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Saudi Aramco may up stake in Showa Shell: Nikkei

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TOKYO - Saudi Arabian Oil Co is open to the idea of raising its stake in Japan’s Showa Shell Sekiyu KK if the oil distributor wants to expand its operations, the Nikkei business daily quoted the vice president of the Saudi refiner as saying.

Published: Sat 15 Dec 2007, 6:59 PM

Updated: Sat 4 Apr 2015, 9:40 PM

  • By
  • (Reuters)

In an interview published on Saturday, the Nikkei quoted Saudi Aramco Vice President Adil Al Tubayyeb as saying he planned to increase the firm’s stake in Showa Shell in the future.

Currently holding a 15 percent stake, the state-run Saudi Aramco is Showa Shell’s second-largest investor, after Royal Dutch Shell

“Yes, the plan is there,” Al Tubayyeb said, according to the Nikkei, when asked about the chances of a stake increase. ”I don’t have a timeframe, but (we will do so) when there are new investments needed.”

He added that Saudi Aramco may also raise its stake if Showa Shell expresses a desire to expand into other fields.

A shrinking gasoline market has prompted Showa Shell to place more focus on other operations, like its solar cell business, the Nikkei said.

The newspaper quoted Al Tubayyeb as saying that he was ”extremely happy” with his company’s relationship with Showa Shell, and that he was content with the Japanese firm’s ”efficiency, operations, safety (and) market share.”

Saudi Aramco is believed to supply more than 60 percent of Showa Shell’s crude oil needs, and the Japanese company is expected to post a group net profit of 45 billion yen ($397 million) for the year ending Dec. 31. Such a figure would be 2 percent lower than a year ago.

Showa Shell increased its market share of gasoline sales by 0.5 percent year-on-year to 16.1 percent in fiscal 2006, while industry leader Nippon Oil Corp and No. 2 ExxonMobil lost market share last year.

Saudi Aramco also intends to invest $6-7 billion in a joint venture with Sumitomo Chemical Co to build a second plant in Saudi Arabia, the Nikkei said.



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