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Saudi Aramco, UAE’s ADNOC Plan New Asset Sales

The biggest state-held oil firms in the Middle East, including Saudi Aramco and the Abu Dhabi National Oil Company (ADNOC), consider selling more assets to investors to monetize stakes in their various downstream and upstream businesses as prices rise, sources have told Reuters.

Saudi Arabia’s giant Aramco considers sales of part of upstream and downstream assets, including its gas pipelines and stakes in refineries and power plants, two sources with knowledge of the plans told Reuters.

Earlier this year, Bloomberg reported, quoting sources familiar with the matter, that Aramco, which operates all upstream oil and gas assets in Saudi Arabia under a multi-decade concession deal with the Kingdom, was reviewing its upstream business and could decide to sell stakes in some not-so-strategic fields to external investors.  

Aramco has already made one major asset sale deal this year—it sold a 49-percent stake in its pipeline business to a consortium led by U.S. EIG Global Energy Partners for $12.4 billion.

“We plan to continue to explore opportunities to capitalize on our industry-leading capabilities and attract the right type of investment to Saudi Arabia,” Aramco’s president and chief executive Amin Nasser said at the closing of the deal in June.

In the UAE, ADNOC is getting ready for an initial public offering (IPO) of its drilling business and aims to attract foreign investors to it, sources with knowledge of the deal told Reuters.

ADNOC has already raised billions of U.S. dollars from energy asset deals, including the sale of a 49-percent stake in its gas pipelines last year, for $10 billion. This sale marked the start of asset sales from Gulf oil producers, who are looking to raise cash and attract investors.

According to Reuters’ sources, Oman and Bahrain are also looking to monetize assets via stake sales or IPOs.

In April this year, Bloomberg reported that the government of Oman was looking at several options to plug the widened budget hole, including selling a stake in state oil firm OQ via an initial public offering (IPO).

OQ is also reportedly looking to sell assets and tap the international debt market in order to fund its planned $7.9 billion expenditures over the next five years.  

By Tsvetana Paraskova for Oilprice.com

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