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Kuwait News Agency: Saudi Aramco may boost Japan”s Showa Shell stake

Saudi Aramco may boost Japan’s Showa Shell stake

TOKYO, Dec 16 (KUNA) — The state-run Saudi Arabian Oil Co., or Saudi Aramco, may increase its stake in Showa Shell Sekiyu KK if the Japanese oil distributor decides to broaden the scope of its business, a major business daily here reported, citing Vice President Adil Al-Tubayyeb.

“We are extremely happy with our affiliation with Showa Shell,” Al-Tubayyeb said in an interview with the Nikkei Shimbun this week. “We are a long-term investor. We don’t look at short results,” Al-Tubayyeb was quoted as saying.

With a 15 percent interest, Saudi Aramco is Showa Shell’s second-largest investor, after Royal Dutch Shell.

On the possibility of raising its Showa Shell stake, he said, “The plan is there. I don’t have a time frame, but (we will do so) when there are new investments needed” or when Showa Shell wants to branch out into other fields. With the gasoline market contracting, Showa Shell is increasingly emphasizing the solar cell business.

Showa Shell is expected to post a group net profit of JPY 45 billion (USD 397 million) for the year ending December 31, down 2 percent from a year earlier, according to the daily.

Saudi Aramco is said to supply slightly more than 60 percent of Showa Shell’s crude oil needs. In fiscal 2006, Showa Shell had a domestic market share of 16.1 percent in gasoline sales, up 0.5 point from a year earlier. Industry leader Nippon Oil Corp. and second-ranked ExxonMobil lost market share.

Al-Tubayyeb said his company plans to invest about USD 6-7 billion in its joint venture with Sumitomo Chemical Co. to build a second Saudi Arabian plant, the daily reported.

Their first plant is expected to go onstream in October 2008, he said. It will mass-produce commodity-grade resins, such as polyethylene, to be sold in China and Europe. The second facility, which is expected to come on line as early as 2012, would produce high-value-added plastics.

Al-Tubayyeb also disclosed plans to create industrial parks where materials produced at their facilities will be processed into petrochemical products, the report added.(end) mk.

http://www.kuna.net.kw/home/contactUs.aspx?Language=en

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