Saudi Aramco to acquire strategic shareholding in Showa Shell
Posted: 5 July 2004
Aramco Overseas Company B.V., a subsidiary of Saudi Arabian Oil Company ("Saudi Aramco", the national oil company of Saudi Arabia), today signed an agreement to acquire a strategic shareholding in Showa Shell Sekiyu K.K. ("Showa Shell"), to form a partnership with the company's largest shareholder, Royal Dutch/Shell Group, which will enhance Showa Shell's refining and marketing business in Japan.
Royal Dutch/Shell Group, the 50 per cent shareholder of Showa Shell, agreed to transfer a portion (37,540,000 shares or 9.96 per cent of the total shares issued) of its shares held to Saudi Aramco. The transfer is effected by Shell Petroleum N.V. selling Shell Japan Holdings B.V. a shareholder in the company, to Aramco Overseas Company B.V., with the transfer expected to be completed in August this year subject to obtaining regulatory approvals. Saudi Aramco has also agreed in principle to acquire an additional 18,840,000 shares in Showa Shell from Royal Dutch/Shell Group subject to satisfaction of certain commercial conditions.
The new partnership builds on the growing relationship between Royal Dutch/Shell Group and Saudi Aramco, bringing global synergies to Showa Shell aimed to provide solid profits based on refined product sales in Showa Shell's markets, and the ability to expand these markets steadily.
Rob Routs, Chief Executive Officer Shell Oil Products, said "Saudi Aramco brings crude supply strength through its scale, crude mix and flexibility and will provide Showa Shell an 'affiliate' supply relationship which brings benefits of economic value and security to Showa Shell."
"Showa Shell will now have the long term commitment and support of two strong global energy shareholders, Royal Dutch/Shell Group and Saudi Aramco, from which it draws a combination of crude supply, refining and marketing strengths, to bolster its future opportunities in and contributions to the Japanese industry," added Mr Routs.
Ab dallah S. Jum'ah, President and Chief Executive Officer of Saudi Aramco, said that Saudi Aramco's decades of experience backing up its lifting, scheduling and delivery of crude oil translates into reliable supply for Showa Shell refineries and retail outlets. "Saudi Aramco's world-class upstream capabilities, as well as our 60 years of refining experience, will generate significant synergy with Showa Shell's strength as a petroleum refining and marketing company in Japan, one of Saudi Aramco's historical core markets in its global crude supply chains."
Mr. Jum'ah, added, "Saudi Aramco also has a long history of successful business alliances with international partners in North America, Europe, the Middle East and the Far East. Mutually beneficial joint ventures have become one of Saudi Aramco's greatest strengths."
For more information see www.shell.com
Posted by Richard Price,
Editor Pipeline Magazine
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