SPECIAL REPORT
to cement its position in the core export markets and ensure its market share in US markets regardless of competition or increased US production ,” Dr Tamimi says .
Aramco has been investing in new refineries for some time , cementing its position in countries that are considered to be its core market , including China , Indonesia and Malaysia .
Tom Kloza the global head of energy analysis at the Oil Price Information Service in Wall , New Jersey , is absolutely convinced that such strategy of diversification makes sense , and he suspects that Aramco will pursue an acquisitive strategy across many continents , including North America .
“ My guess would be that they will own several more US refineries by the end of 2018 and I do not believe that they ’ ll do so through joint ventures , so I suspect Motiva will be one of the biggest players in mergers and acquisitions in the US ,” he said . Cornell noted that such decisions will be taken on the basis of the long-term viability of specific potential investments - not just to make the initial public offering ( IPO ) more attractive .
There was much talk last year when Aramco made a bid to purchase the Lyondell refinery in Houston , Texas , however , the deal was never consummated as Lyondell took the refinery off the market . But nevertheless , Motiva could pursue other Gulf Coast refineries or indeed expand via deals in other portions of the country , including the West Coast , according to Kloza .
More Saudi crude coming to the US By expanding its downstream potentials , Saudi Arabia is also increasing demand for its crude production , creating a chain of reliable crude buyers regardless of global oil price .
Through expanding its refinery fleet , Aramco and Saudi Kingdom are diversifying energy price risk , since adding refining risks to a crude production risks contributes to the reduction of total risk . Kloza believes they ’ ll send more crude to the US when it makes sense , and that it will hurt some of the demand for crude from stateside , Canadian or other foreign sources .
12 August 2017