Aramco closes $12.4 bn oil pipeline deal, looks for more deals to unlock capital
11 August 2021
Saudi Aramco is looking to unlock capital through sale of stake to potential investors, the company’s chief executive Amin Nasser said on Monday after the oil giant in June closed a $12.4 billion deal for its crude pipeline network.
The oil and gas giant, which was to acquire a majority stake in Reliance Industries’ oil and gas assets, is now reported to be looking to sell a significant minority stake in its gas pipelines, Aramco is tapping banks to finance the sale of stake in its gas pipelines, reports said.
"We are looking at the potential for other deals that we are currently in negotiation," Nasser said during an analyst call.
Saudi Aramco has reported net income of $25.5 billion for the second quarter ended 30 June 2021, a 288 per cent increase compared to the same quarter of the previous. The company also declared a dividend of $18.8 billion.
The company’s net income for the first half of the year stood at $47.2 billion, showing a 103 per cent increase over the same period in 2020. The results were primarily driven by higher oil prices and a recovery in worldwide demand, supported by the global easing of pandemic caused by the Wuhan virus, vaccination campaigns, stimulus measures and accelerating activity in key markets.
“Our historic $12.4 billion pipeline deal was an endorsement of our long-term business strategy by international investors, representing significant progress in our portfolio optimization program. Our landmark $6 billion Sukuk reinforced our robust balance sheet, further diversifying our funding sources and expanding our investor base. And, once again, we delivered a dividend of $18.8 billion for our shareholders.
Aramco had, in June, roped in an international investor consortium that included EIG and Mubadala to conclude a successful share sale and purchase agreement, in which the consortium had acquired a 49 per cent stake in Aramco Oil Pipelines Company, a subsidiary of Aramco, for $12.4 billion.
“We continue to move forward on a number of strategic programs, which focus on sustainability and low-carbon fuels, maximizing the value of our assets, and advancing our downstream integration and expansion journey. For all these reasons and more, I remain extremely positive about the second half of 2021 and beyond.”
The consortium consisted of a broad cross-section of investors from North America, Asia and the Middle East.
Aramco and other Gulf oil producers are planning to reduce dependence on oil and instead raise tens of billions of dollars through the sale of stakes in energy assets, capitalising on a rebound in crude prices.
Nasser also said Aramco is looking at opportunities for the company in the hydrogen market. He said Aramco was looking for potential buyers before it can expand hydrogen production, adding that there is strong potential for growth and exports.