Saudi Aramco, the world’s most significant oil producer, is weighing the sale of a stake in its pipeline unit to raise cash amid a plunge in crude prices, based on individuals familiar with the matter.
Aramco may need to boost cash this year as it confronts a historic turmoil in oil prices and a burgeoning list of spending duties. The corporate has reaffirmed its commitment to pay out $75 billion in dividends this year and also needs to make the first installment for its $70 billion purchase of a stake in chemical compounds producer Saudi Basic Industries.
Aramco, the world’s most valuable publicly traded firm after selling stocks on the Riyadh exchange last in 2019, may raise over $10 billion from the sale, the individuals stated, asking not to be recognized as the information is private. Aramco has already held some preliminary talks with potential advisers on the deal; however, the discussions are still at an initial level, and Aramco may decide against a sale, the people stated.
Aramco is increasing oil supply at a time demand is falling off a cliff as travel bans are imposed on people all all over the world to cease the spread of coronavirus. The company has stated it’ll keep overwhelming the market with historic levels of oil at least through May; however, the further volume isn’t enough to compensate for the 67% plunge in prices this year.
Neighboring Abu Dhabi has raised $4 billion from investors such as KKR & Co. and BlackRock in a similar bid to the one Aramco is now contemplating.