The Saudi Arabian public petroleum and natural gas company, Saudi Aramco has agreed to sell its minority stake of $12.4 billion in a newly formed oil pipeline business to a US based EIG Global Energy Partners.
It is Saudi Aramco’s largest deal since its record $29.4 billion initial public offering in late 2019. The deal comes as the kingdom seeks to monetise its untouchable assets to generate revenue for the Saudi government.
The oil firm Saudi Aramco said in a statement
“Upon closing, Aramco will receive upfront proceeds of around $12.4 billion, further strengthening its balance sheet through one of the largest energy infrastructure deals globally,”
“As part of the transaction, a newly-formed Aramco subsidiary, Aramco Oil Pipelines Company, will lease usage rights in Aramco’s stabilised crude oil pipelines network for a 25-year period.”
The US based EIG-led consortium will hold a 49 per cent stake in the subsidiary Aramco said it will retain full ownership and operational control and the oil firm will have a 51% stake in the new company.
EIG, which has invested more than $34 billion in energy and energy infrastructure, was the deal’s underwriter and will work with Aramco in the coming days to decide on other parties for the consortium.
The Chief Executive Officer of Saudi Arabia, Amin H. Nasser said:
“We will continue to explore opportunities that underpin our strategy of long-term value creation.”
Abu Dhabi’s National Oil Co (ADNOC) has signed similar deals over the last two years, raising billions of dollars through sale-and-leaseback agreements tied to its oil and gas pipelines.
Aramco said it stuck to its commitment of paying shareholders dividends worth $75 billion in 2020 — an amount that exceeds the declared profit and available cash flow.
