Petro Rabigh transfers Sumitomo marketing rights to Aramco

Petro Rabigh transfers Sumitomo Chemical’s marketing rights to Aramco, giving the energy giant full control over refined and petrochemical product sales

Rabigh Refining and Petrochemical Co. (Petro Rabigh) agreed with Saudi Arabian Oil Co. (Aramco), Sumitomo Chemical Co., and their affiliates to transfer product marketing rights currently held by Sumitomo to Aramco and its subsidiaries, granting the latter full marketing rights for these products.

In a Tadawul filing, Petro Rabigh said the deal was reached through some omnibus amendment agreements signed by the respective parties.

One was sealed between Petro Rabigh, Aramco, and Sumitomo, covering certain refined product marketing and sales agreements. Another one was signed between Petro Rabigh, Aramco, Saudi Basic Industries Corp. (SABIC), Aramco Trading Co. (ATC), Arlanxeo Netherlands BV Co., Sumitomo, and Sumitomo Chemical Asia Pte. Ltd., regarding petrochemical product marketing agreements.

For these changes to take effect, Petro Rabigh also signed release documents, collectively with the amendments referred to as the transaction documents.

This included a consolidated termination and release agreement under the English law between Petro Rabigh, SABIC, Aramco Trading, Arlanxeo Netherlands BV, Sumitomo, Sumitomo Chemical Asia, Citicorp Trustee Ltd. as external security trustee, and HSBC Saudi Arabia Co. as local security agent, both representing certain priority creditors.

Another termination and release agreement was signed under the Saudi law between Petro Rabigh and HSBC, under which the latter will act as the local security agent on behalf of certain priority creditors.

Petro Rabigh said the documents terminate guarantees provided by Sumitomo for its affiliates under certain marketing agreements, which will cease to apply after the transfer, and release some guarantees granted to priority creditors related to the marketing of refined and petrochemical products.

The company said the final transaction documents were signed today, Oct. 8, adding that the transfer of marketing rights and release of guarantees remain subject to the sale completion, which Petro Rabigh will announce once finalized.

It added that the transfer and release of guarantees are not expected to have a financial impact, as the commercial terms for marketing these products after deal completion will remain largely unchanged, including the related guarantees.

Aramco and Sumitomo are deemed related parties, being major shareholders in Petro Rabigh. SABIC, Aramco Trading, Arlanxeo Netherlands BV, and Sumitomo Chemical Asia Pte. Ltd. are also related parties as they are controlled by the company’s principal shareholders.