Saudi Arabian Oil Co (Aramco) is seeking to hire a bank to advise on plans to buy natural gas assets, according to people familiar with the matter, ahead of what could be the world’s biggest share sale.
Aramco in late last year invited international banks to pitch for the advisory role to help identify acquisition targets, said the people, asking not to be identified as the information is private.
Aramco declined to comment.
The company is looking for natural gas assets anywhere from the US to East Africa and Russia as the kingdom’s state-owned energy giant hunts for ways to meet soaring domestic demand, Saudi Arabian Minister of Energy and Industry Khalid al-Falih, who is also Aramco chairman, said last month.
Saudi Arabia diverts tens of millions of barrels of crude every year into its electricity generation plants, particularly during the peak air-conditioning season in the summer. It does not produce enough gas to supply its power stations. Most of the gas it does pump goes to its fast-growing petrochemicals industry.
Aramco is also said to have invited banks to pitch for a role as coordinators and bookrunners for its planned initial public offering (IPO) later this year.
The company plans to appoint a group of banks for the deal early this year, the people said.
Saudi Arabia is seeking to sell as much as 5 percent of Aramco as part of a plan by Crown Prince Mohammed bin Salman to set up the world’s biggest sovereign wealth fund and reduce the economy’s reliance on hydrocarbons. The sale could be the largest ever, based on the government’s US$2 trillion valuation of the company.
Saudi Arabian officials in October last year reassured investors at a business conference in Riyadh that plans for the Aramco offering were still on track to take place this year, dispelling reports that the process was delayed.
The arrests the following month of Saudi Arabian princes and officials accused of corruption would not harm foreign investment or the kingdom’s plan for the IPO, al-Falih said at the time.
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