Saudi Arabia, the world’s top oil exporter, plans to discuss energy cooperation agreements with China and Japan, the Saudi cabinet said on Monday.
“The cabinet has approved to delegate a number of ministers to discuss with the Chinese side the following projects: a memorandum of understanding (MOU) to cooperate in the energy sector; an initial cooperation memorandum in the field of crude storage,” a cabinet statement on state news agency SPA said.
Discussions with Japan for an MOU for cooperating in the energy sector were also approved by the cabinet, SPA said.
Saudi Arabia has traditionally accounted for most of the crude imports by Asia, the world’s biggest oil-consuming region.
But recently OPEC’s top producer has lost ground in a number of major markets including Russia and China, and faces a further threat from Iran, which is ramping up exports after the removal of Western sanctions.
The kingdom, however, has responded by pumping and shipping more oil, and with knockdown prices in Asia from state oil giant Saudi Aramco.
In 2015, Asia accounted for 65 per cent of Saudi Aramco’s oil exports; an increase from 62.3 per cent a year earlier.
Aramco has been in talks with China’s CNPC and Sinopec for investment opportunities in refining, marketing and petrochemicals, Saudi Energy Minister Khalid al-Falih said earlier this year.
Saudi and Japanese officials had discussed in June possible Japanese investments into the planned initial public offering (IPO) of Aramco.
Saudi Arabia’s deputy crown prince, Mohammed bin Salman, unveiled ambitious plans earlier this year aimed at ending the country’s “addiction” to oil and transforming it into a global investment power. An IPO of less than 5 per cent of state-run Aramco is a centrepiece of that effort.
So big is Aramco given its rights to the crude reserves of Saudi Arabia, that selling even 1 per cent of it would create the world’s biggest IPO, Prince Mohammed has said. He expects the IPO will value Aramco at least at $2 trillion.