As Saudi Arabia prepares to sell one percent of state oil firm Aramco, sources said major Chinese investors are in talks to buy the stake, including sovereign wealth fund China Investment Corporation (CIC) and other Chinese national oil companies.
In televised remarks on Tuesday, Crown Prince Mohammed bin Salman acknowledged Saudi Arabia was in discussions to sell 1 percent of Aramco to a leading global energy company and could sell further shares including to international investors within the next two years.
A stake of 1 percent would come to some $19 billion, based upon Aramco’s current market capitalization.
Aramco had been in discussions with Chinese investors for some years, and CIC is the most likely investor, said the source.
“The kingdom does have close relations with China,” said another source, who is close to Aramco. “The major shareholder will decide what to do with their shares.”
Saudi Arabia, the world’s largest oil exporter, retained its position as China’s major crude oil supplier for a seventh consecutive month in March.
Aramco officials visited China before the COVID-19 pandemic in search of investors and held discussions with all major state investors with overseas money, but few were interested. CIC and
China’s Silk Road Fund was among the firms they approached.
Aramco, the world’s largest oil company, listed on the Saudi bourse in late 2019, raising $25.6 billion in its IPO and later sold more shares under a “greenshoe option” to raise a total of $29.4 billion.
“There are talks now for the acquisition of a 1 percent stake by a leading global energy company in an important deal that would boost Aramco’s sales in … a major country,” Prince Mohammed said, without elaborating.
“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 on Saudi TV.
The 2019 Aramco IPO was seen as a pillar of the economic diversification program aimed at attracting foreign investment.
In the interview, Prince Mohammed said Riyadh was strengthening its relationships with China, India and Russia, and that the United States remained a strategic partner, despite differences with the Biden administration, which has taken a tougher stance on Saudi Arabia.
