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Major Chinese Investors in Talks to Take Aramco Stake

Major Chinese Investors in Talks to Take Aramco Stake

Friday, 30 April, 2021 - 07:45
General view of Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia May 21, 2018. REUTERS/Ahmed Jadallah/File Photo

Major Chinese investors are in talks to buy a stake in Saudi Aramco, several sources told Reuters on Wednesday, as Saudi Arabia's state oil firm prepares to sell another slice of its business to international investors.

Saudi Crown Prince Mohammed bin Salman, Deputy Prime Minister and Minister of Defense, announced on Tuesday that Saudi Arabia was looking to sell one percent of Aramco to “one of the leading energy companies in the world.”

He also said it could sell additional Aramco shares to other international investors.

“There are talks with other companies for different stakes, and part of Aramco’s shares could be transferred to the (Saudi) Public Investment Fund and a part listed on the Saudi bourse,” he said in an interview aired by Saudi TV marking the fifth anniversary of Vision 2030.

A stake of 1 percent would equate to around $19 billion based on Aramco's current market capitalization.

Sovereign wealth fund China Investment Corporation (CIC) was among those that could invest, two sources told Reuters.

Aramco was talking to CIC, as well as Chinese national oil companies, said one of the sources close to CIC.

CIC did not comment on the story. None of the other Chinese companies could be reached immediately for comment.

Aramco had been in touch with Chinese investors for a few years and CIC is the most likely investor, said the second source with a state-backed private equity fund.

"The Kingdom does have close relations with China," said a third source, who is close to Aramco. "The major shareholder will decide what to do with their shares."

Saudi Arabia, the world's biggest oil exporter, retained its position as China's biggest crude oil supplier for a seventh consecutive month in March.

Another source said before the COVID-19 pandemic, Aramco had toured around China looking for investors, talking to all the major state investors with overseas money, but few were interested. CIC and China's Silk Road Fund were also among the firms they approached.

Aramco, the world's biggest oil company, listed on the Saudi bourse in late 2019, raising $25.6 billion in the IPO and later sold more shares under a "greenshoe option" to raise the total to $29.4 billion.

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