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21 February 2025

Aramco Expands Footprint With 25% Investment In Unioil

The Saudi oil giant seeks to grow its retail market presence through strategic acquisition for high-value fuels.

Saudi Arabian Oil Company (Aramco) is making waves once again as it embarks on its ambitious international expansion strategy. Recently, the oil giant announced its intention to acquire a significant 25% stake in Unioil Petroleum Philippines, one of the largest petroleum distributors within the country. This move is seen as part of Aramco's efforts to capitalize on the incoming growth of the high-value fuels market in the Philippines.

The definitive agreements for the purchase were signed on Thursday, with the acquisition pending customary closing conditions and regulatory approvals. Aramco expressed optimism about this venture, noting it as another step toward enhancing its retail and downstream offerings within Asia.

Yasser Mufti, Aramco’s Executive Vice President of Products & Customers, elaborated on the company’s goals, stating, “Our international expansion aims to capture additional value and to increase our participation in vibrant economies, collaborating with established partners.” This partnership with Unioil is expected to reinforce Aramco’s already growing network across Southeast Asia.

Unioil, established in 1966, boasts 165 retail stations and four storage terminals spread across the archipelago, positioning it well within the localized market dynamics. By tying up with Aramco, the company anticipates significant growth and development. Janice Co Roxas-Chua, Unioil’s Chief Executive, commented, “We are confident this partnership [with Aramco] will equip us to accelerate our growth and encourage innovation to strengthen our position as leaders within the wholesale and retail fuels market.”

Aramco's entrance to the Filipino market follows its track record of pursuing strategic acquisitions globally. Earlier this year, the oil giant made headlines by acquiring 40% of Gas & Oil Pakistan Ltd., significantly strengthening its foothold within Pakistan's fuel retail sector. The company has also dipped its toes in the South American market, purchasing Chilean fuel retailer Esmax Distribución SPA.

These strategic movements reflect Aramco’s broader focus on downstream investments across regions with burgeoning economies. The choice to invest heavily within the fuel retail market aligns perfectly with rising demands for refined products—an expectation echoed by notable market analysts.

According to Aramco’s latest announcement, this investment is not just about entering the Filipino market, but enhancing its network for distributing its refined products. This is especially relevant as the high-value fuels market is anticipated to grow significantly, presenting as untapped potential for both Aramco and Unioil.

Prior to this investment, Aramco had been negotiating for other retail acquisitions, such as the Shell PLC station network in Malaysia. Although discussions did not yield results as Shell reaffirmed its commitment to its network, it showcases the active pursuit of opportunities within Southeast Asia, which is becoming increasingly integral for Aramco’s growth strategy.

Noteworthy is Aramco’s recent purchase of Valvoline Inc. for $2.65 billion, which showcases the firm’s commitment to diversifying its portfolio across both fuel supply and complementary products, such as lubricants. Through this acquisition, Aramco will be able to offer Valvoline’s products throughout its Philippines retail outlets.

Such acquisitions and investments come at a time when the global energy market is seesawing between demands for sustainable energy and traditional oil and gas products. By enhancing its retail and refined product presence, Aramco appears poised to address both market needs.

The Philippines, with its growing economy and increasing fuel consumption, is far from insignificant. Market analysts project rising demand for fuels, leaving room for companies like Aramco to maximize their engagement as the market evolves.

Aramco has indicated plans to keep scouting for more opportunities, with its eyes on various Asian economies. A strategy focused on leveraging existing infrastructures and partnerships suggests strong synergy and competitive advantages for the oil giant. This results-oriented momentum indicates Aramco’s dual strategy of entering new markets and strengthening current operations simultaneously.

Overall, this latest acquisition reflects Aramco’s intent on solidifying its standing within the Southeast Asian region. By combining expertise with established players like Unioil, the company aims to provide world-class service and products to Filipino consumers, all the more enhancing its brand visibility and operations not only locally but globally. With significant milestones achieved this year, stakeholders now watch with anticipation what Aramco will do next.