Saudi Aramco has advanced plans to sell stakes in a package of energy-related assets and property that could generate as much as $35 billion, people familiar with the matter told reporters. The move represents the largest privatization initiative in the company’s 93-year history and follows an $11 billion lease deal for certain natural gas facilities arranged by a BlackRock Inc.-led group.
According to those people, the company is targeting minority transactions in midstream and downstream operations while retaining complete ownership and control of its upstream oil production. Bankers and dealmakers cited by the same sources expect Aramco to broaden the set of assets offered to global private equity and infrastructure investors in coming transactions.
The proposed disposals are intended to present fresh opportunities for Wall Street firms and other international investors. They also align with a stated goal to increase foreign investment entering Saudi Arabia - a metric that currently remains below official targets, according to the cited sources.
Executives in Dhahran have accelerated plans for multiple divestments since the natural gas lease was signed with the BlackRock Inc.-led group and in the wake of the deal attributed to BlackRock’s Global Infrastructure Partners, the sources said. Despite the onset of a regional war on Feb. 28, the asset sales are expected to attract interest from large global funds and institutional investors.
Operationally, Aramco has continued exports as the conflict disrupted Gulf shipments. The company rerouted the majority of its cargo away from the Strait of Hormuz and sent flows via its East-West pipeline to the port of Yanbu as traffic through the waterway slowed, the people familiar with the matter said.
Market participants and advisers are watching closely for which specific downstream and midstream assets Aramco will place on offer and the timeline for any transactions. While the company is said to be prepared to sell only minority stakes in those assets, the decisions are expected to shape incoming foreign capital flows and provide deal-making opportunities for infrastructure and private equity investors.
Details on the precise mix of energy facilities and real estate to be marketed, as well as a timetable for sales, were not disclosed by the sources. The scope and pace of the program remain subject to further announcements from Aramco.