SABIC and Shell signed an agreement in Jubail, Saudi Arabia, today under which SABIC will acquire Shell's 50 percent share in the Saudi Petrochemical Company (Sadaf), a joint venture located in Jubail, for approximately US$820 million. Commenting on the agreement, Prince Saud bin Abdullah Al-Thenayan, President of the Royal Commission for Jubail and Yanbu and Chairman of SABIC, said that SABIC is about to start a new chapter in its history with the beginning of the process to acquire the full ownership of Sadaf, one of the largest petrochemical companies in the Middle East. He said that Sadaf is a product of a successful partnership and is one of the oldest joint ventures between SABIC and Shell over the past four decades. The agreement was signed on behalf of SABIC by Yousef Al-Benyan, SABIC Vice Chairman and CEO, and Graham van't Hoff, Executive Vice President Chemicals, Shell. Prince Saud said, "I would like to stress that our relationship will not end today. We in SABIC are looking forward to working with Shell on future projects in the interest of both parties. For us in SABIC, this change means continuing to focus on Sadaf's customers, in addition to investing in advancing technology to build new development platforms in the Kingdom and around the world." Prince Saud valued the leading role of SABIC and Shell in qualifying talented national cadres to lead Sadaf skillfully and efficiently, taking the company to the highest position among petrochemical companies in the Middle East. The two companies made Sadaf one of the most diversified companies in producing chemicals and aromatics, and producing the most qualified leaders in SABIC who became presidents of a number of SABIC affiliates due to the professional experience they gained in Sadaf. The Sadaf joint venture encompasses six world-scale petrochemical plants with a total output of more than 4 million metric tons per year. This announcement marks an early termination of the joint venture agreement, which was due to expire in 2020. This acquisition will enable SABIC to further optimize operations at Sadaf and further invest in the facilities, integrating them with SABIC's other affiliates. This step will allow Shell to focus its downstream activities and make selective investments to support the growth of its global chemicals business. Yousef Al-Benyan, SABIC Vice Chairman and CEO, said, "Since SABIC's early days, we have enjoyed a strong relationship with Shell Chemicals. We are confident that our journey of partnership together will continue and grow in strength. With this transaction SABIC is looking to capitalize on synergy opportunities of Sadaf with other affiliates, and improve its operation and profitability." Graham van't Hoff, Executive Vice President Chemicals, Shell, said: "Our partnership with SABIC, spanning more than thirty years has been a great success story. We're proud to have established together one of the first petrochemical ventures in Saudi Arabia - it has grown substantially since the start in 1986. We will continue to explore potential future opportunities with SABIC." He added that the key achievements of this successful partnership was represented in qualifying Saudi manpower who proved their success and distinguished performance in operating and managing Sadaf's plants both efficiently and confidently at the highest level of quality and safety. The transaction is subject to regulatory approval and is expected to complete later this year.
