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Prominent Chinese Investors Negotiate with Saudi Arabia to Get Aramco Stake

by Maureen Blas / Apr 29, 2021 07:11 AM EDT
Prominent Chinese Investors Negotiate with Saudi Arabia to Get Aramco Stake

Prominent Chinese investors are negotiating with Saudi Arabia to get a stake from Aramco. The country's oil firm is arranging to sell another portion of its business to overseas investors.

Saudi Arabia is planning to sell 1% of Aramco to a major global energy company. They could also sell additional stakes, which include international stakeholders in the next year or two. A 1% stake is equal to around $19 billion, according to Aramco's existing market capitalization.

Aramco is already talking to China Investment Corporation (CIC), which is among those that can invest. However, Saudi Arabia remains the biggest supplier of crude oil to China for seven consecutive months. 

"There are talks now for the acquisition of a 1% stake by a leading global energy company in an important deal that would boost Aramco's sales in ... a major country. There are talks with other companies for different stakes, and part of Aramco's shares could be transferred to the (Saudi) Public Investment Fund and a part listed ... on the Saudi bourse," said Prince Mohammed in an interview. 

The selling of Aramco's stake comes after the oil company settled a deal for the sale of 49% in its pipeline operations to EIG Global Energy Partners, which sold for $12.4 billion. Saudi Arabia is needing the billions that the deals bring to fund its enthusiastic Vision 2030. Its goal is to lessen its reliance on oil revenues.

Aramco is grappling with furthering its oil production capacity, which retorts to its plans in reducing its extreme dependence on oil. The company continues proposing and developing work on chief offshore oil expansion projects that will provide Saudi Arabia an additional 1.15 million barrels per day (BPD) of output capacity by 2024. 

The growth will come from three overseas oil fields, whose capacity will be expanded by between 250,000 BPD and 600,000 by the year 2024.

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