Saudi Arabian Oil Company

Saudi Aramco and Total invest in high-quality retail fuel network in Saudi Arabia

Saudi Aramco and Total today signed an agreement to develop a network of retail fuel service stations in Saudi Arabia. The 50:50 joint venture (JV) plans to invest around $1 billion over the next 6 years in the Saudi retail fuel market to provide motorists with premium fuels and retail services in Saudi Arabia. “This is a major milestone which will help establish a quality retail fuel network in the Kingdom. We look forward to working together with our long-term partner Total and draw on their extensive experience in the retail fuel market,” said Abdulaziz Al-Judaimi, Saudi Aramco’s Senior Vice President of Downstream and Chairman of the JV Board. He added: “With this new business, we aim to enhance the quality of services, as well as create jobs and additional investment opportunities in the Kingdom. This JV aligns with Saudi Vision 2030 and supports the goals of the Infrastructure and Transportation Initiative under the Quality of Life program. This project is designed to also help optimize the total value of our hydrocarbon resources.” Momar Nguer, President of Marketing and Services and Executive Committee Member at Total, said: “Total is proud to be the first international major oil company to invest in Saudi Arabia’s fuel retail network. This joint agreement is in line with our strategy to expand in fast-growing markets worldwide. This new agreement is also reaffirming our long-term partnership with Saudi Aramco. Following our joint investments in SATORP refining and petrochemical complex, we are pleased to bring to the Saudi market our expertise and customer-minded approach in retail and contribute to local employment development.” The two companies have also signed an agreement with the owners of Tas’helat Marketing Company (TMC) and Sahel Transport Company (STC) to acquire TMC and STC, thereby jointly acquiring their existing network of 270 service stations and their fuel tanker fleet. Saudi Aramco and Total plan to modernize this network and build high-quality service stations at selected locations. This transaction is subject to approval of regulatory authorities. Ahmed Al-Subaey, Vice President of Marketing, Sales, and Supply Planning and Chairman of the Board of RetailCo., said: “This venture will strive to exceed customer’s expectations. We aspire to become the retailer of choice in Saudi Arabia, providing customers with a unique experience and premium offerings. Saudi Aramco is building on its position as the world’s oil powerhouse and international retail experience, coupled with Total’s experience in this field.” Mr. Al-Subaey emphasized that the decision to acquire TMC came after extensive feasibility studies of the local fuel and retail market and its promising opportunities. He added: “Our goal is to provide high-quality services that support the tourism industry in the Kingdom and reflect our country’s progress in developing the infrastructure and a reliable service industry.” The JV will take a phased approach to expanding its network of domestic fuel retail stations, with a plan to reach the goal of owning and operating hundreds of stations by 2021.

