American investment entities Apollo Global Management (AGM) and Global Infrastructure Partners (GIP) are among the suitors who bid for a roughly $10 billion stake in Saudi Arabian Oil Company’s (Aramco) oil pipelines, according to sources.
Canada’s Brookfield Asset Management, BlackRock, sovereign wealth fund China Investment Corp and Beijing-backed Silk Road Fund have also made non-binding offers, the people said.
Aramco is studying the proposals before deciding which companies will be invited to make binding offers, sources said. Bidders may team up later in the process. Some prominent family-owned groups in Saudi Arabia are also considering partnering with other investors.
The world’s largest oil company is considering asset disposals as a way of maintaining its $75 billion of annual dividend payments, almost all of which go to the Saudi government. That payout, which is the biggest of any listed company in the world, became harder to sustain after the coronavirus pandemic caused crude prices to plunge last year.
While prices have risen since November, that’s in large part because members of the OPEC+ (Organization of the Petroleum Exporting Countries) cartel, including Saudi Arabia, have restricted production.
Aramco is lining up a loan of about $7.5 billion that will be offered to investors in the oil pipelines, people familiar with the matter said last month. The company hired New York-based investment bank Moelis & Co. last year to devise a strategy for selling stakes in some subsidiaries, according to reports.
Representatives of Apollo, Aramco, BlackRock, Brookfield, CIC, GIP and Silk Road Fund declined to offer any comments.