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Aramco and Jadwa in agreement with ExxonMobil on Luberef

Luberef was founded in 1976 as a joint venture between Saudi Aramco (70 percent) and ExxonMobil (30 percent). Luberef operates refineries in Jeddah and Yanbu for producing lubricating base oils. The combined design capacity of Luberef's two refineries is 550,000 metric tons per year.

Jadwa Chairman Prince Faisal bin Salman said the transaction exemplified the growing ability of the Saudi private sector to participate in complex and strategic areas of the economy.

"Jadwa's new partnership with Saudi Aramco and our common interest in expanding Luberef will meet national policy goals of job creation for Saudis and the expansion of private sector involvement, he added.

We are pleased that ExxonMobil has selected Jadwa as the new owner of its previous interest in Luberef, and we are excited to become a domestic joint venture partner with an organisation of the stature and caliber of Saudi Aramco," said Ahmed Al-Khateeb, Jadwa's managing director and CEO.

"Luberef has been a professionally and successfully operated business for over 30 years, and we look forward to participating in the high quality operation and growth opportunities of Luberef for many years to come," he added.

Adil Al-Tubayyeb, Saudi Aramco vice president of Joint Venture Development and Coordination, said that as the majority shareholder in Luberef, Saudi Aramco had an excellent working relationship with ExxonMobil.

"We'll continue our long-standing relationship with them in other joint ventures, such as Samref here in Saudi Arabia and the Fujian Refining and Ethylene Joint Venture Project in China," Al-Tubayyeb said.

At the same time, we are excited about partnering with Jadwa. This new partnership is a positive move for Luberef," he said.

Desmond Carr, chairman and CEO of ExxonMobil Saudi Arabia Inc., said the company took great pride in having contributed to Luberef's highly competitive and successful business and wished the new partners every success. "We look forward to continuing to work closely together both here in the Kingdom and elsewhere," he added.

Earlier, Jadwa Investment received permission from the Saudi Capital Market Authority to launch a Global Sukuk Fund.

"Jadwa aims to provide innovative investment solutions to clients, at the same time ensuring each product rolled out adheres to Shariah standards," Al-Khateeb said in information made available to Khaleej Times here recently.

"Jadwa Global Sukuk Fund is an important addition to the product range in Jadwa Investment's offering, as it would provide Islamic investors with an opportunity to invest in fixed income instruments and complete the asset allocation model of their investment portfolio in compliance with Shariah," explained Fadi Tabbara, vice president asset management.

Each Sukuk in which the fund invests will first be reviewed and approved by Jadwa's Shariah Committee to ensure that the structure of the underlying sukuk invested by the fund complies with Shariah principles.

Sukuks are bonds structured in compliance with Shariah principles. There are a number of underlying Islamic concepts used to structure sukuks. Ijara and musharaka are two of the more widely used Islamic structures in the sukuk industry.