Aramco Leads Raft of Saudi-U.K. Deals During Prince's Visit
(Bloomberg) -- Saudi Arabia’s national oil company signed a batch of deals with U.K. companies including Royal Dutch Shell Plc as Crown Prince Mohammed bin Salman visited the nation in an effort to demonstrate the kingdom is open for business.
Saudi Arabian Oil Co., commonly known as Aramco, was among companies from the kingdom that will undertake joint projects worth at least $2.1 billion stretching from energy to health care and real estate, according to people familiar with the matter. That included collaboration with Shell on natural gas, a crude-oil-to-chemical project with Amec Foster Wheeler Plc, and a partnership with think tank Chatham House, according to a statement on Aramco’s website.
The transactions are happening against a backdrop of rapid economic changes initiated by the prince, who is next in line to the throne in the Middle Eastern monarchy. His more open approach has generated worldwide curiosity about how the largest oil producer in the Organization of Petroleum Exporting Countries will now approach its energy sector. Saudi Aramco, known for closely guarding information about its business, intends to list on public exchanges this year.
U.K. officials weren’t expecting a decision during the visit on whether London could be chosen to host the initial public offering. British companies signed 18 memorandums of understanding, the people said. Five were linked to Aramco while the others cover a range of sectors, from a pharmaceutical joint venture to an agreement for the kingdom to host an international golf championship.
In a statement, Shell said the agreement with the Saudi state oil company “relates to the work we are doing together to support Aramco’s gas ambitions.”
Aramco is set to join the shale revolution with plans to start producing unconventional natural gas this month and exploit a deposit that could rival the Eagle Ford formation in Texas.
“This memorandum of understanding is testament to our strong bond with Saudi Aramco and our long-standing relationship with Saudi Arabia that goes back more than 75 years,” Shell said Thursday.
Aramco has been a “major corporate member” of Chatham House since 2002 and they will look at new ways to build on the partnership “with a particular focus on future cooperation on assessing changes in global and national energy markets and policies,” according to the text of the memorandum, provided by Chatham House.
In addition to the Shell and Amec partnerships, Aramco signed a corporate purchase agreement with Varel International Energy Services for equipment and services used in well drilling, the people said. It also plans to collaborate with Imperial College London and the Welding Institute on “advanced materials and non-metallic innovation.”
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