Aramco becomes majority owner of Petro Rabigh in US$700 mn deal
Saudi Aramco, one of the world’s leading integrated energy and chemicals companies, has advanced its downstream expansion with the acquisition of an additional 22.5% stake in Rabigh Refining and Petrochemical Company (Petro Rabigh) from Sumitomo Chemical Corporation (Sumitomo) for US$702 million.
Aramco is now Petro Rabigh’s largest shareholder with an equity stake of approximately 60%, while Sumitomo retains an equity stake of 15%.
By becoming the majority owner of Petro Rabigh, a 400,000-barrels-per-day refining and petrochemical complex located on Saudi Arabia’s west coast, Aramco tightens control over a critical value chain asset that has struggled to remain profitable in recent years. Petro Rabigh, established in 2005 as a joint venture between Aramco and Japan-based Sumitomo Chemical, has seen its fortunes erode in a volatile petrochemical pricing environment. The integrated complex produces a mix of refined fuels and chemical derivatives such as ethylene, propylene, polyethylene, and monoethylene glycol. But amid macroeconomic pressures, subdued global demand, and high debt levels, the asset has been underperforming.
The transaction, thus, enhances Aramco’s ability to support the transformation program underway at Petro Rabigh, which includes targeted asset upgrades to improve the yield of high-margin products and enhance plant reliability.
Hussain A. Al Qahtani, Aramco Senior Vice President of Fuels, said that Petro Rabigh is a key player in Saudi Arabia’s downstream sector and this additional investment by Aramco reflects strong belief in its long-term prospects.
As part of the transaction, first announced in August 2024, Aramco and Sumitomo agreed to inject a total of US$1.4 billion to partly prepay Petro Rabigh’s debt, supporting its future growth opportunities and strengthening its balance sheet. This injection will involve the innovative issuance by Petro Rabigh of Class B shares, which will be fully subscribed to by Aramco and Sumitomo. Through the Class B share issuance, Aramco and Sumitomo will be able to inject fresh capital without altering Petro Rabigh’s existing governance structure or diluting the voting power of Petro Rabigh’s other shareholders.
As part of the transaction, Aramco and Sumitomo have also waived a total of US$1.5 billion in shareholder loans to Petro Rabigh (completed in two phases in August 2024 and January 2025), improving its capital structure and partially remediating its accumulated losses.
