Saudi Aramco, the region’s largest multinational oil company is exploring a bold move to open up one of the world’s largest unconventional gas reserves to international investors as part of its $110 billion strategy to help the company diversify its revenue streams away from oil.
According to sources, the state-controlled company is working with an adviser to raise new stock or debt for its large Jafurah site and has begun preliminary discussions with potential investors, including major commodity dealers.
Deal including Jafurah oil reserve could be marked as a rare instance of Aramco inviting external investors to hold stakes in its upstream oil and gas assets. Attempts to bring in big oil corporations to help develop reserves in the late 1990s failed. As a preliminary to such a potential move, the company initiated an assessment of its upstream operations early this year.
Saudi Arabia’s leadership has made the Jafurah field a priority as they seek to enhance gas production and reduce dependency on petroleum exports. The site is anticipated to contain 200 trillion cubic feet of premium raw gas, with Aramco planning to start production there in 2024.
Since the complete nationalization of Saudi Aramco in 1980, most international investment in the kingdom’s energy industry has been limited to downstream assets like refineries and petrochemical plants. Aramco has already formed joint ventures for natural gas exploration and drilling within its borders with companies such as Royal Dutch Shell Plc and TotalEnergies.
Aramco has been increasingly extending its doors to foreign investors to help finance both its $75 billion dividend commitment and large capital expenditure needs since going public in 2019. In June, it raised $12.4 billion by selling a share in a subsidiary that leases a network of oil pipelines across the country. A similar deal for its gas pipelines is in the works.
