Saudi giants Aramco win $ 12.4 billion in oil pipeline deal

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Riyadh, 10 April 2021 (AFP) – Saudi Arabian oil giant Aramco will have $ 12.4 billion for an agreement with the United States Fund on the use of its pipeline network.

Saudi Arabia, the world’s largest oil exporter, is attempting to attract foreign investment and diversify its economy.

At the end of Friday, the company announced the signing of an agreement to form a joint venture with a consortium led by US fund EIG Global Energy Partners, which would be 49% against 51% for Aramco.

The joint venture, Aramco Oil Pipelines Company, will lease Aramco’s pipeline network for 25 years, the oil giant said in a statement, adding it would retain “full ownership and control of the network’s operations”.

The deal is expected to generate US $ 12.4 billion for Aramco, which in turn will pay a joint venture usage fee on the amount of oil passing through the network, without restrictions on volume.

Aramco has, in recent years, diversified the country’s economy, relying largely on hydrocarbons and where Crown Prince Mohammed bin Salman’s megaprojects have an oil revenue finance share.

In the context of the Kovid-19 epidemic affecting oil demand and the fall in prices, Saudi Arabia called in late March for an additional effort by large companies to encourage the private sector, called “Shariq ” where did it go. (“Partner” in Arabic).

– “New Opportunities” – The agreement on the use of its pipeline network “strengthens Aramco’s catalytic role in attracting significant foreign investment to the state”, the company said in its statement, at a time when Saudi Arabia would fund foreign funds Struggling to draw.

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Aramco did not specify the names of the other companies that make up the consortium.

“We are strategically taking advantage of new opportunities,” Aramco CEO Amin Nasser said in a statement.

In March, the company announced a 44.4% drop in its net profit in 2020, to $ 49 billion (41 billion euros), supporting a drop in oil prices. These results are based on Saudi finance.

Regardless of the situation, Aramco paid $ 75 billion in dividends to its shareholders, as it had promised to do at the time of its exit from the stock exchange in 2019.

Aramco’s dividend payment helps the Saudi government, the company’s main shareholder, manage the country’s huge budget deficit.

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Saudi aramco

Sarah Gracie

About the author: Sarah Gracie

Sarahis a reporter covering Amazon. She previously covered tech and transportation, and she broke stories on Uber's finances, self-driving car program, and cultural crisis. Before that, she covered cybersecurity in finance. Sarah's work has appeared in The Wall Street Journal, Bloomberg, Politico, and the Houston Chronicle.

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