Saudi Aramco and Sinopec Sign MOU
Wednesday, July 02, 2008
Saudi Aramco and China Petrochemical Corporation met in Dhahran on June 23 to sign a Memorandum of Understanding (MOU) in a mutual effort to deepen the existing cooperation between the two companies and strengthen their relations and business development opportunities.
The MOU was signed by Saudi Aramco president and CEO Abdallah S. Jum’ah and Sinopec president Su Shulin, reaffirming the interest of the two companies to continue exploring further opportunities that will support their current joint ventures and the strategic cooperation that binds them together.
Jum‘ah explained that the MOU is aimed at revitalizing the relations between Saudi Aramco and Sinopec, reflecting both China’s view of the crucial role of Saudi oil in the world as well as the Kingdom’s view of China’s crucial role in the global economy.
Shulin agreed that signing the MOU constitutes the beginning of a new era between the two companies, referring to his aspirations to expand current joint operations, and expressed his appreciation for all the cooperation given by the governments of China and the Kingdom.
The two companies have enjoyed a long history of fruitful cooperation. In 2004, Saudi Aramco ventured with Sinopec into the south of the Empty Quarter desert in the search for natural gas. The companies also formed a joint venture in general oil and gas services as well as engineering services related to refining and petrochemicals.
In China last year, the two sides founded the Fujian Refining & Petrochemical Company Ltd. (FREP) and the Fujian Sinopec SenMei (Fujian) Petroleum Company Ltd., striving to fully integrate production and marketing in the areas of refining and petrochemicals and achieve commercial success in the global market.
Saudi Aramco and Sinopec also agreed to continue exploring for more potential economical opportunities on which to collaborate in hopes of achieving great benefits for both China and the Kingdom.
The volume of crude oil trade between the two parties has been steadily increasing. In 2007, Sinopec imported nearly 23 million tons of crude oil from Saudi Aramco at an average of 460,000 barrels per day (bpd). With the current expansion of Fujian Refinery, Sinopec will be looking this year to import 32.4 million tons at an average of 650,000 bpd.
It is expected that by 2010, the average rate will increase to 1 million bpd, as per an MOU signed between the companies in 2006, and by 2015, the rate will reach 1.5 million bpd.