Saudi Aramco says will launch first branded gas station in Pakistan by year end

This picture shows Aramco tower at the King Abdullah Financial District in Riyadh. (AFP/File)
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Updated 11 September 2024
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Saudi Aramco says will launch first branded gas station in Pakistan by year end

  • Aramco completed acquisition of 40 percent stake in Gas & Oil Pakistan Ltd. in May
  • In April, Kingdom reaffirmed commitment to expedite Pakistan’s investment package of $5 billion

ISLAMABAD: Saudi oil giant Aramco said on Wednesday it would launch its first branded retail gas station in Pakistan by the end of the year, having already completed the acquisition of a 40 percent stake in Gas & Oil Pakistan Ltd. (GO) in May.

Aramco is a global integrated energy and chemicals company that produces approximately one in every eight barrels of the world’s oil supply. GO, one of Pakistan’s largest retail and storage companies, is involved in the procurement, storage, sale and marketing of petroleum products and lubricants.

“We are working to launch our first Aramco-branded gas station in Pakistan by the end of the year,” the Saudi oil company’s media department told Arab News in an emailed statement. “Will share more information when the site is commissioned.”

A Pakistan Board of Investment (BOI) official said Aramco’s acquisition of GO represented the oil giant’s first downstream retail investment in Pakistan and signaled the company’s growing retail presence in high-value markets. 

In March, Aramco also acquired a 100 percent equity stake in Esmax Distribución SpA, a leading diversified downstream fuels and lubricants retailer in Chile.

“Our global retail expansion is gaining pace and this acquisition [of GO] is an important next step on our journey,” Yasser Mufti, Aramco Executive Vice President of Products & Customers, said in a statement in May when the GO deal was completed. 

“Through our strategic partnership with GO, we look forward to supplying Aramco’s high-quality products and services to valued customers in Pakistan. We are also delighted to welcome another high-caliber addition to Aramco’s growing network of global partners, and look forward to combining our resources and expertise to unlock new opportunities and further grow the Aramco brand overseas.”

Pakistan and Saudi Arabia enjoy strong trade, defense and cultural ties. The Kingdom is home to over 2.7 million Pakistani expatriates and serves as the top source of remittances to the cash-strapped South Asian nation.

In February 2019, Pakistan and Saudi Arabia inked investment deals totaling $21 billion during a visit by Saudi Crown Prince Mohammed bin Salman to Islamabad. The agreements included about $10 billion for an Aramco oil refinery and $1 billion for a petrochemical complex at the strategic Gwadar Port in Balochistan.

Both countries have been working in recent months to increase bilateral trade and investment, and the Kingdom in April this year reaffirmed its commitment to expedite an investment package worth $5 billion for Pakistan.


Saudi Arabia’s Bahri Chemicals set for 56.9% cargo transportation surge in 2024

Updated 08 October 2024
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Saudi Arabia’s Bahri Chemicals set for 56.9% cargo transportation surge in 2024

  • Fleet expansion and rising demand is fueling the increase, company’s president tells conference

RIYADH: Cargo transported by Bahri Chemicals is set to hit 9.1 million tonnes this year — a 56.9 percent rise from 2022, according to a top official.

During a keynote session at the 19th ICIS Middle Eastern Base Oils and Lubricants Conference in Riyadh, Faisal Al-Husseini, president and board member of the firm, noted fleet expansion and rising demand was fueling the increase.

Bahri Chemicals was launched in 1990 and is a joint venture between Saudi Basic Industries Corp. and Bahri — the national shipping carrier of Saudi Arabia.

Al-Husseini said: “Bahri Chemicals is seeking to continue its growth and expand its fleet, and we intend to focus on the types of vessels that can transit through the Red Sea, because they add the most value to our customers.”

As well as reflecting on Bahri Chemicals’ growth, the official used his address to flag up the challenges to vessels caused by tensions in the Red Sea.

He said the company estimates the total cost of disruption to global shipping through the Bab Al-Mandab Strait since November has reached $323 billion and is “increasing every day.”

Concerns over the using the shipping lane increased dramatically at the end of 2023, when Houthi militants stepped up attacks on vessels in the wake of the escalation of the Israel-Hamas conflict. 

Al-Husseini stated that Bab Al-Mandab Strait — the narrowest entry point to the Red Sea — is a critical choke point for global trade.

“With the attacks on shipping, we’re seeing the majority of ship owners avoiding the Bab Al-Mandab Strait, going a much longer route around the Cape of Good Hope in order to reach their destinations. In so doing, disrupting supply chains in the region,” Al-Husseini said.

