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PIF Signs Agreement to Invest in Alkhorayef Petroleum

The investment demonstrates PIF’s broader efforts to develop Saudi Arabia’s equipment and service landscape and support the growth of promising private sector companies to further develop the industrial ecosystem and increase export revenues.
The investment demonstrates PIF’s broader efforts to develop Saudi Arabia’s equipment and service landscape and support the growth of promising private sector companies to further develop the industrial ecosystem and increase export revenues.
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PIF Signs Agreement to Invest in Alkhorayef Petroleum

The investment demonstrates PIF’s broader efforts to develop Saudi Arabia’s equipment and service landscape and support the growth of promising private sector companies to further develop the industrial ecosystem and increase export revenues.
The investment demonstrates PIF’s broader efforts to develop Saudi Arabia’s equipment and service landscape and support the growth of promising private sector companies to further develop the industrial ecosystem and increase export revenues.

Saudi Arabia’s Public Investment Fund (PIF) announced on Monday the signing of a share subscription agreement to invest in Alkhorayef Petroleum, from Alkhorayef Group, by way of a capital increase and subscription to new shares amounting to a 25% shareholding in the company. Alkhorayef Group, the parent company and current shareholder of Alkhorayef Petroleum, will retain a 75% stake.

This investment demonstrates PIF’s broader efforts to develop Saudi Arabia’s equipment and service landscape and support the growth of promising private sector companies to further develop the industrial ecosystem and increase export revenues.

Alkhorayef Petroleum is the leading Saudi-based provider and manufacturer of oil and gas production optimization solutions, specializing in artificial lift, wireline services and equipment, as well as early production facilities.

The company is also the only Gulf-based manufacturer of electric submersible pumps; equipment critical to oil and gas production. It has achieved a diversified revenue base and a successful operational track record in 13 countries across the Gulf Cooperation Council countries, as well as in Africa and Latin America.

PIF’s investment will enable Alkhorayef Petroleum, a private sector company, to be better positioned to realize its full potential by leveraging its extensive technical and commercial capabilities. It will also strengthen its position in the energy services industry and create long-term value for shareholders. The agreement will further improve supply chains in the energy services sector in Saudi Arabia.

Head of Industrials and Mining sector in MENA Investments at PIF Mohammad Aldawood said: "This transaction forms part of PIF’s broader efforts to deepen the manufacturing sector in Saudi Arabia and represents a milestone in strengthening the regional industrial ecosystem."

"This investment is expected to enable Alkhorayef Petroleum’s growth strategy in local and international markets, and further expand its manufacturing output while also focusing on innovative R&D in high-growth areas," he added.

"Our investment aligns with PIF’s domestic strategy to develop key sectors and work alongside strategic economic partners in the private sector to support the delivery of Vision 2030," he stressed.

Chairman of Alkhorayef Petroleum and Alkhorayef Group Saad Alkhorayef said: "This investment is a recognition of our achievements in the Middle East as well as across Africa and Latin America, and the strategic role Alkhorayef Petroleum plays in supporting the oil and gas sector in Saudi Arabia and other regions."

"The investment with PIF is a major milestone in our journey and will allow the company to strengthen its position as a leading oilfield services company and preferred long-term partner to our customers worldwide. We firmly believe that the company can become one of the world’s leading oilfield services companies, and this investment further reinforces our ambition and determination," he stated.

The completion of the agreement is subject to certain customary approvals from the relevant authorities and satisfaction of certain conditions in the transaction agreements.

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Urgent Financial Tasks Await Lebanon’s Emerging Government

Lebanese President Joseph Aoun stands between Speaker of Parliament Nabih Berri and caretaker Prime Minister Najib Mikati (dpa)
Lebanese President Joseph Aoun stands between Speaker of Parliament Nabih Berri and caretaker Prime Minister Najib Mikati (dpa)
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Urgent Financial Tasks Await Lebanon’s Emerging Government

Lebanese President Joseph Aoun stands between Speaker of Parliament Nabih Berri and caretaker Prime Minister Najib Mikati (dpa)
Lebanese President Joseph Aoun stands between Speaker of Parliament Nabih Berri and caretaker Prime Minister Najib Mikati (dpa)

A broad internal consensus, encompassing both political and economic dimensions, is taking shape to adopt the principles outlined in the presidential inauguration address as the foundation of the new government’s program and ministerial statement. This approach aims to sustain Lebanon’s immediate and strong positive momentum, which is reinforced by widespread support on both Arab and international levels.