Saudi Arabia · 13 Feb 2019

Leveraging our brand: Aramco service stations coming to the Kingdom

In the not-too-distant future, drivers will pull up to Aramco service stations in the Kingdom, and the experience will be a new one. The fuel pumps will be modern and self-serve, if the driver so chooses, with the option of paying with a credit or debit card. A convenience store and a well-recognized restaurant will provide plenty of food options. Like many changes in the Kingdom in line with Saudi Vision 2030, the arrival of Aramco branded gas stations is likely to arrive at an accelerated pace, and it will have a profound effect of raising expectations for the customers’ way of buying fuel for both residents and visitors alike. With the creation of RetailCo, a wholly owned subsidiary established to cater to fuel retailing, “Saudi Aramco will be creating a sustainable and profitable business model for integrating across the hydrocarbon value chain,” said Ahmed A. Al-Subaey, vice president of Marketing, Sales, and Supply Planning and chairman of the board of RetailCo. “RetailCo will grow its operations in both the automotive and aviation fuel segments, offering customers enhanced services and quality products while implementing a sustainable and profitable business model that delivers a new and stable source of revenue for Saudi Aramco. A ‘shift in paradigm’ Saudi Aramco has been in the global fuel retail business for decades through global partnerships with major international oil companies (IOC) around the world. Motiva in the United States, Showa-Shell in Japan, S-Oil in South Korea, and FREP and SSPC in China are examples of the Saudi Aramco presence in the fuel retail arena with more than 11,000 operating stations globally. This global experience placed the company in a position to confidently enter the Saudi market and bring the best practices from around the world. And by offering a superior customer experience, quality fuels, and convenience services on a world-class quality level, RetailCo will raise standards and provide an enhanced customer experience to all sectors of society. “One of the key and critical factors for success for RetailCo will be its focus on customers and not only meeting expectations, but raising expectations for what customers expect at a fuel station in the Kingdom,” said Mohammed H. Al-Gahtani, RetailCo’s CEO. “We are pursuing a total shift in paradigm in the gas station perception among the public, from what people think of gas stations now as a divergence from a main route to get convenience service to a destination of services on major highways, to work, or simply on the way back home,” Al-Gahtani said. “This focus on quality and customer service is what we can add to the retail business in our country, and it is the level of service that not only Saudi Aramco is pursuing, but also the Kingdom through the Saudi Vision 2030 Quality of Life Program.” "We are pursuing a total shift in paradigm in the gas station perception among the public, from what people think of gas stations now as a divergence from a main route to get convenience service to a destination of services on major highways, to work, or simply on the way back home." Mohammed H. Al-Gahtani, CEO RetailCo Value proposition The company’s fuel retail strategy is fully aligned with Saudi Vision 2030 and its goals to further improve the quality of life for the residents of the Kingdom. By entering the fuel retail sector, Saudi Aramco can have a positive impact on the creation of well-paid jobs for Saudi citizens, opening up opportunities at all levels in convenience stores, fuel pumps, restaurants, and other associated businesses at the fuel station. By adding an in-Kingdom fuel retail business to its portfolio, Saudi Aramco will be expanding the value chain of the hydrocarbon molecule. While crude oil prices fluctuate depending on news events, global politics, and market conditions, the demand for transportation fuel continues to grow steadily, worldwide. Taking our place in the retail sector allows Saudi Aramco to diversify its market risks and tap into new revenue streams. By operating on the principle that quality customer relationships are the foundation of opportunity in the fuel station sector, RetailCo will rapidly improve the services available to Saudi residents and visitors. Improved service will then not only build customer loyalty, but it will also create new jobs in high-quality chain restaurants, supermarkets, car washes, and auto repair shops. More importantly, by ensuring that the fuel stations operating under the Aramco name follow the same standards for quality that Saudi Aramco applies to our own operations and facilities, the company will be introducing its well-deserved reputation for excellence to a much wider customer base — the residents of Saudi Arabia. By offering high-quality fuels and professional services and improving customer care, RetailCo expects to become the trusted fuel retailer of choice. The first steps Setting up a retail arm in the fuel sector may sound like a simple step for an oil company — and particularly for the largest oil company in the world — but Saudi Aramco has conducted due diligence to ensure that its entry into the customer-facing segment of the downstream industry will be successful and profitable. The first step was creating the new subsidiary, RetailCo, to cater to all fuel retail activities in the Kingdom and appointing a managing board of directors. “Training is a major part of the business plan and a key to our success,” said Al-Gahtani. “We are already in touch with training centers, and we will ensure that our employees have the soft and technical skills they need, including a focus on customer satisfaction. Well-trained employees will be able to furnish our four main brand differentiators that will set Aramco stations above the competition. Those include Well-being, a relaxing and refreshing experience, revitalizing the customer and the car; Pioneering, a dynamic and innovative experience, setting a path for others to follow; Mass Premium, a high-end experience made accessible to all sects of society; and blanketing all these services with the utmost in Service Excellence, setting service standards through people and technology.” RetailCo will become a national champion in the fuel sector through customer service and will create a center of excellence, which will be the melting pot for best practices and new trends in the fuel retail business. All of this will support Saudi Aramco and cement its brand positioning locally and globally by creating these touch points with fuel retail customers residing in-Kingdom and visitors to Saudi Arabia from all corners of the globe. Over time, as Aramco branded retail stations open, RetailCo will create a positive form of competition in the Kingdom, with professional players willing to compete in improving their services with a profitable and sustainable business model — all of which will ultimately benefit customers here in the Kingdom. Cars and planes RetailCo’s core business and operations will be two-pronged — automotive and aviation fuel segments. For the automotive segment, RetailCo will take a phased approach to expand its network of domestic fuel retail stations to cover the Kingdom. The flagship fuel stations will be destinations on critical intercity highways, offering a full range of services, including food, convenience store, and other amenities. Inner city fuel stations will retain the same keen attention to cleanliness and detail, while offering a more pared down list of services. Adding new business lines that put us directly in touch with our end customers will open up new challenges, to be sure, but it will also help the company to derive the full value of each hydrocarbon molecule — from wellhead to customer, ensuring service excellence to customers along the way.

Saudi Arabia · 8 Jan 2019

Saudi Aramco to set up gas stations

Saudi Aramco has disclosed plans to enter the Kingdom’s retail market by setting up gas stations fully owned by the company. “We had already begun implementing this project by the end of last year,” said the company’s annual report without giving an exact date for launching the service. The move comes as part of the Saudi oil giant’s strategy to become an integrated energy company that enters into more business ventures, including petrochemicals and the sales of refined products. A team set up for this purpose is reportedly weighing several strategic options to expand the company’s operations. Aramco has already received approval for establishing a fully owned company for retail services. The new company is licensed to build, operate and maintain service stations in selected areas. The company will not only run gas stations but also supermarkets and other services. Aramco has indicated that it could hand services other than fuel supply to potential partners who could add value to the company and its trademark. Two international companies — Shell and Mobil — left the Kingdom’s retail market after suffering losses, said Ahmed Al-Falih, deputy chairman of the National Committee for Gas Stations. He said one of the two had paid SR80 million for nine stations. “Gas stations face problems in acquiring licensing and manpower,” he said. Foreign investors in the sector are required to have 10 years’ experience in management, operation and maintenance. “About 90 percent of station owners are small investors,” Al-Falih said.

Saudi Arabia · 18 May 2014