Aramco Inks Energy Cooperation Agreement with Petrovietnam

Saudi Arabian Oil Co. (Aramco) and Vietnam Oil and Gas Group (Petrovietnam) have signed an agreement to explore opportunities across the oil and gas value chain.

“It paves the way for potential cooperation spanning the storage, supply and trading of energy and petrochemical products”, Aramco said in a statement.

“This agreement lays the foundation for potential collaboration across the hydrocarbon value chain”, added the statement on Aramco’s website. “We look forward to exploring multiple opportunities with Petrovietnam that complement Aramco’s global downstream ambitions, contribute to Petrovietnam’s own strategy, and reinforce Asia’s importance in global energy and petrochemicals markets”.

The agreement between the state-owned companies was signed during a visit to the kingdom by Vietnamese Prime Minister Pham Minh Chinh.

During the visit, the premier called on Saudi Arabia to help Vietnam build a petroleum storage and distribution hub for Southeast Asia, according to government newspaper Bao Chinh phu.

The visit also saw the countries sign a memorandum of understanding “to establish a long-term mechanism for cooperation in trade, industry, investment, digital economy”, according to the newspaper.

In another new agreement, Aramco said it will study potential collaboration with Riyadh Air on low-carbon fuel supply and other areas.

“Both companies have expressed a desire to adopt latest technologies, elevate experiences and contribute to sustainability objectives”, Yasser M. Mufti, Aramco executive vice president for products and customers, said in a company statement. “Aramco’s work to develop lower-carbon fuels, its strong focus on digitalization, and its aviation experience, among other things, provide a strong platform for potential cooperation with Riyadh Air”.

Adam Boukadida, Riyadh Air chief financial officer, said, “Our partnership with Aramco aligns perfectly with our ambition to become a leading global airline committed to sustainability and low-carbon fuels”.

Separately, Aramco announced an agreement with fintech firm Taulia to jointly establish a financing platform for Aramco’s suppliers.

“The entities are joining forces to establish one of the world’s largest supply chain financing programs, which aims to provide an alternative and affordable source of financing for Aramco’s suppliers”, an Aramco press release said.

“The financing solution aims to unlock billions of Saudi Riyals in liquidity, enabling suppliers to optimize working capital, gain access to alternative financing, and strengthen business relationships”, Aramco said.

“Together with our partners, we are introducing this FinTech solution for our suppliers, offering them an access to a unique and competitive financing opportunity”, said Aramco chief financial officer and vice president for finance Ziad T. Al-Murshed. “This platform also provides an investment opportunity for banks to participate as finance providers, enhancing the solution’s scale and viability”.

Cedric Bru, chief executive of SAP SA company Taulia, said, “The deal establishes one of the world’s largest supply chain financing programs, and will provide an opportunity to access early payments for thousands of companies”.

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