Saudi Aramco said it is in preliminary discussions to purchase a stake in Saudi petrochemical maker SABIC, as it looks to expand its downstream footprint and reduce reliance on crude oil.
Aramco said in a statement that it was engaged in very early-stage discussions with the kingdom’s Public Investment Fund to acquire the stake in SABIC through a private transaction.
“Consistent with the company’s strategy of rebalancing its portfolio by moving further into downstream and the petrochemical sector in particular, the company has been evaluating a number of acquisition opportunities, both local and global,” Aramco said.
The discussions are preliminary and may not results in a transaction, it added.
Riyadh-listed SABIC, the world’s fourth-biggest petrochemicals company, is 70 per cent owned by the Public Investment Fund (PIF), Saudi Arabia’s top sovereign wealth fund. It has a market capitalization of 385.2 billion Saudi riyals (US$102.7 billion).
Aramco is pushing forward with investments in refining and petrochemicals as part of its downstream strategy to reduce dependency on crude sales in the event of demand decline, as well as to secure new markets for its oil. Boosting its downstream portfolio ahead of a potential listing next year of 5 per cent of Aramco shares will also help attract investors.
