Describing its listing on the Saudi Stock Exchange as “an important milestone,” the Saudi oil giant Aramco’s base oil supplier Luberef sees the move as an opportunity to propel its growth trajectory.
In an exclusive interview with Arab News, Mohammed Y. Al-Qahtani, senior vice president of downstream, Saudi Aramco, said: “As an integral part of Saudi Arabia’s supply chain and a driving force in the Kingdom’s industrialization ambitions, Luberef’s listing will provide an important strategic dimension to propel the company’s growth strategy and help realize its vision to be the leading supplier of premium base oils and specialty products.”
The listing came amid a flurry of initial public offerings in Saudi Arabia and the wider Middle East. Luberef received the Kingdom’s Capital Market Authority’s nod for registration and listing of its 50 million shares, equivalent to 29.656 percent of its share capital, last month. The IPO drew strong demand from local and international investors.
It is the Kingdom’s third-largest IPO in 2022 after second-placed Nahdi Medical, Saudi Arabia’s biggest pharmacy chain, which raised $1.36 billion.
“Furthermore, the listing of Luberef on the main market of the Saudi exchange is an important milestone for the company, and a mechanism to enable the next phase of growth in a dynamic marketplace with increasing opportunities for expansion in the Kingdom and beyond,” the top Aramco official said.
Officials ringing the bell during IPO ceremony at Tadawul.
Elaborating further Al-Qahtani said: “Luberef is already an integral part of the Saudi supply chain, with its products serving critical applications in vehicles, ships, machinery, and more.
“The listing will help fuel Luberef’s growth trajectory and unlock new opportunities for all stakeholders.”
State-led IPO programs in Saudi Arabia, Abu Dhabi, and Dubai have helped equity capital markets in the Gulf Cooperation Council region, in sharp contrast to the United States and Europe, where global banks have been trimming headcount in a dealmaking drought.
With this move, Luberef joined the long list of several Aramco subsidiaries that are already listed on the Saudi stock exchange. These include Saudi Basic Industries Corp., and Rabigh Refining & Petrochemical Co.
Commenting on Luberef’s relationship with Saudi Aramco, Al-Qahtani said: “Aramco currently owns 70 percent of Luberef’s issued share capital and will retain its entire 70 percent equity stake in Luberef after IPO.”
“Luberef has long-term agreements with Aramco for the provision of its feedstock,” he added.
Earlier this year, Luberef announced that it intends to launch a new specialty production facility in Yanbu that will manufacture transformer oil and white oil used in power generation, pharmaceutical, and food businesses.
Called Lube Hub, the facility will enable the localization of these specialty products in the Kingdom. The venture will attract producers and operators of base oil-related products.
“Luberef is also a member of the Aramco base oil alliance, formed in 2019, between Aramco and its base oil producing affiliates, including S-Oil and Motiva,” he continued. “This allows Luberef to supply base oils to key markets in Asia and the Americas through our network in order to benefit from demand in other markets.”