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The Scotsman: Saudi Aramco to buy stake in Japan refiner

RIYADH (Reuters) – Saudi Aramco, the state-owned oil conglomerate, plans to buy up to 14.95 percent in Japan’s fifth-largest refiner Showa ShellSekiyu K.K. <5002.T>, the official Saudi Press Agency (SPA) reported on Saturday.

A spokesman for Saudi Aramco could not confirm the SPA report. Aramco already owns a 15 percent stake in Showa Shell.

SPA said the transfer of a 9.96 percent stake in Showa Shell, a Royal Dutch Shell affiliate , would be completed in August, subject to regulatory approval.

“Saudi Aramco has also agreed in principle to acquire an additional 4.99 percent of Showa ShellSekiyu from the Royal Dutch/Shell Group, subject to satisfaction of certain commercial conditions,” it added in a dispatch from Tokyo.

Under the agreement, Saudi Aramco will supply a minimum of 300,000 barrels per day (bpd) of Arabian crude to Japan.

It said the deal would expand Aramco’s refining and marketing presence and ensure a reliable supply of high quality refined petroleum products in Japan.

Showa Shell has a crude oil processing capacity of 515,000 bpd. It has boosted supplies of Saudi crude at the expense of Iranian grade.

Japan cut crude imports from Iran more sharply than from other major suppliers in the second quarter as Tehran’s nuclear stand-off with the West dragged on.

The deal “will enhance Showa Shell’s refining and marketing business in Japan through the secure supply of high quality Saudi crude oil”, SPA said.

(c) Reuters 2006. All rights reserved.

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