"The 50:50 joint venture plans to invest around $1 billion over the next six years in the Saudi retail fuel market," the statement said.

The two companies also signed an agreement with the owners of Tas'helat Marketing Company (TMC) and Sahel Transport Company (STC), which would mean acquiring their existing network of 270 service stations and their fuel tanker fleet.

Saudi Aramco and Total plan to modernise the network and build high-quality service stations at selected locations, the statement said.

The transaction is subject to the approval of regulatory authorities.

The joint venture will take a phased approach to expanding a network of domestic fuel retail stations, with a plan to reach the goal of owning and operating hundreds of stations by 2021, the statement said.

The venture will be governed by a board of directors with Abdulaziz al-Judaimi, Saudi Aramco's senior vice president of downstream, as the chairman of the board, and Mohammed al-Gahtani as the CEO.

Last year Aramco established a domestic fuel retailing subsidiary as part of the national oil company's drive to expand beyond crude production into downstream businesses.