Saudi Aramco, which operates all upstream oil and gas assets in Saudi Arabia under a multi-decade concession deal with the Kingdom, is reviewing its upstream business and could decide to sell stakes in some not-so-strategic fields to external investors, Bloomberg reported on Thursday, quoting sources familiar with the matter.
Aramco is currently reviewing its upstream business, and when the review is completed, it could decide to sell stakes in oilfields or enter into partnerships or joint venture agreements to develop and operate new natural gas resources in Saudi Arabia, according to Bloomberg’s sources.
Any upstream deal could bring billions of U.S. dollars to Saudi Aramco, whose profits have declined since the oil price crash last year, while the commitment to pay $75 billion in annual dividends to shareholders—Saudi Arabia being the biggest with 98 percent—has been kept.
Aramco is in early talks with advisors to evaluate its options regarding the upstream business, Bloomberg’s sources said.
Nearly three decades ago, the world’s largest oil company and largest oil exporter was discussing potential partnerships with international oil companies to develop some of Saudi Arabia’s oil and gas reserves, but talks fell through because the potential foreign investors did not like the terms the Kingdom was offering.
Saudi Arabia needs a lot of money to continue financing the Vision 2030 plan promoted by Crown Prince Mohammed bin Salman to diversify the economy away from oil revenues.
Earlier this month, Saudi Aramco signed a $12.4-billion infrastructure investment deal with a consortium led by EIG Global Energy Partners, which will hold 49 percent in a newly formed Aramco subsidiary, Aramco Oil Pipelines Company.
“This transaction unlocks value from our assets and strengthen Aramco’s resilience, agility and ability to respond to changing market dynamics,” Abdulaziz M. Al Gudaimi, Aramco Senior Vice President of Corporate Development, said, commenting on the pipeline infrastructure deal.
Aramco’s President and CEO Amin Nasser said: “This landmark transaction defines the way forward for our portfolio optimization program.”
By Tsvetana Paraskova for Oilprice.com
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