This agreement is in line with Saudi Arabia’s long term economic diversification plan, support economic growth and creating employment opportunities.
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Saudi Aramco and Saudi Arabian Basic Industries Corporation (SABIC) have signed a heads of agreement to conduct a feasibility study on the development of a fully integrated crude oil-to-chemicals complex to be located in Saudi Arabia.
The Fund’s target is to acquire approximately 15 Very Large Crude Carriers (VLCCs) over three phases with total investments of up to $1.5 billion composed of debt and equity.
Falih added that the world’s largest oil exporter should own the largest oil shipping company, with a fleet that matches the kingdom’s oil reserves and sales.
The minister also claimed the deal would strengthen Saudi efforts to ensure a secure oil supply to meet rising global demand.
The Organization of Petroleum Exporting Countries (OPEC) expects demand for oil to grow to 33 million barrels a day by 2017, which is 142,000 a day more than the demand recorded in June, reported Bloomberg.
“The additional 15 VLCCs will be on top of the current and future fleet of Bahri that is over 45, and this will make Bahri the world’s largest oil shipping company”, said Saudi Energy Minister Khalid Al-Falih according to Bloomberg.
The agreement signed between the two companies Sunday night in Riyadh said the fund’s duration is for 10 years. Apicorp’s ownership will reach 85 percent of the fund’s capital while Al-Bahari will own 15 percent.
The fund should generate returns of more than 10 percent, Raed al-Rayes, Apicorp’s deputy chief executive officer and general manager, said in an July 17 interview.
Dr. Aabed Bin Abdulla Al Saadoun, Chairman of APICORP said, “We are delighted to be launching this fund in partnership with an esteemed organization like Bahri, a leader in the shipping industry”.
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