Saudi Aramco is considering raising cash through selling a stake in its pipeline unit amid the collapse of oil prices, Bloomberg reported, citing people familiar with the matter. According to the sources, the world’s largest oil producer could raise more than $10 billion from the sale. The company should raise cash this year to pay its promised $75 billion in dividends and $70 billion acquisition of SABIC.
The sources said that the world’s most valuable public company had held some preliminary discussions with potential advisers on the deal. However, the talks are still in early stages, and Aramco may decide to abandon the plan, the sources noted.
Saudi Arabia is in a market share war with Russia, where it pledged to flood the market with record levels of crude until at least May. The excess supply, however, cannot offset the 67% drop in prices this year. It also remains unclear which customers would absorb the extra oil as the COVID-19 pandemic destroys demand for refined products.
The oil crash has already forced the company to slash its spending plan. Aramco’s capex will be lowered to $25 billion-$30 billion this year. In its IPO prospectus, the oil giant initially planned to spend $35 billion-$40 billion this year.
