Published on : Apr 11, 2018
Scores of deals and agreements that were signed at the France-Saudi business forum on April 11, 2018 have paved way for disruptive forces in the economy of the Middle East and Africa (MEA). A number of French companies consider Saudi Arabia as the launchpad to enter other markets in the region. In particular, the energy and petrochemical sectors are proving to be potentially promising avenues for industry players. Saudi Aramco (Aramco), a Saudi Arabian petroleum and natural gas company has entered into a series of deals with globally prominent French companies. Armaco has inked a draft agreement with the French multinational giant Total S.A. to build a massive petrochemical complex in Jubail, which is estimated at US$5 Bn.
Under the memorandum of understanding (MoU) entered by the companies, the preliminary pact will help address soaring demand for oil and gas in the MEA. The agreement includes constructing a steam cracker units with an estimated capacity of 1.5 million tons a year, which will be especially used to feed specialty chemicals plants.
Deal to enable Aramco to Diversify away from its Core Assets and Meet Burgeoning Energy Demands
The petrochemical project will be executed by the joint venture Saudi Aramco Total Refining and Petrochemical Company (SATORP) (Aramco holding the major share). The deal will help the Saudi Arabian company to diversify from its core business and enter into realm of value-added products.
Apart from this, Aramco entered into agreements with a few other prominent French companies, notably with TechnipFMC, a U.K.-based global leader in oil and gas projects; Suez, a French utility company; and the U.S. multinational conglomerate company Honeywell.
Dozen other Agreements and Collaborations to disrupt the Middle East and Africa Economy
There were a dozen of deals signed at the forum worth mentioning. The French group Safran S.A. inked a jet engine agreement with Flynas. The low-cost Saudi Arabia-based airline company also revealed that it had collaborated with CFM International to buy its high-bypass turbofan engine to be installed in its forthcoming aircraft fleets. The agreement also includes CFM providing long-term maintenance and services to the carrier.