Economic bodies and professional unions representing business sectors have openly expressed their relief and full support for the strategic directions set by President Joseph Aoun following his election. However, they have made it clear that maintaining this positive momentum depends on the formation of a reform-oriented rescue government, composed of competent, experienced, and honest ministers. This government must also collaborate constructively with the president.

According to a senior financial official, the rescue mission will be challenging due to years of governmental inaction and constitutional voids, which led to a deterioration in public sector operations and the accumulation of economic, financial, and monetary crises over the past five years. These challenges were further compounded by a devastating war, which inflicted severe human and financial losses estimated at approximately $10 billion, thereby worsening the country’s financial gap, now estimated at $72 billion.

Economic and banking circles are looking to the new government to swiftly capitalize on extensive international support by restoring trust and reestablishing financial channels between Lebanon and its regional and international partners. Key to this effort are explicit and transparent commitments to combating illegal economic activities, corruption, smuggling, money laundering, and drug trafficking. In parallel, the government must prioritize strengthening judicial independence and implementing strict controls over land, sea, and air borders.

The national consensus evident in the presidential election, according to Mohammad Choucair, head of Lebanon’s economic associations, paves the way for constructive collaboration among political factions. This collaboration is crucial for addressing challenges, rebuilding the state, and benefiting from renewed international and Arab—particularly Gulf and Saudi—interest in Lebanon. Choucair emphasized the importance of normalizing relations with Gulf nations, supporting Lebanon’s recovery, and providing resources for reconstruction efforts.

One of the urgent tasks for the new government, according to the financial official, is revisiting the draft 2024 state budget, which was previously submitted to parliament. Adjustments are necessary to address fundamental discrepancies in expenditure and revenue projections, taking into account significant changes brought about by the Israeli war.

Ibrahim Kanaan, chairman of the Parliamentary Finance Committee, described the budget as “unrealistic, if not entirely fictitious,” particularly in its revenue estimates. He pointed out that revenue increases were based on income and capital taxes, internal duties, and trade-related fees, all of which have been severely impacted by the war.

Reassuring depositors, both domestic and expatriate, who have suffered massive losses over recent years, is another pressing issue. These losses were exacerbated by the inability of successive governments to implement a comprehensive rescue plan addressing the $72 billion financial gap fairly. The situation was worsened by mismanagement in the electricity sector and the squandering of over $20 billion in central bank reserves following the onset of the financial crisis.

In response to Aoun’s commitment to a fair resolution for depositors, the Association of Banks in Lebanon welcomed his emphasis on safeguarding deposits. It also expressed its readiness to collaborate with the central bank and the government to protect depositors’ rights, citing a recent State Council ruling that prohibits any financial recovery plans from including measures that would erode depositors’ funds.

In its final session, the caretaker government addressed long-standing creditor issues by unanimously agreeing to suspend Lebanon’s right to invoke statutes of limitations on claims by foreign bondholders under New York law. This suspension, effective until March 9, 2028, aims to facilitate future negotiations.

With this decision, the caretaker government tacitly acknowledged Lebanon’s pending debt obligations, including over $10 billion in suspended interest payments on Eurobonds and approximately $30 billion in principal debt. The resolution now awaits direct negotiations under the new administration, which faces the challenge of resolving a nearly five-year-old crisis triggered by the previous government’s uncoordinated decision to halt payments on all Eurobond obligations through 2037.

Caretaker Finance Minister Youssef Khalil emphasized that despite the difficult circumstances, “Lebanon remains committed to reaching a fair and consensual resolution regarding the restructuring of Eurobond debt.”