Saudi Aramco intends to sell 1% of its shares to a foreign investor. Crown Prince of Saudi Arabia Mohammed bin Salman recently spoke about this in a TV interview.
“The acquisition of a 1% stake in one of the world's leading energy companies is currently under discussion. This deal could be important in strengthening Saudi Aramco's sales in the country where the company is located, ” said the Prince. The deal is valued at $ 19 billion.
However, the question arises, who can afford to buy even a small part of the Saudi oil giant. B Most international oil companies face financial constraints. And also with a tendency to energy transition. So the list of buyers is pretty limited.
It is likely that the company will be associated with China, Russia or India, notes the Oil Price resource. Looking at the Kingdom's current Asian orientation, Aramco is more likely to sell some of its shares to China than to India.
It is possible that a Chinese oil giant, backed by local banks and Beijing, is behind the deal. At the same time, Russian operators or investment funds such as Gazprom, Rosneft or RDIF may be very interested in such a purchase.
The improvement in relations between Beijing and Riyadh is clearly based on the growing hydrocarbon ties between them. China is currently the largest importer of Saudi oil and petrochemicals.
As one of the world's few growth regions, China provides Saudi Arabia with stable income. Another potential contender, India, is still lagging behind. But it may become a force to be reckoned with in the next five to nine years.
It is expected that part of the upcoming increase in production capacity of Aramco to 12 million barrels per day is intended to increase supplies specifically to India, not to the Middle Kingdom. As for the Russian applicants, things are not so simple here. Washington may oppose the sale of Saudi Aramco shares to Rosneft or Gazprom.
Where will the money go from the sale of part of Saudi Aramco
The proceeds from the sale of 1% of Aramco shares will go to the growth strategy of the company and the Saudi State Investment Fund SWF. This is considered a good way to enter financial markets without issuing debt.
Stocks pose a risk to investors, not to the issuer. And that means Saudi Aramco is simply using another way to monetize assets. And besides, it should be borne in mind that Aramco does not own the oil and gas reserves of Saudi Arabia. Ownership is still in the hands of the rulers of the Kingdom. : ///
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