Doha: Qatar Petroleum plans to merge two petrochemical units in its latest consolidation of businesses, as the world’s fourth-biggest oil and natural gas producer seeks to trim costs in its domestic operations and expand internationally.
The state-run company will fold the operations of Qatar Vinyl Co., part of Mesaieed Petrochemical Holding Co., into Qatar Petrochemical Co., a unit of Industries Qatar QSC, it said Sunday in an e-mailed statement.
Qatar Petroleum owns 74.2 per cent of Mesaieed and 51 per cent of Industries Qatar, according to data compiled by Bloomberg. Both companies are listed on the Qatar Stock Exchange.
Shareholders “will directly benefit from this integration as it reduces the operating cost and enhance the profitability of both companies,” Qatar Petroleum Chief Executive Officer Saad Sherida Al Kaabi said in the statement. The merger will begin in March and be completed this year through a service-agreement arrangement, QP said.
Qatar Petroleum, the world’s biggest producer of liquefied natural gas, is also merging its two LNG units this year -- Qatar Liquefied Gas Co. and Ras Laffan Liquefied Natural Gas Co.
The company dismissed thousands of workers in 2015 and assumed management of its foreign investment arm, Qatar Petroleum International, in an earlier effort to restructure.
Qatar is using consolidations as a tool to cut costs since oil prices declined by half starting in 2014. At least four ministries have been merged, and Qatar Investment Authority, the $335 billion sovereign wealth fund, is grouping $100 billion of investments in local companies into a new unit, people with knowledge of the matter said in May.
Masraf Al Rayan QSC, Barwa Bank QSC and International Bank of Qatar QSC said in December they are in talks to create the country’s largest sharia-compliant bank.
The plans follow similar steps in the neighbouring United Arab Emirates, where National Bank of Abu Dhabi PJSC and First Gulf Bank PJSC agreed last year to merge. Mubadala Development Co. and International Petroleum Investment Co., two of Abu Dhabi’s largest sovereign funds, also agreed to combine.