KHOBAR, Saudi Arabia/DUBAI,(Reuters) – A new Saudi Aramco subsidiary for trading refined products started commercial operations on Jan. 1, the state oil giant said on Wednesday.
Saudi Aramco Products Trading Co (Aramco Trading) will replace the Product Sales and Marketing Department (PSMD) in importing and exporting refined petroleum products, it said in a statement posted on its website.
Aramco Trading, whose formation was first announced in February 2011, will start with 80 employees and will be based in Dhahran, site of the state company’s headquarters.
“The landscape for trading has shifted with evolving market dynamics, and that will bring both challenges and opportunities,” said Said A. Al-Hadrami, president and CEO of Aramco Trading.
Aramco is one of the largest exporters of fuel oil and naphtha into East Asia as well as a net importer of gas oil.
In 2010, the company produced almost 500 million barrels of refined products and exported 133.4 million barrels, down from 149.4 million barrels in 2009.
“Obviously as a trading company they want to maximise revenues for the company and their country … by enlarging their portfolio and capitalizing on their system,” a Gulf-based trader said.
“This is the principal, but harder is the application,” the trader said, adding that know-how, networking and hiring the right people could be among the challenges the new company faces.
Aramco Trading will be in charge of refined oil products transactions including condensate, naphtha, gasoline, middle distillate fuels, fuel oil and residual products and bulk petrochemical products, the company said.
Traders do not expect the company to take positions in the market.