Royal Dutch Shell said on Sunday that it has sold its stake in a Saudi Arabia chemicals joint venture to Saudi Basic Industries Corporation (SABIC) for $820 million.
Shell and SABIC have signed an agreement that calls for SABIC will acquire Shell’s 50 percent share in the petrochemicals SADAF joint venture.
The joint venture is located in Jubail, Kingdom of Saudi Arabia.
The SADAF joint venture encompasses six world-scale petrochemical plants with a total output of more than 4 million metric tons per year.
“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,” Shell Executive Vice President Chemicals Graham van’t Hoff said.
Shell said the deal marks an early termination of the joint venture agreement that was due to expire in 2020.
“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,” SABIC Vice chairman and CEO Yousef Al-Benyan said.
The transaction is subject to regulatory approval and is expected to complete later this year.
Shell said its other activities in Saudi Arabia are not impacted by the deal.
The SABIC began in 1976 by royal decree and currently has operations in over 50 countries with a global workforce of over 40,000 people.