Saudi Aramco and Sumitomo Chemical said in a joint statement that Aramco has agreed to buy the Japanese company's 22.5% stake in their joint petrochemical project, PetroRabigh, for $702 million.
Under the deal, Aramco and Sumitomo Chemical will each provide $702 million in financing to PetroRabigh and waive $1.5 billion in loans, the statement said.
The deal reduces Sumitomo Chemical's stake in the joint venture to 15% while increasing Aramco's stake to 60%.
The two companies said the financing and loan forgiveness are part of a plan they intend to explore with PetroRabigh.
They added that the plan also includes initiatives to modernize the refinery's operation with the aim of helping to improve business profitability.
They explained that the deal is in line with Aramco's expansion into downstream activities and Sumitomo Chemical's move away from basic chemicals towards specialty chemicals.