The official compared the impact of recent disruptions in the Red Sea to the Ever Given incident that blocked the Suez Canal in March 2021.

While that blockage lasted just six days and cost the global economy $6-$10 billion per day, the Red Sea disruptions have lasted nearly 11 months.

“To date, at the time of preparing this presentation, there were 100 incidents that have been reported of attacks on civilian merchant vessels transiting the Red Sea,” Al-Husseini said.

He continued: “Today, that number is actually higher. It’s 103 incidents ranging in severity from threats or hostile warnings to actual attacks on vessels where there have been civilian casualties and damage to the vessels.”

Al-Husseini ended his address with a warning, saying: “The attacks against shipping in the Red Sea is ongoing, and it remains severe. I wish I could give you some good news and tell you that it’s improving, but with the ongoing geopolitical turmoil that we see, it is actually becoming more severe.”

During the opening remarks of the conference, Majed Hindi Al-Uteibi, deputy minister for oil and gas and regulatory affairs, stated that the Ministry of Energy is looking to secure international investors to help develop local expertise and increase localization.

He said government departments were working with the Royal Commission for Jubail and Yanbu, the National Industrial Development Center, Luberef, and international investors to develop the Lubricants Value Park at Yanbu.

This facility was launched in February 2020 by Saudi Aramco Base Oil Co., also known as Luberef, which is 70 percent owned by Saudi Aramco, while Jadwa Industrial Investment Co. holds the remaining 30 percent stake.

“The Ministry of Energy is working through this special team to localize new technologies in this sector and attract global investors to transform the Kingdom into the largest manufacturer and exporter of these products,” Al-Uteibi said.

Al-Uteibi explained that this will help increase localization rates and meet the growing local and regional demand for these products.

“Saudi Arabia is also positioning itself as a logistical hub for the region, supported by its strategic location, which comes at the crossroads of economic interdependence and trade flows,” Al-Uteibi said.

He continued: “This unique positioning is creating a growing local demand for fit-for-purpose lubricants, reinforcing the Kingdom’s position as a key player in the global lubricants market.”

He further highlighted the potential and growth of the global lubricants market, valued at $140 billion in 2023 and expected to grow at an annual rate of 3.8 percent through 2030.

“Those numbers are more than just figures – they represent the momentum of our industry and the vast opportunities that lie ahead. It is a call for action by all of us to push the boundaries beyond what is possible today and to be at the forefront of innovation,” Al-Uteibi said.

Saudi Arabia’s Vision 2030 aims to position the country as a global leader in industries such as lubricants and base oils.

He stressed that several sectors, including mining and industrial manufacturing, are expected to experience significant growth, helping to enhance the Kingdom’s leadership in the lubricants market.

“The renewable energy sector is also emerging as a key area of focus for us, with the expansion of renewable energy projects in the Kingdom,” Al-Uteibi said.

He continued: “This growth will drive demand for lubricants designed to improve the efficiency and durability of wind turbines, ensuring sustainable and reliable energy production.”

These developments reflect Saudi Arabia’s commitment to energy diversification and industrial advancement.


Bahrain’s economy grows 1.3% in Q2, ministry report reveals

Updated 08 October 2024
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Bahrain’s economy grows 1.3% in Q2, ministry report reveals

  • Overall GDP was affected by a 6.7% decline in the oil sector’s GDP compared to the same period last year
  • Real GDP growth is projected to accelerate to 3.8% in 2025

RIYADH: Growth in Bahrain’s non-oil sectors boosted its economy by 1.3 percent year-on-year, reaching 3.7 billion dinars ($9.8 billion) in the second quarter of this year, according to newly released figures.

Issued by the country’s Ministry of Finance and National Economy, citing preliminary data from the Information and eGovernment Authority, the newly released report shows that non-oil gross domestic product grew by 2.8 percent during the period and contributed more than 85 percent to the overall GDP. 

The analysis further indicated that the Gulf country’s overall GDP was affected by a 6.7 percent decline in the oil sector’s GDP compared to the same period last year.

The rise reflects Bahrain’s diversification efforts, aligning with the country’s Economic Vision 2030, a comprehensive development plan to transform the economy.

Being one of the most indebted economies and a small oil producer in the region, Bahrain has introduced reforms to facilitate doing business, create more jobs, and attract foreign investment to boost economic growth.

The Ministry of Finance expects Bahrain’s economy to grow by 3 percent in 2024, driven mainly by non-oil sectors as the government accelerates efforts to diversify sources of income and economic sectors away from hydrocarbons. 

The growth will be driven primarily by a diverse range of non-oil activities, which is forecasted to expand by 3.8 percent during this year.

