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Sunday, 08 November 2009 07:31 UAE time

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Exxon pulls out of Aramco joint venture

by This email address is being protected from spam bots, you need Javascript enabled to view it  on Wednesday, 07 November 2007

US oil giant Exxon Mobil has sold its 30% stake in an oil lubricants joint venture with Saudi Aramco to Riyadh-based Jadwa Investment, Aramco announced on Tuesday.

Aramco said the end of the 31-year partnership with Exxon on Saudi Aramco Lubricating oil Refining Company (Luberef) will not impact the companies’ other joint ventures in the kingdom or abroad, but gave no reason for the sale.

Exxon also has interests in Saudi Aramco Mobil Refinery Company (Samref) and the Fujian Refining and Ethylene Joint Venture Project in China.

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No jobs cuts are expected following the deal, with Jadwa stating it plans to expand Luberef’s operations, creating additional jobs for Saudis.

“Jadwa's new partnership with Saudi Aramco and our common interest in growing Luberef will meet national policy goals of job creation for Saudis and expansion of private sector involvement," Jadwa Chairman Prince Faisal bin Salman bin Abulaziz said in a statement.

Luberef operates refineries in Jiddah and Yanbu that produce lubricating base oils. The combined design capacity of Luberef’s two refineries is 550,000 tonnes per year.

Jadwa said it plans to enter into more partnerships similar to that with Aramco on Luberef in the near future.

“We certainly plan to enter into other investments on a case by case basis as we determine what to be appropriate for us and our clients' investment strategies,” said Brad Bourland, head of research at Jadwa.

The financial details of the deal, which is subject to regulatory approval, were not disclosed.

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