Aramco acquires 40% stake in GO, marking first entry into Pakistani fuel retail market

Aramco acquires 40% stake in GO, marking first entry into Pakistani fuel retail market
This picture shows Aramco tower at the King Abdullah Financial District in Riyadh on April 16, 2023. AFP/File
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Updated 30 April 2024

Aramco acquires 40% stake in GO, marking first entry into Pakistani fuel retail market

Aramco acquires 40% stake in GO, marking first entry into Pakistani fuel retail market
  • Saudi oil giant Aramco inked agreement to buy 40 percent stake in Gas and Oil Pakistan Ltd. in December 2023 
  • Acquisition to bring much-needed foreign direct investment in Pakistan’s energy sector, says competition commission

KARACHI: The Competition Commission of Pakistan this week approved Saudi oil giant Aramco’s decision to acquire a 40 percent stake in local company Gas & Oil Pakistan Ltd, officially marking the Saudi company’s entry into Pakistan’s fuels retail market. 

Aramco and Gas signed the agreement to acquire 40 percent stake in Gas and Oil Pakistan Ltd., a licensed oil marketing company, in December 2023.

Gas and Oil Pakistan Ltd. is involved in the procurement, storage, sale, and marketing of petroleum products and lubricants. It is also one of Pakistan’s largest retail and storage companies.

Aramco is a global integrated energy and chemicals company that produces approximately one in every eight barrels of the world’s oil supply and develops cutting-edge energy technologies.

Aramco Asia Singapore Pte. Ltd., a Singaporean company wholly owned by Saudi Aramco, filed the pre-merger application with the CCP. It specializes in sales, marketing, procurement, logistics, and related services, with a focus on prospecting, exploring, drilling, extracting, processing, manufacturing, refining, and marketing hydrocarbon substances.

“The Competition Commission of Pakistan approved a 40 percent equity stake acquisition in Gas & Oil Pakistan Ltd. by Aramco, a global leader in integrated energy and chemicals,” the CCP said in a statement on Monday. “This transaction marks Aramco’s first entry into Pakistan’s fuels retail market, underscoring its confidence in the country’s economic potential and its commitment to its growth.”

The CCP said it had authorized the merger after determining that the acquisition would not result in the acquirers’ “dominance” in the relevant market post-transaction.

“Aramco’s acquisition indicates a significant milestone in Pakistan’s energy sector, bringing advanced expertise and technology to the fuels retail market,” it said. “This development is expected to boost competition, elevate service standards, and provide consumers with a broader range of high-quality products.”

The CCP said the acquisition would help bring much-needed foreign direct investment in Pakistan’s energy sector, contributing to economic growth and development of the country. 

In February 2019, Pakistan and Saudi Arabia inked investment deals totaling $21 billion during the visit of Saudi Crown Prince Mohammed Bin Salman to Islamabad. The agreements included about $10 billion for an Aramco oil refinery and $1 billion for a petrochemical complex at the strategic Gwadar Port in Balochistan.

Pakistan’s Prime Minister Shehbaz Sharif, who is in Saudi Arabia for a special meeting of the World Economic Forum, held meetings this week with Saudi Arabia’s ministers of energy, economy and planning, and environment, according to his office.

In a meeting with Saudi Energy Minister Prince Abdulaziz bin Salman on Monday evening, Sharif highlighted initiatives undertaken by Pakistan to facilitate investment in the energy sector. The Saudi side showed keen interest in Pakistan’s energy projects highlighted by Sharif, the Prime Minister’s Office said. 

The proposed projects included building new and improving existing energy infrastructure, increasing focus on renewable energy, and bringing efficiency across entire energy ecosystem in Pakistan, according to the statement. 

Pakistan and Saudi Arabia enjoy strong trade, defense and cultural ties. The Kingdom is home to over 2.7 million Pakistani expatriates and serves as the top source of remittances to the cash-strapped South Asian country.

Both countries have been closely working to increase bilateral trade and investment deals, and the Kingdom recently reaffirmed its commitment to expedite an investment package worth $5 billion.

Kingdom signs deal to use Saudi technology in tree planting in Brazil

Kingdom signs deal to use Saudi technology in tree planting in Brazil
Updated 9 sec ago

Kingdom signs deal to use Saudi technology in tree planting in Brazil

Kingdom signs deal to use Saudi technology in tree planting in Brazil
  • Agreement backed by Ministry of Environment, Water and Agriculture, Brazilian government

RIYADH: The Kingdom and Brazil have signed a partnership agreement to use smart Saudi digital technology in tree planting in the Brazilian city of Jatai, the Saudi Press Agency reported on Tuesday.

