RIYADH, 16 December 2007 — Saudi Arabia’s Rabigh Refining and Petrochemical Company (PetroRabigh) will sell shares in its IPO at SR21 ($5.60) per share, a newspaper said.
At that price the company would raise as much as SR4.599 billion, Al-Riyadh newspaper said on Friday.
PetroRabigh, a $9.8 billion joint venture between Saudi Aramco and Japan’s Sumitomo Chemicals, will sell 219 million shares representing a 25 percent stake between Jan. 5 and Jan. 12.
PetroRabigh said the Saudi Capital Market Authority (CMA) has approved the company’s application to hold an initial public offering (IPO).
The landmark offering, which will be open to all Saudi nationals, will open for subscription on Jan. 5 and close on Jan. 12, 2008.
The petrochem company launched in September 2005 as a 50:50 joint venture between Saudi Aramco and Sumitomo Chemical is the largest combined oil refinery and petrochemical production facility ever built at one time. Saudi Aramco will supply PetroRabigh with the feedstock necessary to operate the plant, including ethane, on a long-term, fixed-price basis and will market the refined products produced by PetroRabigh. Sumitomo Chemical will provide petrochemical international sales and marketing expertise, as well as technology licensing.
The massive integrated facility is located at the site of Saudi Aramco’s existing Rabigh refinery, which produces 19 percent of the Kingdom’s current refining capacity.
The existing Rabigh refinery, which was commissioned in 1989, has a current crude processing capacity of 400,000 barrels per day (bpd).
The $10 billion project, located at the Red Sea port of Rabigh, is scheduled for completion in the third quarter of 2008 with commercial operations expected to commence in the fourth quarter of next year.
Upon completion, PetroRabigh will be one of the world’s largest integrated refining and petrochemical complexes and one of the most sophisticated. The plant will combine a low-cost, long-term stable supply of feedstock from Saudi Aramco, the world’s largest oil company, with the petrochemical marketing and technical expertise of Sumitomo Chemical, the Japanese chemical giant.
Benefiting from the supply of extremely competitively priced crude oil, ethane and butane and the strong distribution and marketing networks of its founding partners, PetroRabigh will create new economies of scale that will make it one of the global leaders in the industry.
The partnership of the two blue-chip companies, and their complementary capabilities, provides PetroRabigh with a unique and significant advantage: access to abundant raw materials and next-generation technologies.
The project, company executives said, will further develop the Saudi petrochemical industry and boost the Kingdom’s overall economy.
Chief Executive Officer President and member of the board of directors of Petro Rabigh, Saad Al-Dosari said “our upcoming IPO represents a groundbreaking opportunity for all Saudis to directly participate in the Kingdom’s sustained economic growth and ongoing diversification. Backed by the heritage of Saudi Aramco and Sumitomo Chemical and with a vision of global growth, PetroRabigh is very much a new kind of Saudi company for the new, dynamic and fast-moving Saudi Arabia.”
“While focused on maximizing efficiency and ensuring long-term profitability, we are also extremely keen to contribute to the prosperity and well-being of the people of Saudi Arabia. PetroRabigh is a mega-project that will lead to the creation of in excess of a thousand direct employment opportunities for Saudi citizens and to the creation of new supporting industries. By hiring local graduates and providing job training, we will enrich our community and enhance the commercial reputation of Saudi Arabia as a whole. Today marks the beginning of a new chapter in the Kingdom’s economic history,” he added.
