Reports: China Offers to Buy 5% of Aramco IPO

Chinese state-owned oil companies PetroChina and Sinopec have written to Saudi Aramco in recent weeks to express an interest in a direct deal to purchase up to 5% of Saudi Aramco, according to an exclusive report in Reuters, in a move that would shelve the Company’s plans to list on international markets in favor of a direct sale.

The companies are part of a state-run consortium including China’s sovereign wealth fund, the sources told Reuters. If the company is valued at about $2 trillion as hoped by Saudi Arabia, that would raise $100 billion from Chinese investors directly.

One of the sources told Reuters: “The Chinese want to secure oil supplies…They are willing to take the whole 5 percent, or even more, alone.”

Meanwhile, Reuters is reporting separately that Saudi Aramco has asked Washington, D.C.-based FTI Consulting to suspend its investor relations advisory work related to the oil company’s planned initial public offering.

The report noted that while it was not immediately clear why FTI was asked to suspend its work for Saudi Aramco, the latest decision could broaden the role of media relations firm Brunswick, which was hired by Aramco for media relations for the IPO.