Saudi Aramco and Total have signed an agreement to develop a network of retail fuel service stations in Saudi Arabia.
The joint venture (JV) plans to invest around $1 billion over the next six years in the Saudi retail fuel market to provide motorists with premium fuels and retail services in Saudi Arabia.
“This is a major milestone which will help establish a quality retail fuel network in the Kingdom. We look forward to working together with our long-term partner Total and draw on their extensive experience in the retail fuel market,” said Abdulaziz Al-Judaimi, Saudi Aramco’s Senior Vice President of Downstream and Chairman of the JV Board.
He added: “With this new business, we aim to enhance the quality of services, as well as create jobs and additional investment opportunities in the Kingdom. This JV aligns with Saudi Vision 2030 and supports the goals of the Infrastructure and Transportation Initiative under the Quality of Life program. This project is designed to also help optimize the total value of our hydrocarbon resources.”
Momar Nguer, President of Marketing and Services and Executive Committee Member at Total, said: “Total is proud to be the first international major oil company to invest in Saudi Arabia’s fuel retail network. This joint agreement is in line with our strategy to expand in fast-growing markets worldwide.”
The two companies have also signed an agreement with the owners of Tas’helat Marketing Company (TMC) and Sahel Transport Company (STC) to acquire TMC and STC, thereby jointly acquiring their existing network of 270 service stations and their fuel tanker fleet.
Aramco and Total plan to modernize this network and build high-quality service stations at selected locations. This transaction is subject to approval of regulatory authorities.
Ahmed Al-Subaey, Vice President of Marketing, Sales, and Supply Planning and Chairman of the Board of RetailCo., said: “This venture will strive to exceed customer’s expectations. We aspire to become the retailer of choice in Saudi Arabia, providing customers with a unique experience and premium offerings. Saudi Aramco is building on its position as the world’s oil powerhouse and international retail experience, coupled with Total’s experience in this field.”
Al-Subaey emphasized that the decision to acquire TMC came after extensive feasibility studies of the local fuel and retail market and its promising opportunities.
He added: “Our goal is to provide high-quality services that support the tourism industry in the Kingdom and reflect our country’s progress in developing the infrastructure and a reliable service industry.”
The JV will take a phased approach to expanding its network of domestic fuel retail stations, with a plan to reach the goal of owning and operating hundreds of stations by 2021.