Looking ahead to 2025, real GDP growth is projected to accelerate to 3.8 percent. The non-oil activities are anticipated to experience an even stronger expansion of 4.5 percent during 2025, as expected progress around the Bapco Modernization Program will be fully seen.

The program’s objective is to increase refining capacity and improve energy efficiency, with a vision of becoming one of the most competitive and environmentally compliant oil refineries regionally, providing a solid foundation for realizing the country’s Vision 2030. 

Bahrain’s real GDP grew by 3.3 percent year on year in the first quarter of 2024, according to a government report released at the time. 

National accounts estimates issued by the Information and eGovernment Authority at the time showed that the Gulf state’s non-oil GDP rose by 3.3 percent during that period, contributing about 85.9 percent of GDP.  

The report added that oil GDP grew 3.4 percent, with accommodation and food services, financial activities, and insurance among the best-performing sectors.

The economies of the Gulf Cooperation Council countries have demonstrated positive performance in non-oil activities during the year despite the global challenges, while oil activities declined due to supply cuts implemented by OPEC+. However, factors such as interest rate cuts and the gradual increase in oil production are expected to persist in GCC countries.


Saudi expat remittances see 10% growth to reach $3.16bn

Updated 08 October 2024
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Saudi expat remittances see 10% growth to reach $3.16bn

  • Transfers sent abroad by Saudi nationals rose by 19% year on year, totaling SR5.83 billion
  • Kingdom ranks among the largest remittance-sending countries globally, says US State Department

RIYADH: Expatriate remittances from Saudi Arabia reached SR11.86 billion ($3.16 billion) in August, marking a 10 percent annual increase, according to recent data. 

Figures from the Saudi Central Bank, also known as SAMA, also revealed that transfers sent abroad by Saudi nationals rose by 19 percent year on year, totaling SR5.83 billion. 

As one of the world’s largest sources of remittances, Saudi Arabia plays a crucial role in shaping the financial well-being of millions of households worldwide. 

With nearly 75 percent of the Kingdom’s labor force consisting of foreign workers, Saudi Arabia’s policies and job market conditions significantly influence the flow of remittances, highlighting not just the country’s economic strength but also its deep interconnectedness with the global financial system. 

This relationship underscores how labor migration and cross-border financial support have become vital for communities far beyond Saudi borders. 

According to the US Department of State, the Kingdom ranks among the largest remittance-sending countries globally, benefiting from an open financial system with no restrictions on converting or transferring funds related to investments, including dividends or earnings. 

This regulatory environment enables a seamless flow of money across borders, eliminating delays in sending funds through legal channels. 

At the heart of this remittance system is the Wage Protection System, implemented by the Ministry of Human Resources and Social Development. This system ensures that expatriate workers, who are the backbone of the remittance ecosystem, receive their wages as per their contracts. 

Employers are required to transfer wages through local Saudi bank accounts, giving expatriates easy access to their earnings for remittance to their home countries. 

The transparency provided by this system not only protects workers’ rights but also offers an efficient legal framework for expatriates to support their families abroad. 

The rise of digital platforms, independent of traditional banks and exchange houses, has also driven growth in the sector.  

With widespread smartphone and Internet access, digital remittances have become more accessible, allowing users to send funds anytime, anywhere. These platforms offer advantages such as competitive exchange rates, lower fees, and faster processing times, enabling near-instant access to funds for recipients. 

Financial institutions and fintech companies have further contributed by developing innovative solutions, including mobile apps and digital wallets. 

Additionally, supportive regulations from Saudi and regional authorities have created a secure environment for digital services, fostering competition while protecting user interests. 


Closing Bell: Saudi main market closes in green at 12,027

Updated 08 October 2024
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Closing Bell: Saudi main market closes in green at 12,027

  • MSCI Tadawul Index also saw an increase, gaining 16.72 points to end the day at 1,508.72
  • Parallel market faced a setback, dropping 105.82 points to close at 24,543.25

RIYADH: The Tadawul All Share Index in Saudi Arabia experienced a positive surge on Tuesday, rising by 113.55 points, or 0.95 percent, to close at 12,027.17.

The benchmark index recorded a total trading turnover of SR8.22 billion ($2.19 billion), with 111 stocks gaining ground while 116 declined.

The MSCI Tadawul Index also saw an increase, gaining 16.72 points to end the day at 1,508.72. In contrast, the parallel market faced a setback, dropping 105.82 points to close at 24,543.25.

