In a significant turn of events on February 19, the global energy landscape witnessed a momentous announcement. Saudi Aramco, the national oil giant of Saudi Arabia, officially declared the successful acquisition of a 25% stake in the Philippines' third-largest oil company, Unioil Petroleum Philippines. This strategic move not only marks Saudi Aramco's entry into the retail fuel market of the Philippines but also represents a crucial step in their global retail network expansion.
Saudi Aramco’s investment in the Philippine market is driven by deeper strategic considerations. The Philippines holds significant potential as a major economy in Southeast Asia, particularly in its high-value fuel market. By acquiring a stake in Unioil, Saudi Aramco intends to leverage the advantages of this local enterprise to create new sales channels for its refined products. According to the strategic cooperation agreement reached between both parties, Saudi Aramco will supply its renowned Caltex lubricants and other retail products to select Unioil stations. This collaboration not only enhances Unioil’s competitiveness but also provides Saudi Aramco with a powerful entry point into the Philippine market. However, the deal is subject to a stringent set of regulatory approval processes, reflecting the seriousness and standardization of the transaction despite the uncertainty it entails.
Founded in 1966, Unioil plays a crucial role in the Philippines' oil industry. Over the years, it has grown into one of the fastest-growing fuel retail, wholesale, and storage companies in the country, operating 165 gas stations and four oil terminals, thereby securing its position as the third-largest oil company in the Philippines. The company's solid foundation and rapid expansion in the fuel retail sector offer a robust basis for collaboration with Saudi Aramco. Yasser Mufti, Executive Vice President of Products and Customers at Saudi Aramco, commented: “This partnership represents a breakthrough in our global retail network construction. Through Unioil's channels, Saudi Aramco will deliver high-quality products and services to the Philippine market.” He further emphasized, “By collaborating with established local operators, we can more effectively capture the increment of emerging market space. Unioil holds significant advantages in the rapidly evolving fuel retail domain in the Philippines, laying a solid foundation for mutual cooperation.” This synergistic mode of collaboration is anticipated to create a win-win situation in the Philippine market, promoting mutual business growth.
In fact, Saudi Aramco has been actively expanding its global retail operations, intensifying its investment efforts to broaden its retail landscape worldwide. In 2024, the company engaged in a series of investment initiatives in Chile and Pakistan to further penetrate overseas retail markets. In March 2024, Saudi Aramco completed its acquisition of 100% of the shares of Chile's fuel and lubricants retailer, Esmax Distribución SpA, marking its first foray into the South American petroleum downstream retail market, thereby opening avenues for its business expansion in South America. In May of the same year, it also finalized the acquisition of 40% of shares in Pakistan's Gas and Oil Limited. This company is also a major player in the fuel and lubricants retail sector, boasting more than 1,200 gas stations in Pakistan. This acquisition positioned Saudi Aramco firmly within the Pakistan market, further enhancing its retail presence in Asia.
Saudi Aramco has also shown keen interest and active investment in the Chinese market. In April 2024, to expand its downstream business in China, Saudi Aramco signed a memorandum of understanding with Hengli Petrochemical to acquire a 10% stake, aiming to strengthen their collaboration in the petrochemical field and jointly tap into China's vast market. Earlier, in 2023, Saudi Aramco made headlines by acquiring a 10% stake in Rongsheng Petrochemical for a staggering 24.6 billion RMB, which became the company's largest overseas acquisition in its history, highlighting its firm commitment to the Chinese market. Through the partnership with Rongsheng Petrochemical, Saudi Aramco aims to engage more deeply in China's petrochemical industry chain, achieving effective resource and market alignment.
In Europe, Saudi Aramco is equally proactive. In 2022, to extend its downstream retail operations in Europe, it successfully acquired a 30% stake in a refinery located in Gdańsk, Poland, which has a capacity of 210,000 barrels per day, through the Polish refinery and fuel retailer PKN Orlen, along with the complete acquisition of the related wholesale business. This acquisition not only enhanced Saudi Aramco’s refining capacity in Europe but also further substantiated its retail framework in that region, increasing its competitive foothold.
Saudi Aramco's approach to the global retail market is marked by diversified strategies, represented through a multitude of investments and acquisitions aimed at broadening its operational scope and market share. The acquisition of Unioil in the Philippines stands as another pivotal element in its worldwide strategic framework. As the various transactions progress, Saudi Aramco is poised to secure a more significant role in the global retail market and to lead the development trends within the global energy retail industry.