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

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.


Mideast virus quarantine measures not working, says IATA

Updated 27 November 2020

Mideast virus quarantine measures not working, says IATA

  • International Air Transport Association predicts economic impact of COVID-19 will be felt for years to come

JEDDAH: Saudi Arabia and the Middle East will feel the damaging economic impact of the coronavirus disease pandemic on the aviation sector for many years to come, according to a leading global industry organization.

And the only way to help the recovery is to eliminate quarantine measures and introduce systematic testing of passengers, said the International Air Transport Association (IATA).

The latest figures issued by the IATA forecast global airlines to lose a total of $157 billion this year and next, with those in the Middle East set for 2020 losses amounting to $7.1 billion, and $3.3 billion in 2021.

“Saudi Arabia, just like other countries, was impacted a lot because of its large networks and large carriers that are operating not by Saudi carriers only . . . Saudi Arabia has around 94 international carriers flying in and out of the country, and all those were stopped,” Muhammad Ali Albakri, IATA regional vice president for the Middle East and Africa, told Arab News.

He pointed out that due to its strategic geographical position the Middle East had a high degree of connectivity, with 1,060 routes as of April 2019.

All flights in, out, and within Saudi Arabia were grounded in March. While domestic flights restarted in May and Riyadh has reported that the volume of traffic has recovered to nearly 60 percent, international flights are not due to restart until January at the earliest.

FASTFACT

43%

IATA expects Middle East airline revenues to improve by 43 percent next year compared to 2020.

As a result, IATA said that Saudi Arabia’s air connectivity score this year dropped by96 percent, which was the biggest in the region and compared to 89 percent in the UAE.

The negative impact of COVID-19 on aviation revenues and passenger demand will be felt for years, the association added.

It predicted that the Middle East’s revenues for 2021 would improve by 43 percent — compared to 2020 — but would still be down 16 percent from the peak before COVID-19, equating to about $68.5 per passenger.

“The forecast for 2021 is better than 2020 but would not be enough because it is expected to remain negative in the territory and revenues, due to delays in anticipated recovery that was expected in the second half of 2020, but did not happen,” Albakri said.

One of the ways in which the region could speed up the economic recovery from COVID-19 would be to eliminate quarantine measures and adapt systematic testing of passengers,  IATA said.

Sixteen countries in the Middle East have opened their borders to regional and international air travel, but nine of these still have quarantine measures in place, which IATA said equates to a closed border.

“Reopening borders safely is a must, it’s no longer an alternative, it really has to happen and has to happen quickly. Quarantine cannot work, countries cannot continue to rely on closing their borders, or opening the borders but requiring quarantines,” Albakri added.

IATA is calling for the systematic testing of passengers without the need for quarantine on arrival, which will enable governments to safely open borders and help their economies to recover from the impact of the pandemic and control the spread of the disease.

“We are advocating systematic testing is the safe alternative to reopen borders; testing that is scalable, affordable, accurate, and fast in delivering the results is the way forward,” Albakri said.

The association noted that the Middle East’s high level of connectivity would also help aviation companies play a key role in the transportation of COVID-19 vaccines worldwide. In order for this to happen, it said governments in the region needed to work closer together and adopt internationally accepted measures and procedures.

“Countries in the region have to start working together to support the delivery of COVID-19 vaccines, not only to the need of the region’s countries and populations but also to act as a shipping hub between East and West to help vaccines to be transported safely and securely around the world,” Albakri added.

He said that IATA was working with all countries in the Middle East directly, and in cooperation with the International Civil Aviation Organization and the Arab Civil Aviation Organization, to merge paths and efforts to adopt a unified methodology, and that a proposal had been prepared for Arab transport and health ministers to take onboard.