Aramco Completes Acquisition of Chile Fuels Retailer

Saudi Arabian Oil Co. (Aramco) has completed the purchase of Esmax Distribucion SPA from Southern Cross Group, marking the Saudi energy giant's entry into the South American fuel retail market, Aramco said.

“The transaction, which was first announced in September 2023, represents Aramco’s first Downstream retail investment in South America, illustrates the attractiveness of this market, and supports the Company’s strategic goal to strengthen its Downstream value chain”, the state-owned oil giant said in a news release.

Esmax is the third biggest fuel retailer in Chile managing 279 service stations, as well as 130 convenience stores, according to Southern Cross. Esmax says it is a licensee of Brazilian state-owned Petroleo Brasileiro SA. It also holds non-controlling stakes in an oil pipeline and an aviation fuel storage facility at the Santiago Airport, according to information on Southern Cross’ website.

Aramco did not disclose the financial details of the 100 percent stake purchase.

“Aramco aims to be a primary global retail player and this deal combines our high quality products and services, including Valvoline lubricants, with the experience and quality of an established operator in Chile”, Yasser Mufti, Aramco executive vice-president for products and customers, said in a statement.

Aramco acquired Lexington, Kentucky-based Valvoline Inc. last year for $2.65 billion.

The Esmax acquisition provides Aramco with more outlets for its refined products, Aramco said in its acquisition agreement announcement last year.

Aramco already has a presence in Latin America through its majority-owned Saudi Basic Industries Corp., which holds interests in petrochemical plants 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 SAR 259.1 billion ($69.1 billion), as announced by Aramco June 17, 2020.

Elsewhere in its fuel and chemical market expansion Aramco last year completed the purchase of a 10 percent interest in China’s Rongsheng Petrochemical Co. Ltd. for $3.1 billion (CNY24.6 billion).

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, 2023, announcing the completion of the acquisition.

Later it signed agreements securing talks on its bids to acquire stakes in two more Chinese downstream players. Aramco plans to have a 10 percent stake in Shandong Yulong Petrochemical Co. Ltd. and another 10 percent stake in Jiangsu Shenghong Petrochemical Industry Group Co. Ltd.

A memorandum of understanding it announced October 11 proposes that Aramco supply Shandong Yulong with petroleum and other feedstocks.

The agreement for Jiangsu Shenghong Petrochemical also seeks to have the Saudis supply crude oil and other feedstocks to the Chinese operator.

“Aramco and Shenghong Petrochemical also intend to cooperate on the development of a large expansion project, subject to further discussions between the parties and the execution of definitive agreements", Aramco said in a media release September 27.

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