Saudi Arabia, the world's largest oil exporter, is seeking to build crude sales and expand in Asia as OPEC producers fight for market share in the US.
Ibrahim al-Buainain, formerly in charge of Saudi Arabian Oil Co.’s global energy investments, was appointed head of Saudi Aramco’s Asian operations, based in Beijing, according to Bloomberg. Aramco Asia will become a holding company and run all of Aramco’s ventures in the region.
Global oil prices slid into a bear market last month on speculation that the biggest producers in the Organization of Petroleum Exporting Countries were selling their crude for less than their competitors to maintain market share. Saudi Arabia increased oil prices for Asia next month while offering American buyers another month of reductions. The message from Saudi Arabia to Asia is: “We are here to expand, and we are here to grow together,” Kamel al-Harami, an independent oil-industry analyst and a former president of state-owned Kuwait Petroleum International, said. China is the world’s biggest energy buyer and Saudi Arabia shipped 68 percent of its crude exports to Asia and 19 percent to the US last year, data from the US Energy Information Administration show.
Aramco sold 53.8 percent of its crude to Asian customers, according to its 2013 annual review. Fellow OPEC members, including Iraq and Kuwait, are looking to Asia as well for expansion. Aramco plans $100 billion of investments to become the world’s largest refiner with capacity to process 8 million to 10 million barrels a day of crude at home and abroad. The company has refineries in South Korea and China and it’s in talks to add other plants in China, Indonesia, and Vietnam. Aramco is targeting Asia for expansion as it starts to sell chemicals from its Saudi Sadara plant, a joint venture with The Dow Chemical Co., Aramco Chief Executive Officer Khalid al-Falih said in May in Bahrain.
“Aramco Asia fits very well into this strategy,” al-Harami said. “When you want to sell chemicals, you need to have a single company that can reach all customers across the region.”
