Saudi Arabia-based oil company Aramco is planning to sell its stake in its pipeline unit in order to raise cash to help the company deal with the slump in global oil prices, the local media reported.
Reportedly, Aramco is looking to raise capital ahead of its distribution of $75 billion in dividends through 2020 and payments for its $70 billion acquisition of the chemicals producer Saudi Basic Industries.
Aramco could raise around $10 billion from the sale of its stake in its pipeline unit.
Aramco has already held some preliminary discussions with potential advisers on the deal, but talks are still at an early stage.
Previously, Aramco Chairman Yasir Al Rumayyan told the media, “We have a lot of assets that could be monetised because they are non-core assets, which can improve the performance of the company.”
The oil price war and the coronavirus pandemic have heavily affected the company’s spending plans.
Negotiations between Saudi Arabia, which is the unofficial leader of OPEC, and Russia collapsed as the latter did not agree with OPEC’s decision to slash oil production in light of the Covid-19 outbreak.
Earlier this month, Aramco announced that it will increase crude production by 300,000 barrels per day over the company’s maximum sustained capacity of 12 million barrels.
The move to increase crude production is a part of the Saudi government’s plan to stay competitive in the global oil market amid a price war with Russia.
Aramco has also decided to reduce refinery runs in April as well as in May in order to boost oil output. The Saudi government has directed Aramco to continue supplying 12.3 barrels of oil per day.