Chinese thinktank facilitates Saudi Aramco's investment decision-making in China
On the evening of March 27th, Shenzhen-listed Rongsheng Petrochemical Co. Ltd ( RongSheng Petrochemical, SZSE: 002493) announced that its controlling shareholder, Rongsheng Holdings, intends to transfer its 1.013 billion shares to Aramco Overseas Company (AOC), a wholly-owned subsidiary of Saudi Aramco, for a total amount of $3.6 billion (approximately RMB 24.6 billion). At the same time, Rongsheng Petrochemical and AOC signed a "Strategic Cooperation Agreement." In this transaction, Saudi Aramco's acquisition price is RMB 24.3 yuan per share, with a premium of 88.23% compared to the closing price of Rongsheng Petrochemical's China A-shares on the day of the announcement (Mar.27th , 2023). This move will significantly expand Saudi Arabia's business in China's refining and petrochemical sectors and strengthen the foundation to harness upon the synergy of resource and technology between the two countries.
On the 26th, this Saudi oil giant also announced that it would spend $12.2 billion (approximately RMB 837 billion) to establish a joint venture with two other Chinese companies in Panjin City, Liaoning Province, and build a large-scale refining and petrochemical complex in northeast China with a daily output of 300,000 barrels.
As a long-term partner of Saudi Aramco in China, GL Consulting (Mysteel's consultancy arm on energy transition), facilitated its investment evaluation and decision-making via on-the-ground insight and data analytics, based on the team's understanding in local industrial and policy environment and characteristics of China's refining and chemical industry. GL Consulting team provides advisory services on more than 200 oil and chemical products for international refining and chemical companies plan to invest in China, helping with their understandings on China's entry barriers, market size, competition landscape, investment costs, potential partners, and downstream market structure, so as to accurately grasp market opportunities and manage risks.
With accumulated experience in the energy and chemicals market, GL Consulting regularly follows up on China's national and local industrial policies and economic performance, and provides regular updates via "China Policy Perspective Monthly" (https://www.mysteel.net/products-services/report-analysis/ ), which provides in-depth interpretation of the main drivers and medium-to-long term impact of those policies affecting industry structures of oil, gas and new energy sectors. It will continue to assist Saudi Aramco and other international companies in understanding and investing in China's energy and chemicals industry.
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