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SABIC to Merge Its Two Fully-owned SADAF, PETROKEMYA

SABIC to Merge Its Two Fully-owned SADAF, PETROKEMYA
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SABIC to Merge Its Two Fully-owned SADAF, PETROKEMYA

SABIC to Merge Its Two Fully-owned SADAF, PETROKEMYA

Saudi Basic Industries Corporation (SABIC) intends to merge its two wholly-owned subsidiaries as part of a strategic transformation plan to increase efficiency and competiveness of its global operations.

SABIC announced on Wednesday its plan to merge Saudi Petrochemical Company (SADAF) and Arabian Petrochemical Company (PETROKEMYA).

All the assets, rights, liabilities and obligations of SADAF will be transferred to PETROKEMYA and it is expected that the merger will be completed during the second half of 2019.

"SABIC’s aim with this merger is to create a more efficient entity which will increase the optimisation of assets and unlock value from the synergies between the two companies’ product streams,” SABIC said.

SADAF will cease to exist as a legal entity as a result of merger.

SADAF operates a complex in Al Jubail, Saudi Arabia, which includes six petrochemical plants with a total production capacity of more than 4m tonnes/year.

PETROKEMYA's products include ethylene, propylene, butene, benzene, butadiene, polystyrene, polyethylene, polyvinyl chloride and acrylonitrile butadiene styrene.

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Oil Prices Ease as Traders Assess US Tariffs and OPEC+ Output Boost

A drone view shows a portion of the crude oil tank farm in Midland, Texas, US June 11, 2025. REUTERS/Eli Hartman/File Photo
A drone view shows a portion of the crude oil tank farm in Midland, Texas, US June 11, 2025. REUTERS/Eli Hartman/File Photo
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Oil Prices Ease as Traders Assess US Tariffs and OPEC+ Output Boost

A drone view shows a portion of the crude oil tank farm in Midland, Texas, US June 11, 2025. REUTERS/Eli Hartman/File Photo
A drone view shows a portion of the crude oil tank farm in Midland, Texas, US June 11, 2025. REUTERS/Eli Hartman/File Photo

Oil prices retreated on Tuesday, having climbed almost 2% in the previous session, as investors assessed the latest developments on US tariffs and a higher than expected increase to OPEC+ output for August.

Brent crude futures fell 12 cents, or about 0.2%, to $69.46 a barrel by 1043 GMT. US West Texas Intermediate crude lost 25 cents, or about 0.4%, to $67.68.

US President Donald Trump began telling trade partners on Monday that sharply higher US tariffs will start on August 1, though he later said that deadline was not 100% firm.

Trump's tariffs have raised uncertainty across the market and concerns that they could have a negative effect on the global economy and oil demand.

While prices seem to be pressured by OPEC+ unwinding its voluntary output cuts, tightness in middle distillates and Houthi attacks on cargo ships are supporting the market, said Rystad analyst Janiv Shah.

On Saturday the OPEC+ group comprising the Organization of the Petroleum Exporting Countries and its allies agreed to raise production by 548,000 barrels per day (bpd) in August, exceeding the 411,000 bpd increases in the previous three months.

Investors were bullish heading into the peak summer demand period in the United States, however, with data from the US Commodity Futures Trading Commission on Monday showing money managers raised their net-long futures and options positions in crude oil contracts in the week to July 1.

Once oil demand declines seasonally, the increase in OPEC+ exports will hit the market, raising downside risks to prices, HSBC analysts said in a note.

Analysts at Commerzbank expect the price of Brent to fall to $65 a barrel on the emerging oversupply in the autumn months.

The decision by OPEC+ removes nearly all of the 2.2 million bpd of voluntary cuts made by the group since 2023.

The producer group is set to approve an increase of about 550,000 bpd for September when it meets on August 3, according sources told Reuters, which would unwind all of the cuts.