Saudi Aramco is in talks with U.S.-based global investment management corporation BlackRock and other investors on a planned deal worth over $10 billion to sell a stake in its pipeline business, sources told Reuters, although the deal is still in early stages.
The deal, internally dubbed “Project Seek,” is still in its initial phase and there is no formal decision on the investors yet, one of the two sources familiar with the matter told Reuters, which notes the deal resembles infrastructure deals signed this and last year by Abu Dhabi’s national oil company ADNOC. In June, ADNOC announced a US$20.7-billion deal with six international companies for the acquisition of a minority stake in Adnoc Gas Pipeline Assets.
The deal would provide an inflow of cash to Saudi Aramco, which is pledging to continue with annual dividends despite low oil prices and subdued global demand. According to OilPrice.com, Aramco has cut capital expenditure and is looking to optimize its portfolio and “squeeze” more value out of it, including by potentially selling assets, chief executive Amin Nasser told Energy Intelligence in an interview published last week.
“We’re going to do it right and will make sure what’s executed by this organization is in line with our long-term view — the strategy of retaining our core businesses in-house and what can be optimized with our partner,” Nasser told Energy Intelligence.
An unnamed source told Reuters that talks are underway, but “[t]here’s more work to be done. No buyers have been lined up, but there are talks.” Another source familiar with the matter said Brookfield Asset Management was also involved in the discussions.
