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Saudi Aramco sets up fuel retail unit

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Saudi Aramco Chief Executive Amin Nasser.


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.

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In the long run, the new retail subsidiary could help Saudi authorities conduct an initial public offer of shares in Aramco.

Plans to sell 5 per cent of Aramco were suspended this year, partly because it became clear Riyadh was unlikely to achieve the US$2 trillion valuation for the company that it wanted.

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. REUTERS

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