Saudi Aramco creates fuel retail subsidiary

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Saudi Aramco is establishing a domestic fuel retailing subsidiary as part of the national oil company’s drive to expand beyond crude oil production into downstream businesses. (File Photo/Reuters)
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Saudi Aramco signed a MoU with the Petroleum and Natural Gas Higher Institute of Technology and Training and the Al-Ayoun Charitable Society for Social Services to establish a center for date products in Al-Ahsa Governorate. (SPA)
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Saudi Aramco signed a MoU with the Petroleum and Natural Gas Higher Institute of Technology and Training and the Al-Ayoun Charitable Society for Social Services to establish a center for date products in Al-Ahsa Governorate. (SPA)
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Saudi Aramco signed a MoU with the Petroleum and Natural Gas Higher Institute of Technology and Training and the Al-Ayoun Charitable Society for Social Services to establish a center for date products in Al-Ahsa Governorate. (SPA)
Updated 10 January 2019
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Saudi Aramco creates fuel retail subsidiary

JEDDAH: Saudi Aramco is establishing a domestic fuel retailing subsidiary as part of the national oil company’s drive to expand beyond crude oil production into downstream businesses.
The new firm, Saudi Aramco Retail Co, will create a network of filling stations within Saudi Arabia to sell automotive fuels, Aramco said on Wednesday, without giving details of the size, cost or time-frame for the network.
In April, Aramco said it had signed a memorandum of understanding with French firm Total to evaluate the feasibility of jointly buying a retail service station network in Saudi Arabia.
But Wednesday’s statement did not mention Total or the possibility of buying existing stations. The new Saudi network will complement a global retail network which Aramco already operates through joint ventures, the company said.
In the long run, the new retail subsidiary could help Saudi authorities conduct an initial public offer of shares in Aramco.
Aramco is now focusing on a range of downstream projects, including the purchase of a major stake in petrochemical producer Saudi Basic Industries, which could boost its value and attractiveness to international investors, ultimately allowing the IPO to go ahead.
Meanwhile, Saudi Aramco signed a Memorandum of Understanding (MoU) with the Petroleum and Natural Gas Higher Institute of Technology and Training and the Al-Ayoun Charitable Society for Social Services to establish a center for date products in Al-Ahsa Governorate, in the framework of the company’s ongoing efforts to empower local communities.
The MoU aims to establish a date products center that works to develop high quality products, such as molasses, date paste, and date sweets.
The material returns of these products far outweigh the direct selling of dates, which is positively reflected on the community. There are about 100 beneficiaries, where people with low incomes and special needs in the province will benefit from this center.
The center will support the beneficiaries by qualifying them to the highest standards and developing their capabilities in the fields of recycling, packaging and the marketing of dates.
Saudi Aramco Vice President, Nabeel Al-Jama’, said that this initiative is part of Saudi Aramco’s objectives to contribute to empowering the community through a series of community-based programs to support people in dire need to enable them to support themselves and their families.
“It also serves an estimated segment of the people of the province of Al-Ahsa by supplying jobs that provide them with sustainable financial income,” he said.
He added “the agreement will promote sustainability, citizenship and local added value and the company will continue to provide development projects that contribute to increasing GDP in partnership with private and government institutions.”
He also said the agreement will preserve natural resources and benefit from the competitive advantages of the Kingdom’s regions, inorder to develop them to benefit future generations.


Dubai property developer Damac on hunt for land in Saudi Arabia

Hussain Sajwani
Updated 27 min 9 sec ago
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Dubai property developer Damac on hunt for land in Saudi Arabia

  • Brexit a “concern” for UK property market says Sajwani
  • Developer mulls investing “up to £500 million” on London project

DUBAI: The Dubai-listed developer Damac says it is scouting for additional plots of land in Saudi Arabia, both in established cities and the Kingdom’s emerging giga-projects such as Neom.
Hussain Sajwani, chairman of Damac Properties, also said the company would look to invest up to £500 million ($660 million) on a second development in the UK, and that it is on track to deliver a record 7,000 or more units this year.
Amid a slowing property market in Dubai, Damac’s base, the developer is eying Saudi Arabia as a potential ground for expansion for its high-spec residential projects.
Damac has one development in Jeddah, and a twin-tower project in Riyadh — and Sajwani said it is looking for additional plots in the Kingdom.
“It’s a big market. It is changing, it is opening up, so we see a potential there … We are looking,” he said.
“In the Middle East, Saudi Arabia is the biggest economy … They have some very ambitious projects, like the Neom city and other large projects. We’re watching those and studying them very carefully.”
The $500 billion Neom project, which was announced in 2017, is set to be a huge economic zone with residential, commercial and tourist facilities on the Red Sea coast.
Sajwani said doing business in Saudi Arabia was “a bit more difficult or complicated” that the UAE, but said the country is opening up, citing moves to allow women to drive and reopen cinemas.
He was speaking to Arab News in Damac’s London sales office, opposite the Harrods department store in Knightsbridge. The office, kitted out in plush Versace furnishings, is selling units at Damac’s first development in the UK, the Damac Tower Nine Elms London.
The 50-storey development is in a new urban district south of the River Thames, which is also home to the US Embassy and the famous Battersea Power Station, which is being redeveloped as a residential and commercial property.
Work on Damac's tower is underway and is due to complete in late 2020 or early 2021, Sajwani said.
“We have sold more than 60 percent of the project,” he said. “It’s very mixed, we have (buyers) from the UK, from Asia, the Middle East.”
Damac’s first London project was launched in 2015, the year before the referendum on the UK exiting the EU — the result of which has had a knock-on effect on the London property market.
“Definitely Brexit has cause a lot of concern, people are not clear where the situation will go. Overall, the market has suffered because of Brexit,” Sajwani said.
“It’s going to be difficult for the coming two years at least … unless (the UK decides) to stay in the EU.”
Despite the ongoing uncertainty over Brexit, Sajwani said Damac was looking for additional plots of land in London, both in the “golden triangle” — the pricey areas of Mayfair, Belgravia and Knightsbridge, which are popular with Gulf investors — and new residential districts like Nine Elms.
Sajwani is considering an investment of “up to £500 million” on a new project in the UK capital.
“We are looking aggressively, and spending a lot of time … finding other opportunities,” he said. “Our appetite for London is there.”
Damac is also considering other international property markets for expansion, including parts of Europe and North American cities like Toronto, Boston, New York and Miami, Sajwani said.
The international drive by Damac comes, however, amid a tough property market in the developer’s home market of Dubai.
Damac in February reported that its 2018 profits fell by nearly 60 percent, with its fourth-quarter profit tumbling by 87 percent, according to Reuters calculations.
Sajwani — whose company attracted headlines for its partnership with the Trump Organization for two golf courses in Dubai — does not see any immediate recovery in the emirate’s property market, or Damac’s financial results.
“(With) the market being soft, prices being under pressure, we are part of the market — we are not going to do better than last year,” he said. “This year and next year are going to be difficult years. But it’s a great opportunity for the buyers.”
But the developer said Dubai was “very strong fundamentally,” citing factors like its advanced infrastructure, safety and security, and low taxes.
In 2018, Damac delivered over 4,100 units — a record for the company — and this year, despite the difficult market, it plans to hand over even more.
“We’re expecting north of 7,000,” Sajwani said. “This year will be another record.”