient details for analysts to work in the potential for (Saudi operations) into their models,” Sanyalak Manibhandu, head of research at FAB Securities, told Arab News.

“Much was made of the potential of improving the standard of KSA service stations.  If Aramco/Total are really going to compete on the service station forecourt and the adjacent grocery store, the potential will not be so good for competitors.”

Oman Oil Marketing Company earlier this month announced plans for a petrol station in Saudi Arabia, its first outside the Sultanate, after receiving an operating license in the Kingdom in 2015.

BMI Research last month forecast that Saudi car sales will rise by 4 percent in 2018, after having fallen by over 20 percent in 2016 and 2017.

But last year’s lifting of a ban on female drivers will have only a moderate impact on the market, the research firm said, coming into effect only in June, with many families already owning cars for use by women but are currently driven by paid drivers.

The agreement by Total and Aramco to explore options in the fuel distribution sector was signed on April 10, alongside the signing of an MoU between the two firms to build a large petrochemical complex in Jubail, integrated downstream of Aramco’s SATORP refinery.


Saudi Arabia and UAE launch a new joint cryptocurrency

Updated 20 January 2019
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Saudi Arabia and UAE launch a new joint cryptocurrency

  • The cryptocurrency will be limited to banks during its first stages
  • The program will also help the two countries evaluate the monetary policies of a centralized currency

Saudi Arabia and the UAE have launched a joint cryptocurrency during the first meeting of the Saudi-Emirati Coordination council Saturday in Abu Dhabi, UAE’s national press agency WAM said.

The cryptocurrency will be limited to banks during its first stages, until the governments have a better understanding of how Blockchain technology operates cross-borders.

The currency operates on the use of a “distributed database between the central banks and the participating banks from both sides,” aiming to protect customer interests, set technology standards and assess cybersecurity risks. The new program will also help evaluate the impacts of a central currency on monetary policies.

During the meeting, representatives of Saudi Arabia and the UAE also signed the Joint Supply Chained Security Cooperation program, which tests the two countries abilities to provide vital supplies during times of crisis and national emergencies, as well as share expertise and knowledge in the field.

All 16 members of the executive committee of the council followed up on the execution of the initiatives mentioned in the Strategy of Resolve.

Representatives also set five other initiatives to enhance the cooperation between the two countries, such as facilitating the traffic between ports, improving airports to make it easier for people with disabilities to travel, creating a financial awareness program for children aged 7-18, starting a joint platform to support local SMEs, and the integration of civil aviation markets,

The committee was headed by Mohammad bin Abdullah Al-Gergawi, minister of cabinet of affairs and the future of UAE, and Mohammed bin Mazyad Al-Twaijri, minister of economy and planning in Saudi. The committee will also monitor the implementation of the initiatives.