Al KHOBAR: Saudi Arabia’s PetroRabigh expects its revenues to rise by almost SR1bn ($267m) this year after its parent companies agreed to cut international marketing fees by a third, it said yesterday.
The petrochemical company is a joint venture between oil giant Saudi Aramco and Sumitomo Chemical, which market PetroRabigh’s production.
“Saudi Aramco and Sumitomo Chemical... are committed to reducing the marketing commission of all petrochemicals products of PetroRabigh by around a third of current levels and commissions to market petroleum products of PetroRabigh in the domestic market have been cancelled,” PetroRabigh said.
The start of the five-year agreement will be backdated to April 1, 2013 and the deal will have a positive impact on the company’s revenues by around 1 billion riyals this year, increasing to 1.3 billion riyals annually in subsequent years based on current price expectations and production levels, the company said.
PetroRabigh’s earnings have been hit hard this year by maintenance at some of its facilities, pressure on profit margins, power cuts and an outage of its ethane cracker due to a water leak. For the first nine months of this year, it reported a net loss of 880.7 million riyals against a net profit of SR420.8m a year earlier.
In the second quarter of 2013, its sales totalled SR14.20bn, according to its website.
reuters
