Saudi Arabia’s energy giant is in advanced talks to sell up to a 49% stake in its oil pipelines to a consortium of U.S., Chinese and local investors for between $10 billion and $15 billion, according to people familiar with the matter.
Saudi Arabian Oil Co. , known as Aramco, is in talks to sell the minority stake to a group of investors that could include U.S. buyout giant Apollo Global Management Inc., energy investment firm EIG Global Energy Partners, Chinese infrastructure fund Silk Road Fund, and China Reform Fund Management Co., a Chinese private-equity fund, along with Saudi pension funds, the people said.
The final structure of any winning group is still in flux, these people said, and talks could still collapse. One possibility is that either Apollo or EIG drop out of the consortium, according to people familiar with the matter. That would help ensure all players in the group have enough equity in the deal to make it worth their while.
Still, there is recent precedent for two Western anchor private-equity investors teaming up. Abu Dhabi National Oil Co. successfully convinced BlackRock Inc. and KKR & Co. to drop their individual bids and join forces to secure a $4 billion midstream pipeline deal in 2019.
Under any agreement, Aramco is aiming to sell the minority stake for between $10 billion and $15 billion in a deal that could value Aramco’s network of oil pipelines at more than $20 billion, these people said. A deal could be announced as soon as this week.