Aramco Considers Opening $110 Billion Gas Project to Investors
Saudi Aramco is considering a bold move to open up one of
the world’s largest unconventional gas fields to foreign investors, as it looks
to fund a $110 billion project to help it diversify from oil sales, people
familiar with the matter said.
The state-controlled producer is working with an adviser as
it explores raising new equity or debt for its vast Jafurah site, the people
said, asking not to be identified because the information is private. It has
started preliminary talks with potential investors including large commodity
traders, according to the peope.
Deliberations are in the early stages and Aramco could
decide to pursue other ways of gathering money to fund the Jafurah development,
the people said. A representative for Aramco declined to comment.
Any deal involving Jafurah would mark a rare example of
Aramco allowing external investors the chance to hold stakes in its upstream
oil and gas assets. Previous attempts in the late 1990s to bring in Big Oil
companies to help develop reserves failed. The company began a review of its
upstream business earlier this year as a precursor to such a potential move.
Saudi Arabia’s gas reserves are the largest in the Arab
world after Qatar, according to BP Plc. The Jafurah field is a priority for the
kingdom’s rulers as they look to reduce a reliance on crude exports. The site
is estimated to hold 200 trillion cubic feet of rich raw gas, and Aramco
expects to begin production there in 2024, reaching about 2.2 billion standard
cubic feet per day of sales by 2036.
Since Aramco was fully nationalized in 1980, most foreign
investment in the kingdom’s energy industry has been restricted to downstream
assets such as refineries and petrochemical plants. In the past, Aramco has
struck joint ventures with firms including Royal Dutch Shell Plc and
TotalEnergies SE for the exploration and drilling of natural gas within its
borders.
Aramco has increasingly been opening its doors to overseas
investors since going public in 2019 to help finance both its $75 billion
dividend commitment and large capital expenditure requirements. It completed
the sale of a stake in a unit that leases a network of oil pipelines across the
country in June, raising $12.4 billion. A similar deal for its gas pipelines is
in the works.
Under Chairman Yasir Al-Rumayyan, who also heads Saudi
Arabia’s powerful sovereign wealth fund and is a key adviser to Crown Prince
Mohammed Bin Salman, Aramco has started to evaluate ways to monetize assets.
The company reshuffled senior leaders last year and created a division led by
Abdulaziz Al-Gudaimi focused on “portfolio optimization” and boosting access to
growth markets.
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