by Giulio Piovaccari
MILAN (Reuters) – Saudi Aramco does not plan to increase its stake in Horse Powertrain beyond 10 percent and continues to look for other opportunities to expand its presence in the sector, Yasser Mufti, Aramco’s executive vice president for products and customers, told Reuters.
The Saudi oil company announced in June that it would take a 10% stake in Horse Powertrain, valuing the Renault-Geely joint venture at around €7.4 billion, as part of its growing interest in the automotive industry.
“The 10 percent stake is in line with all the financial and strategic objectives we have set for this company,” Yasser Mufti told Reuters in an interview in Milan.
“I’ve seen a lot of speculation about this, but we’ve always targeted a 10% stake,” he added.
Geely and Renault each own 45% of the supplier of internal combustion engines, hybrids and transmissions.
Aramco is expected to finalize its stake acquisition later this year.
More M&A deals are on the horizon for Aramco, which has already bought Chilean fuel distributor Esmax and taken stakes in Gas & Oil Pakistan and U.S. company MidOcean, its first overseas LNG (liquefied natural gas) investment.
“We are very busy in this area,” Yasser Mufti summed up.
“It’s in the downstream business where we have M&A opportunities, and now also in LNG. We have targets and markets and we’re working with those opportunities as they arise.”
Aramco is currently in talks to acquire stakes in Chinese companies Shandong Yulong Petrolchemical and Hengli Petrochemical, among others. It also listed its refining unit Luberef in early 2023.
Saudi Aramco, says Yasser Mufti, is investing “hundreds of millions” to build two demonstration facilities with partners in Saudi Arabia and Spain to develop e-fuels (synthetic fuels).
E-fuels are made by synthesizing captured CO2 emissions and hydrogen produced from CO2-free electricity. They are estimated to cost €2 per liter if produced on a large scale, four times the usual wholesale price of gasoline.
The two facilities will be “excellent starting points” to help Aramco understand how to increase e-fuel production and reduce costs, Mufti said.
(Reporting by Giulio Piovaccari, with contributions from Yousef Saba; by Kate Entringer, edited by Blandine Hénault)
Copyright © 2024 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
