Saudi Aramco has invited China's Sinopec to take part in the upcoming initial public offering (IPO) of the Saudi oil company planned for next year, the Chinese firm's chairman Wang Yupu said on Monday.
China Petroleum & Chemical Corp, as Sinopec is officially named, has talked with the Saudis about the Aramco listing, which is expected to be the biggest IPO in history. While on a recent visit to China, Aramco's chief executive Amin Nasser told Chinese officials that he hoped that Sinopec could invest in the Saudi company's IPO, according to Sinopec chairman Wang.
"We talked with them on the plan, and generally speaking we had a very good conversation," Wang said at a briefing in Hong Kong, as quoted by Bloomberg. "Going forward, based on our own reality and needs, we will get into more detailed conversations with them," the Chinese manager noted.
Earlier this month Saudi King Salman started a month-long tour of Asia, during which the King has been signing with Asian counterparts billions of dollars worth of deals - including for oil and refining.
In China, King Salman has signed preliminary deals that could be worth as much as $65 billion if finalized - a total of 14 cooperation agreements, including a memorandum of understanding on 35 projects for "production capacity and investment cooperation". Among the industries that the agreements cover are oil production, petrochemicals, and even space.
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As Saudi Arabia is getting ready to list its oil giant next year, it is trying to secure future exports and lock in future demand with key buyers such as China, preferably under long-term contracts, which is the standard approach of the Kingdom toward crude oil exports.
China, on the other hand, is expected to further deepen its reliance on oil imports. Last year China met 64.4 percent of its crude oil demand with imports, due to high production costs at home and favorable international prices resulting from the global glut.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
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