The deal is sponsored by the Kingdom’s Ministry of Environment, Water and Agriculture and the Brazilian government.

It was agreed during MEWA’s participation in the G20 Young Entrepreneurs’ Alliance Summit in the Brazilian city of Goiania earlier this month, hosted by the National Federation of Young Entrepreneurs in Brazil.

The agreement is a turning point in international cooperation on preserving the environment, achieving sustainable development, and developing entrepreneurship, the SPA said.

It will contribute to stimulating the exchange of knowledge and technology and the transfer of expertise between the Kingdom and Brazil, enhancing their joint capability in reducing carbon emissions while strengthening strategic partnerships to develop and implement joint projects that promote sustainable development, in line with the Kingdom’s Vision 2030.

The ministry’s participation at the summit was represented by a number of entrepreneurship programs in the sector, and affiliated emerging companies.

Ali bin Mohammed Al-Sabhan, the director general of the General Department of Entrepreneurship at the ministry’s Research and Innovation Agency, said that such international participation was an example of MEWA’s efforts to support and empower entrepreneurs and emerging companies in its sectors.

It aims to continue working with member states to discuss ways of joint cooperation and exchange of expertise and knowledge, to enhance the development of the entrepreneurship system in the ministry’s sectors in particular, and the Kingdom in general, he added.

Saudi Fund for Development chief participates in OPEC forum, meets several officials

Saudi Fund for Development chief participates in OPEC forum, meets several officials
Updated 25 June 2024

Saudi Fund for Development chief participates in OPEC forum, meets several officials

Saudi Fund for Development chief participates in OPEC forum, meets several officials
  • Parties discuss projects and programs funded by the SFD

RIYADH: Sultan bin Abdulrahman Al-Marshad, the CEO of the Saudi Fund for Development, participated on Tuesday in Vienna’s OPEC Fund Development Forum.

Al-Marshad was there to discuss with energy partners ways of supporting countries to achieve Sustainable Development Goals, and current global challenges.

Al-Marshad met the President of Sierra Leone Julius Maada Bio on the sidelines of the forum. The parties looked at the SFD’s activities in financing development projects and programs in Sierra Leone, and discussed ways to enhance cooperation, the SFD said in a statement on X.

He also held talks with Sri Lanka’s State Minister of Finance Shehan Semasinghe; Maldives’ Minister of State for Finance Hussain Sham Adam; and Somalia’s Minister of Finance Bihi Egeh.

The parties discussed development projects and programs funded by the SFD and currently being implemented, as well as examining ways to enhance cooperation to finance development sectors, while reviewing relations between the fund and the respective countries.

The one-day forum brought together government leaders, heads of institutions and practitioners from the international development community to explore current challenges and opportunities “for delivering transformative and sustainable development” under the theme “Driving Resilience and Equity.”

The SFD has contributed within the framework of its development activity in financing projects and programs over 50 years in various vital sectors in Sierra Leone, Somalia, Sri Lanka and the Maldives, supporting social growth and economic prosperity in the beneficiary communities as they work toward achieving sustainable development, the Saudi Press Agency reported.

Saudi Arabia raises $1.17bn from June sukuk issuance

Saudi Arabia raises $1.17bn from June sukuk issuance
Updated 25 June 2024

Saudi Arabia raises $1.17bn from June sukuk issuance

Saudi Arabia raises $1.17bn from June sukuk issuance

RIYADH: Saudi Arabia has completed its riyal-denominated sukuk issuance for June at SR4.4 billion ($1.17 billion), according to the National Debt Management Center.

The Kingdom issued sukuk amounting to SR3.23 billion in May, while it was SR7.39 billion and SR4.4 billion in April and March respectively.

NDMC said that the Shariah-compliant debt product for June was divided into three tranches. The first amounted to SR1.6 billion and the second to SR53 million for sukuk maturing in 2027. The third tranche amounted to SR2.76 billion for sukuk maturing in 2034.

A report released by S&P Global in April said that sukuk issuance globally was expected to hover between the $160 billion to $170 billion mark in 2024, compared to $168.4 billion in 2023 and $179.4 billion in 2022. 

