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.


India suspends Kashmir border trade with Pakistan

Updated 19 April 2019
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India suspends Kashmir border trade with Pakistan

  • Kashmir has been on edge since a February suicide attack that killed 40 Indian paramilitaries
  • India said it had reports that trade on the border was being “misused by Pakistan-based elements for funnelling illegal weapons, narcotics and fake currency”

NEW DELHI: India has suspended trade across its disputed Kashmir border with Pakistan, alleging that weapons and drugs are being smuggled across the route, as tensions simmer between the nuclear-armed neighbors.
Kashmir has been on edge since a February suicide attack that killed 40 Indian paramilitaries and brought the two countries to the brink of war with cross-border air strikes.
On Thursday, India’s government, which is in the middle of a tough national election, said it had reports that trade on the border was being “misused by Pakistan-based elements for funnelling illegal weapons, narcotics and fake currency.”
It also said many of those trading across the Line of Control, which divides Kashmir into zones under Indian and Pakistani control, had links to militant organizations.
The home ministry said trade would be suspended until a stricter inspection mechanism is in place.
The cross-border trade is based on a barter system, with traders exchanging goods including chillies, cumin, mango and dried fruit.
It began in 2008 as a way to improve strained relations between New Delhi and Islamabad, who have fought two of their three wars over the disputed region.
The Indian Express newspaper said Friday that 35 trucks carrying fruit traveling from the Indian side of the border had been stopped after the government order.
Trade on the border has been suspended before, including in 2015, when India accused a Pakistani driver of drug trafficking.
The latest move comes after India withdrew “Most Favoured Nation Status” — covering trade links — from Pakistan after the February attack, which was claimed by the Pakistan-based Jaish-e-Mohammed Islamist group.
Islamabad has denied any involvement in the attack.
India’s Hindu nationalist Prime Minister Narendra Modi has made national security a key plank of his re-election campaign, pointing to the recent flare-up of violence as he battles the center-left opposition Congress party.
He is seeking a second term from the country’s 900 million voters in the mammoth election which kicked off on April 11 and runs till May 19. The results will be out on May 23.