Saudi Aramco, the world's largest oil and gas producer, is looking at further opportunities to invest in China, where oil demand has been robust and is growing, according to the company's top executive.
Aramco has been ramping up its presence in China, the world's largest crude oil importer and the second-largest crude oil consumer, in a series of refining and petrochemicals deals, some of them with crude offtake agreements attached.
"In the early part of 2024, demand has been healthy and is growing in China," Amin H. Nasser, president and CEO of Aramco, said on a media call following the announcement of its full-year 2023 financial results, which revealed the second-highest-ever net profit at $121.3 billion.
Nasser further said Aramco was currently looking at fresh opportunities for investment in China, where refineries are among the most fully integrated and have the highest conversion rates.
Nasser said he expected the global oil market to remain healthy throughout 2024, putting demand for 2024 at 104 million barrels a day as against an average of 102.4 million barrels in 2023.
"We expect it to be fairly robust," he said.
Luo Zuoxian, head of intelligence and research at the Sinopec Economics and Development Research Institute, said China, with a stable economic recovery, sound long-term economic prospects and improving business environment, will remain a key growth engine for the world economy as well as a valuable destination for foreign direct investment.
Multinational energy companies' expansion in the energy sector in China is expected to strengthen their position as leading contributors to the country's green transition, Luo said.
The scale of the industrial footprint and China's demand growth present significant opportunities for multinational energy companies like Aramco, he said.
The collaboration between Aramco and China's energy industry is mutually complementary and sets an exemplary precedent for future collaboration between China and petroleum-exporting countries, he said.
In Aramco's view, demand for petroleum products in China is recovering robustly, especially in the transport and petrochemical sectors, driven by robust demand for chemicals. So, the company has been actively expanding its downstream presence in China to support the country's energy security while facilitating its green transition.
Aramco announced last year its partnership with Norinco Group and Panjin Xincheng Industrial Group to develop a major refinery and petrochemical complex in Northeast China's Liaoning province. It has also completed the acquisition of a 10 percent stake in Rongsheng Petrochemical Co Ltd in Zhejiang province.
Wang Lining, director of the Oil Market Research Department, the Economics and Technology Research Institute, China National Petroleum Corp, said China has attracted several international companies, including BASF and Aramco, to invest in China, either through joint ventures or wholly owned projects.
Market competition in China's high-end petrochemical products industry will be further encouraged by the diversification of the domestic petrochemical market, which in turn will facilitate global economic stability and development, he said.
Aramco aims to grow its gas production by 60 percent by 2030 from the 2021 levels.
Discussions are also ongoing for a tie-up with French carmaker Renault and China's Geely for a 15 percent to 20 percent stake in their joint venture for combustion and hybrid engines, Nasser said.