According to the US-based firm, the issuance of the debt product began on a strong footing in 2024, with Saudi Arabia becoming a key contributor to the performance.

The credit-rating agency also noted that the sukuk market will continue to grow in the near term, driven by financing needs in core Islamic finance countries and the ongoing economic transformation programs in nations like the Kingdom.

S&P Global said: “The market has started 2024 on a strong footing, with total issuance reaching $46.8 billion at March 31, 2024, compared with $38.2 billion at March 31, 2023. Saudi Arabia was a key contributor to this performance.

“The drop in issuance volumes in 2023, which mainly resulted from tighter liquidity conditions in Saudi Arabia’s banking system and Indonesia’s lower fiscal deficit, was somewhat compensated (for) by an increase in foreign currency-denominated sukuk issuance.”

An additional report released by Fitch Ratings in April echoed similar views and noted that global sukuk issuance was expected to grow in the coming months of this year.

The organization noted that economic diversification efforts and the rapid development of the debt capital market in the Gulf Cooperation Council region would propel the growth of the sukuk market as 2024 progresses.

Saudi Arabia welcomes global players in AI to ‘set up shop’ in Kingdom: minister

Saudi Arabia welcomes global players in AI to ‘set up shop’ in Kingdom: minister
Updated 25 June 2024

Saudi Arabia welcomes global players in AI to ‘set up shop’ in Kingdom: minister

Saudi Arabia welcomes global players in AI to ‘set up shop’ in Kingdom: minister

RIYADH: Saudi Arabia has “a lot to offer” global players in the artificial intelligence sector looking to set up shop in the Kingdom, a top minister has insisted. 

Speaking during the World Economic Forum’s 15th Annual Meeting of the New Champions, also known as the Summer Davos, which opened in northeast China’s coastal city of Dalian on June 25, Faisal Al-Ibrahim, Saudi Arabia’s minister of economy and planning, affirmed that Saudi Arabia is focused on ensuring that the global transition toward these emerging technologies occurs equitably.

The Kingdom is making significant strides in the world of artificial intelligence in pursuit of its ambitious initiatives to position Saudi Arabia as a global leader in the field.

The National Strategy for Data and Artificial Intelligence, launched in 2020, is a cornerstone of these efforts, seeking to attract $20 billion in investments by 2030 and cultivate a workforce of 20,000 AI and data specialists.

“One thing we’re really keen on and we’ve been working with the forum recently on is global governance. The Kingdom recently joined the artificial intelligence governance alliance, we specifically launched an inclusivity initiative,” he said.

Highlighting the role that AI can play in either easing or alleviating global disparities, he added: “If AI isn’t going to be accessible by developing cultures or the whole world all together, the gap we have is from an economic point of view, from a capability point of view.

“Institutional capabilities are the reasons why economies become more complex, the reason why countries perform better, one of the main reasons, and if AI comes in and isn’t really accessible by everyone, then that is really a big challenge and can even exacerbate the challenges we live in.”

Featuring the theme “Next Frontiers for Growth,” the event, held from June 25 to 27, is gathering some 1,600 leading figures from the public and private sectors across nearly 80 countries and regions to jointly explore new drivers and pathways for global economic growth.

This year’s forum covers multiple key pillars, including “A New Global Economy, China and the World,” “Entrepreneurship in the Age of AI,” and “New Frontiers for Industries,” as well as “Investing in People,” and “Connecting Climate, Nature and Energy.”

In a dialogue session entitled “What do we expect from future growth?” Al-Ibrahim discussed the rapid growth of non-oil activities in Saudi Arabia since the launch of Vision 2030.

He said: “The Kingdom achieved the fastest economic growth rate for the year 2022 at 8.7 percent, and non-oil activities achieved 5.6 percent, and even today, the growth of non-oil activities remains strong, as non-oil activity constitutes 51 percent of the real gross domestic product. The Kingdom’s non-oil economy is larger than its oil economy.”

At the conclusion of his participation, the minister stressed the necessity of developing a comprehensive and integrated approach to addressing worldwide economic challenges, noting that by adopting international cooperation, innovation, and comprehensive solutions, the global community can effectively address some of these obstacles and mitigate their severity.

