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Remarks
to Media Representatives
PETRORabigh Groundbreaking Ceremony
RABIGH, Saudi Arabia, March 19, 2006
My friends in the media,
I first wish to welcome you here to Rabigh,
where we will witness a significant step in the Kingdom's economic
progress and diversification, under the patronage of the Custodian
of the Two Holy Mosques, King 'Abd Allah ibn 'Abd al-'Aziz.
My friends, the execution today of the final
financial documents for the PETRORabigh Project by Saudi Aramco
and Sumitomo Chemical is a landmark event. It is the culmination
of a determined effort to implement this project, whose related
studies and negotiations started over two years ago.
This project is one of the world's greatest
integrated oil refining and petrochemical projects to be built in
one stroke, with an expected completion date of year-end 2008. The
project involves development and modernization of the existing
refinery so that it can refine Arabian heavy crude oil to produce
high-value light petroleum products. It also involves construction
of a mega-petrochemical complex, as well as further downstream and
secondary industries which will provide attractive opportunities
for both the Saudi and foreign private sector.
My friends,
I would like to highlight the fact that the
PETRORabigh project is part of a bigger picture. That bigger
picture is the Kingdom's economic strategy in general, and the
petroleum strategy in particular, which benefits from the
unlimited support of the Custodian of the Two Holy Mosques King
'Abd Allah ibn 'Abd al-'Aziz. This strategy includes expanding the
base of the Saudi economy, diversifying national income sources,
attracting international investments, and reaping the direct and
indirect benefits that these type of projects will accrue to the
Saudi citizen.
Based on this strategy, PETRORabigh will focus
on the following objectives:
First: Participation by Saudi nationals
in the ownership of this project, and benefitting from the
anticipated revenues, through the floating of not less than 25
percent of the project for public subscription. This comes on the
direct orders of the Custodian of the Two Holy Mosques.
Second: Provision of greater opportunity
for national capital markets through borrowing from Saudi national
institutions, including about 50 percent of the amount of the
credit. The project will also entail borrowing of substantial
international capital from regional and global financial
institutions. In addition to Sumitomo Chemical's participation,
Japan's financial institutions will fund about half the amount
borrowed for this project.
Third: Support for the Saudi private
sector by awarding a sizeable portion of the project requirements
to Saudi national companies, and allowing these companies the
opportunity to participate in ongoing need for support services
after completion of the project.
Fourth: Concentration on conversion and
secondary petrochemical industries related to the project. In this
regard, an industrial complex will be attached to the main
project. All infrastructure requirements for this industrial
complex will be provided with enough capacity to accommodate more
than 30 investment sites. We anticipate great success in
attracting national and global investment for these downstream
projects. Feedstock will be made available for conversion
industries through long-term supply contracts based on competitive
conditions, terms and prices. It is expected that this will give
rise to industries such as plastic, paints, insulation and
waterproofing materials, as well as auto parts and other
industries.
My friends,
Once again I would like to thank you for
sharing in our celebration. I am fully confident that we shall
meet again to celebrate many similar events to come.
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