Saudi Aramco completes $12.4-bn share sale

Saudi Aramco has announced the completion of a $12.4 billion sale in its natural gas pipeline to an international investor consortium. The consortium consists of a broad cross-section of investors from North America, Asia and the Middle East, in which it acquired a 49-percent stake in Aramco Oil Pipelines Co, the Saudi Press Agency (SPA) reported on Saturday

As part of the transaction, first announced in April 2021, Aramco and its subsidiary entered into a 25-year leaseback agreement for the oil giant's stabilised crude oil pipelines network, Xinhua news agency quoted the SPA as saying. Further, Saudi Aramco chairman and Governor of the Kingdom's wealth fund Public Investment Fund, Yasir Al-Rumayyan, may be inducted on the board of Reliance Industries Ltd, a precursor to a $15 billion deal, reports said.

An announcement of Al-Rumayyan's induction on the RIL board or the board of the newly carved oil-to-chemical (O2C) unit may come as early as at the company's annual shareholder meeting on June 24. Aramco Oil Pipelines Co. will receive a tariff payable by Aramco for stabilised crude oil flows, backed by minimum volume commitments. Aramco continues to hold a 51 per cent majority stake in the subsidiary and retains full ownership and operational control of its stabilised crude oil pipeline network.

The transaction does not impose any restrictions on Aramco's actual crude oil production volumes, which are subject to production decisions made by the Kingdom. "The interest we have received from investors shows strong confidence in our operations and the long-term outlook for our business," Aramco President & CEO Eng, Amin H. Nasser said in a statement on Saturday.

He said his company would continue to explore opportunities to capitalise on the industry-leading capabilities and attract the right type of investment to Saudi Arabia.

"RIL's Annual General Meeting (AGM) has historically been a keenly watched event (previously attended by 3,000 shareholders when held in physical format and last year saw 300,000 concurrent viewers of the virtual AGM across 42 countries and 468 cities) given that it has been one of the top 3 companies by market capitalisation in India, has a large free float and a large public shareholding (more than 3 million non institutional shareholders)," brokerage HSBC Global Research said in a report. And expectations are already built up for the AGM. "Over the last year, new investors have joined RIL's digital and retail business at subsidiary level and RIL has formed new partnerships with global players like Google, Facebook, Microsoft, Qualcomm etc. Investors now expect RIL to give direction to these businesses and announce groundbreaking products," it said, adding reports suggest that it will likely announce a new smartphone partnered with Google and its pricing.