Saudi financial sector to grow bond offerings, investment minister reveals at London forum

Saudi financial sector to grow bond offerings, investment minister reveals at London forum
Updated 25 June 2024

Saudi financial sector to grow bond offerings, investment minister reveals at London forum

Saudi financial sector to grow bond offerings, investment minister reveals at London forum

RIYADH: Bond offerings in Saudi Arabia are set to expand with increased activity, highlighting significant growth opportunities in the Kingdom’s financial sector, according to the investment minister.

On the sidelines of the UK-Saudi Sustainable Infrastructure Summit in London on June 24, Khalid Al-Falih noted that despite the substantial and rapid growth in business opportunities in the Kingdom, certain aspects of the financial sector have not progressed fully, reported the Independent Arabia.

“Considering the size of the growth acceleration and its scope in business opportunities in Saudi Arabia, some aspects related to the financial sector have not fully evolved yet, especially in terms of penetration levels and trading of issued bonds. Bond offerings in Saudi Arabia should witness growth through increased activity. There are significant growth opportunities available in Saudi Arabia,” Al-Falih stated.

The minister emphasized that sustainable energy sources are a pivotal sector set for significant growth in the Kingdom, positioning the nation as a worldwide leader in competitive solutions, contributing to global economic growth.

Saudi Ambassador to the UK Prince Khalid bin Bandar said the relationship between Riyadh and London has “grown stronger over time and will continue to strengthen,” reported the Independent Arabia.

He added: “Our mission is to ensure that people living in Saudi Arabia, regardless of what is happening there today, continue to receive those opportunities.”

The ambassador further highlighted the expansive growth potential across all industries in the Kingdom, highlighting upcoming presentations about promising opportunities in the country.

“For example, if you look at the country's capacity for renewable energy, before launching the 2030 plan, it was very limited, and today we are doubling what we can offer year after year. By 2030, our goal is for 50 percent of our energy sources to be renewable, produced by clean energy,” Bandar said.

He continued: “This is just the beginning, and we will continue to do so in every area you can imagine, whether it's this topic or another. I think it makes our mission easy to know that there is always room for growth.”

According to the Independent Arabia, the ambassador further explained his perspective on investment opportunities in Saudi Arabia, saying that he learned from his days in the private sector the danger of being the one to “miss the boat.”

He continued: “I say that the promising investment opportunities in Saudi Arabia are making the boats flow, and they are getting bigger every day, and more ports are opening their arms. Yes, there are promising opportunities in Saudi Arabia. Some people might say ‘I can miss this boat and get on the next one,’ and I say ‘Why should you miss this boat?’ There are great opportunities in Saudi Arabia.”

He discussed the bright future ahead for the nation’s many industries, pointing out that they are now expanding, particularly in the financial sector.

“You can talk about these opportunities or go explore them in Saudi Arabia,” he said to the group of investors, reported the Independent Arabia.

Nadhmi Al-Nasr, CEO of Saudi Arabia’s $500-billion giga-project NEOM, said that the Kingdom is eager to strengthen its infrastructure-focused alliances with Britain.

Al-Nasr stated that NEOM is currently the largest sustainable region in the world and highlighted bold plans and objectives to become carbon neutral by 2030. He mentioned that NEOM will encompass 26,500 sq. km, which is the same area as Belgium.

“The United Kingdom has some of the most innovative green technology companies that embrace the circular economy and green, sustainable solutions. We look forward to integrating new and existing partnerships with our British funding, and we see that there are several great opportunities for both countries on the rise,” Al-Nasr said, as reported by the Independent Arabia.

Furthermore, the Lord Mayor of the City of London, Alderman Professor Michael Mainelli, said that “Vision 2030” represents a foundational strategy for economic and social transformation in Saudi Arabia.

“I have heard about 14 major projects, which are amazing, futuristic, and inspiring projects, along with a plan for important infrastructure initiatives worth $800 billion to double the size of Riyadh city over the next decade,” Mainelli said.

He underscored that “these giant projects will support major events that we will hear about, such as Saudi Arabia hosting Expo 2030 and the 23rd and 24th World Basketball Championships, and Miami Valley skiing holidays.”

Mainelli continued: “These diverse events will play a prominent role in the future, all of which are related to the ambition of building modern, reasonable, and sustainable cities, as evident from Saudi Arabia's embrace of new technologies such as hydrogen and artificial intelligence.”

The Lord Mayor of the City of London added that artificial intelligence and other technologies will propel Saudi Arabia toward net zero and broader climate goals.