A significant factor in the main index’s performance was the impressive 29.97 percent surge in Al Majed Oud Co.’s share price, which reached SR158.80. Other notable performers included Al-Baha Investment and Development Co., whose shares rose by 9.09 percent to SR0.36, and Fawaz Abdulaziz Alhokair Co., with a 7.19 percent increase to SR10.58.

Dar Alarkan Real Estate Development Co. saw its share price hit an all-time high of SR14.58 during the day, the highest since October 2022. It closed at SR14.54, marking a 5.82% increase from the previous session.

On the downside, Saudi Fisheries Co. was the worst performer, with its share price declining by 4.19 percent to SR27.45.

Additionally, Arabian Mills for Food Products Co. began trading on Tadawul on Oct. 8, marking the 10th listing on the Kingdom’s main market this year. The food company started trading at SR66 but closed Tuesday’s session at SR65.80, a decrease of 0.30 percent.

On the announcements front, United Electronics Co., known as eXtra, reported a net profit of SR356.7 million for the first nine months of the year, representing a 34.91 percent increase compared to the same period in 2023.

The company attributed this growth to increased retail segment sales driven by stable demand in the Saudi market. Following the announcement, eXtra’s share price rose by 2.96 percent to SR93.90.

Tamkeen Saudi Human Resources Co. has announced plans for an initial public offering to list its ordinary shares on Tadawul.

The company will offer 7.9 million shares, which constitutes 30 percent of its total issued shares. The final share price will be set after the order book-building period concludes.

Tamkeen is 25 percent owned by Sulaiman Al Habib Medical Services Group, which is also listed on Tadawul. Headquartered in Riyadh, Tamkeen provides human resources and domestic work services across nine branches in Saudi Arabia.


Saudi cement exports reach 8.48m tonnes in 2023 as industry eyes sustainable growth

Updated 08 October 2024
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Saudi cement exports reach 8.48m tonnes in 2023 as industry eyes sustainable growth

  • In 2023, foreign sales of the resource reached over 8.48 million tonnes
  • Launch of City Cement Co.’s sustainability report marks a significant step toward a more eco-conscious future for the sector

RIYADH: Saudi Arabia’s cement and clinker exports have stayed above 8 million tonnes for four years in a row — double the amount recorded in 2018, according to the latest figures.

New data showed that in 2023, foreign sales of the resource reached over 8.48 million tonnes.

The Minister of Industry and Mineral Resources, Bandar Alkhorayef, emphasized this during the launch of “Madinah Cement Co’s” first sustainability report, reported the Saudi Press Agency.

During the launch, Alkhorayef discussed the Kingdom’s position as the leading cement producer in the Arab world and the 10th largest globally, with an annual production capacity exceeding 80 million tonnes. 

Saudi Arabia’s cement industry is supported by 20 factories across the country. 

The minister said that domestic demand for cement reached approximately 47.3 million tonnes in 2022, driven by ongoing large-scale development projects. With construction sector investments expected to hit SR6 trillion ($1.6 trillion) by 2030, demand is projected to rise further.

Alkhorayef emphasized the efforts of leading companies to adopt the latest manufacturing technologies, which improve production efficiency. Several firms have recently upgraded their production lines to enhance the quality of products.

Saudi Arabia’s cement industry is vital in supporting the Kingdom’s ambitious Vision 2030 initiatives, including NEOM, the Red Sea Project, and Qiddiya. 

These undertakings, aimed at diversifying the economy away from oil dependency, are driving significant demand in the construction and infrastructure sectors, leading to a surge in the consumption of building materials such as cement.

This positions the Kingdom as a key player in the regional and global cement markets, meeting domestic needs and increasing exports to international markets, reflecting the sector’s competitive edge.

Alkhorayef further outlined the ministry’s strategic recommendations to make the cement sector more sustainable. These undertakings, developed in collaboration with relevant authorities, include the Industrial Competitiveness Program and the Liquid Fuel Displacement Program. 

Their implementation is expected to boost energy efficiency, lower production costs, and reduce carbon emissions, particularly within the cement sector. 

The minister also mentioned an initiative involving the Cement Companies National Committee, King Abdullah University of Science and Technology, and other stakeholders to research to minimize industry carbon emissions and produce environmentally friendly cement.

The launch of City Cement Co.’s sustainability report marks a significant step toward a more eco-conscious future for the sector. The study highlights the firm’s efforts to convert waste into alternative fuels for cement production and its recent agreement with a leading company to incorporate green technologies. 

The release of the inaugural sustainability report aligns with the Vision 2030 goals, reinforcing the organization’s role as a responsible leader in the sector. 

It also outlines tangible governance, social responsibility, and environmental protection initiatives, further enhancing its reputation as a company that adheres to global best practices.