Saudi Aramco creates new fuel retail subsidiary to complement existing joint venture network

Saudi Aramco is to create a domestic fuel retail subsidiary in a bid to expand beyond producing crude oil, into downstream business.

The company will establish a network of filling stations in Saudi Arabia to sell fuel, Aramco said on Wednesday. But it did not give details of the size, cost or time-frame for the network.

In April, the national oil firm of Saudi Arabia said it had signed a memorandum of understanding (MoU) with French company Total to weigh up the option of buying a retail service station network in the kingdom.

But Wednesday’s statement made no mention of such a venture with Total, or the possibility of buying existing stations. The company did, however, said the new network would complement a global retail network which Aramco already operates through joint ventures.

The new subsidiary could help Saudi authorities go through with an initial public offering of Aramco shares, after plans to do so this year were postponed.

Chief executive Amin Nasser said last month the initial public offering (IPO) would “certainly” happen when conditions are right.

Speaking in Abu Dhabi, Nasser said crown prince Mohammed Bin Salman and energy minister Khalid al-Falih were aiming at a listing within three years.

"I think his royal highness and his excellency, the minister, talked about 2021," he said to CNBC.

Plans to sell an approximate five per cent stake in Aramco were announced by Crown Prince Mohammed Bin Salman in 2016, billed as a central cog in the kingdom’s economic modernisation drive.

The state-owned oil firm was aiming for a $2 trillion (£1.55 trillion) pricing or higher, but the float has been progressively delayed to 2018, 2019 and now 2021.