Aramco to Acquire Chile Fuels Retailer

Saudi Arabian Oil Co. (Aramco) has entered a deal with Southern Cross Group to acquire Esmax Distribucion SPA, marking the Saudi energy giant's entry into the South American fuel retail market, it said.

Esmax is the third biggest fuel retailer in Chile managing 279 service stations, as well as 130 convenience stores, according to Southern Cross. Esmax operates in the retail sector under a license from Brazilian state-owned Petroleo Brasileiro SA, while it also holds non-controlling stakes in an oil pipeline and an aviation fuel storage facility at the Santiago Airport, according to Southern Cross.

Aramco did not disclose the value of the 100 percent stake purchase, which it said in a recent press release "unlocks new market opportunities and advances Aramco’s global Downstream expansion". The transaction has yet to receive regulatory approvals, the announcement said.

"Aramco’s planned acquisition of Esmax would be its first Downstream retail investment in South America, recognizing the potential and attractiveness of these markets while advancing Aramco’s strategy of strengthening its downstream value chain", state-owned Aramco said. "This transaction would enable Aramco to secure outlets for its refined products and help expand its retail business internationally. 

"The acquisition would also further unlock new market opportunities for Valvoline branded lubricants, following Aramco’s acquisition of the Valvoline Inc. global products business in February 2023".

Aramco had paid $2.65 billion acquiring New York-listed Valvoline Inc., based in Lexington, Kentucky, according to an Aramco press release March 2 announcing the completion of the acquisition.

Aramco president for downstream Mohammed Y. Al Qahtani said in a statement about the Esmax deal, "This agreement is yet another milestone in our strategy to grow Aramco’s downstream presence globally and expand our retail, lubricants and trading businesses… Esmax is a well-run business in Chile with more than 100 years of experience with quality assets and growth potential".

Aramco already has a presence in Latin America through its majority-owned Saudi Basic Industries Corp., which holds interests in petrochemicals manufacturing in Argentina, Brazil and Mexico. Aramco acquired all of the Saudi government's 70 percent interest in SABIC from the Public Investment Fund in 2020 for $69.1 billion (SAR 259.125 billion), as announced by Aramco June 17 that year.

SABIC holds a 70 percent interest each in Argentina's SABIC High Performance Plastic Argentina SRL and SABIC Innovative Plastics Argentina SRL, Brazil's SABIC Innovative Plastics South America-Industria e Comercio de Plasticos Ltda. and SHPP South America Comercio de Plasticos Ltda. and Mexico's High Performance Plastics Manufacturing Mexico SDRL de CV and SABIC Innovative Plastics Mexico SDRL, according to information posted on Aramco's website.

Earlier Aramco completed its purchase of a 10 percent interest in Rongsheng Petrochemical Co. Ltd. for $3.4 billion (CNY24.6 billion) as part of its downstream expansion in China.

The deal sees Aramco supplying 480,000 barrels per day (bpd) of petroleum from Saudi to what it said is China’s biggest integrated refining and chemicals plant. Rongsheng holds a 51 percent interest in the owner of the plant, Zhejiang Petroleum and Chemical Co. Ltd. The plant can process up to 800,000 bpd of crude and produce up to 4.2 million metric tons of ethylene a year, according to Aramco.

“Our strategic partnership with Rongsheng advances Aramco’s liquids to chemicals strategy while growing our presence in China and showcases our importance as a reliable supplier of crude oil”, Al Qahtani said in a press release July 21 announcing the completion of the acquisition. “This key acquisition is an important part of Aramco’s long-term growth strategy, expanding our presence in a vital market".

To contact the author, email jov.onsat@rigzone.com