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Soaring Petrochemical Demand Sparks Major Profits

Soaring Petrochemical Demand Sparks Major Profits

Petrochemical companies are going from…

Major Chinese Investors Could Buy Stake In Aramco

Major Chinese investors, including the sovereign wealth fund China Investment Corporation (CIC) and Chinese national oil companies, are the ones looking to buy a stake at the biggest oil company in the world, Saudi Aramco, Reuters sources said on Wednesday.

Crown Prince Mohammed bin Salman had announced on Tuesday that Saudi Arabia was looking to sell 1% of its oil giant Saudi Aramco to “one of the leading energy companies in the world”. He did not specify which energy company. MbS also said it could sell additional Aramco shares to other international investors.

The 1% stake sale could generate as much as $19 billion for the oil-dependent economy as the country tries to diversify away from its prized possession, oil.

On Tuesday, MbS said somewhat ambiguously that the deal could increase sales to the country “where this company resides.” Saudi Arabia is already China’s largest oil supplier.

And it’s not the only deal Aramco is making. Aramco just recently finalized a deal to sell a 49% stake in its pipeline business to Washington D.C.-based EIG Global Energy Partners, which brought in $12.4 billion for the oil giant at a time when budgets are tight due to the low oil prices and lowered production as a result of the pandemic subsequent OPEC agreement.

Reuters sources suggest that Aramco has been looking for investors in China since before the pandemic began. Aramco has reportedly spoken with all the major state investors with overseas money, but few showed an interest in the oil giant.

That Aramco has found a buyer for a portion of its pipeline business and is now shopping around a 1% stake in Aramco reflects the problematic situation that Saudi Arabia now finds itself in as it attempts to bring Vision 2030 to fruition. The billions of dollars that could be generated by these mega sales may be the very thing that the ambitious plan needs.

By Julianne Geiger for Oilprice.com

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