Merger Talks between 2 Saudi Petrochemical Firms Resume after 10 Years

Part of the Saudi Petrochem projects that are engaged in merger talks with the Saudi Industrial Investment Group. Asharq Al-Awsat
Part of the Saudi Petrochem projects that are engaged in merger talks with the Saudi Industrial Investment Group. Asharq Al-Awsat
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Merger Talks between 2 Saudi Petrochemical Firms Resume after 10 Years

Part of the Saudi Petrochem projects that are engaged in merger talks with the Saudi Industrial Investment Group. Asharq Al-Awsat
Part of the Saudi Petrochem projects that are engaged in merger talks with the Saudi Industrial Investment Group. Asharq Al-Awsat

Talks to merge two Saudi petrochemical companies, which had been frozen for nearly 10 years, have resumed.

Saudi Industrial Investment Group (SIIG) and the National Petrochemical Company (Petrochem) announced Sunday that they have begun talks over a potential merger.

The SIIG and Petrochem boards have approved initial discussions to study the feasibility of a merger but no agreement has been reached on any final structure of a merged entity, the companies said in separate statements.

They pointed out that if a deal is reached, it will be subject to the conditions and approvals of competent authorities, as well as the extraordinary general assembly of both companies.

SIIG owns 50 percent of Petrochem, but the two firms are similar in size, suggesting a deal would be a merger of near equals.

The two companies previously held merger discussions in 2011, with the talks eventually postponed to allow Petrochem’s facility at Jubail to reach production capacity and provide better valuations of the companies, SIIG said back then.

The Riyadh-based Petrochem has paid-up capital of SAR4.8bn riyals. It owns 65 percent of the Saudi Polymer Co, which permanently closed down its polystyrene (PS) manufacturing plant at the Jubail petchems complex in July and produced petrochemical products.

Arabian Chevron Phillips Petrochemical Co., wholly owned by CPChem, owns the remainder of Saudi Polymers Co.



Oil Steadies as Market Awaits Fresh US Tariffs

FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
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Oil Steadies as Market Awaits Fresh US Tariffs

FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo

Oil prices were little changed on Wednesday as traders remained cautious ahead of US tariffs due to be announced at 2000 GMT, fearing they could exacerbate a global trade war and dampen demand for crude.

Brent futures were down 7 cents, or 0.09%, at $74.42 a barrel by 0858 GMT. US West Texas Intermediate crude futures fell 5 cents, or 0.07%, to $71.15.

The White House confirmed on Tuesday that President Donald Trump will impose new tariffs on Wednesday, though it provided no detail on the size and scope of the trade barriers, according to Reuters.

Trump's tariff policies could stoke inflation, slow economic growth and escalate trade disputes.

"Crude prices have paused last month's rally, with Brent finding some resistance above $75, with the focus for now turning from a sanctions-led reduction in supply to Trump's tariff announcement and its potential negative impact on growth and demand," said Ole Hansen, head of commodity strategy at Saxo Bank.

Traders will be watching for levies on crude imports, potentially driving up prices of refined products, he added.

For weeks Trump has touted April 2 as "Liberation Day", bringing new duties that could rattle the global trade system.

The White House announcement is scheduled for 4 p.m. ET (2000 GMT).

"The balance of risk lies to the downside, given that weaker than expected tariff measures are unlikely to drive a significant rally in Brent, while stronger than expected measures could trigger a substantial selloff," BMI analysts said in a note.

Trump has also threatened to impose secondary tariffs on Russian oil and on Monday he ramped up sanctions on Iran as part of his administration's "maximum pressure" campaign to cut its exports.

"Markets likely to be volatile ahead of the final announcements on tariffs and the scale of them. The threat of secondary tariffs on Russian crude continues to provide some support for prices, with more downside risk at present around tariff uncertainty," said Panmure Liberum analyst Ashley Kelty.

US oil and fuel inventories painted a mixed picture of supply and demand in the world's biggest producer and consumer.

US crude oil inventories rose by 6 million barrels in the week ended March 28, according to sources citing the American Petroleum Institute. Gasoline inventories, however, fell by 1.6 million barrels and distillate stocks were down by 11,000 barrels, the sources said.

Official US crude oil inventory data from the Energy Information Administration is due later on Wednesday.