Rabigh Refining and Petro Rabigh, the Kingdom of Saudi Arabia-based companies will get financial assistance worth $2 billion from Saudi Aramco and Japan’s Sumitomo Chemical as part of their recovery against the capital fallout due to the outbreak of Covid-19, media reports said.
Rabigh Refining and Petro Rabigh are the joint ventures of Sumitomo Chemical and Saudi Aramco.
It is reported that Sumitomo Chemical will provide 37.5 percent of the loan, which is $750 million, while the rest of the capital will be provided by Saudi Aramco. Furthermore, the Japanese company will provide the funds from its hybrid bonds which was issued in 2019.
Sumitomo Chemical, told the media, “The financial completion guarantees it and Saudi Aramco provided for financing the Rabigh Phase 2 refinery and petrochemicals complex project had been terminated as of Sept. 30. Coupled with other factors including periodic shutdown maintenance, Petro Rabigh faced the shortfall of working capital. To cover this shortfall, Sumitomo Chemical and Saudi Aramco have decided to make a loan totalling US$2 billion to Petro Rabigh.”
Petro Rabigh signed a deal with a syndicate of banks to receive an aggregate loan of $5.2 billion in 2015 for its project in the Kingdom. The company embarked its debt repayment last year and commits to repay the remaining loan balance from its revenue.
Petro Rabigh, which is 37.5 percent owned by Saudi Aramco, produces and sells refined petroleum products and petrochemicals.
Many global oil companies are still scrambling to recover from the pandemic, while oil refiners in Venezuela are witnessing their worst performance.