Saudi Aramco (2222.SE) is scouting for other potential deals to offer to investors and unlock capital, Chief Executive Amin Nasser said on Monday after the oil giant in June closed a $12.4 billion deal for its crude pipeline network.
“We are looking at the potential for other deals that we are currently in negotiation (about),” Nasser said on a call with analysts.
Aramco had reached out to banks to pitch for an advisory role to help finance the sale of a significant minority stake in its gas pipelines, three sources told Reuters in June. The gas pipeline stake sale will be a “copy paste” of the oil pipeline deal, one of the sources said. Aramco declined comment.
Aramco and other Gulf oil producers are following in the footsteps of Abu Dhabi with plans to raise tens of billions of dollars through the sale of stakes in energy assets, capitalising on a rebound in crude prices to attract foreign investors.
Nasser also told the briefing there were opportunities for the company in the hydrogen market. He said Aramco was looking for offtake agreements with potential buyers before it can expand its output in hydrogen, but added he sees strong potential for growth and exports.
“We are looking to capture a big percentage of that market, we have an advantage,” Nasser told the analysts’ briefing.
An offtake agreement occurs between a producer and a buyer to purchase or sell portions of the producer’s upcoming output.
Countries across Europe and North America are looking at ways to produce emissions-free hydrogen to help reduce carbon emissions and avert global warming.
Abu Dhabi National Oil Co (ADNOC) in partnership with Fertiglobe this month sold its first cargo of blue ammonia to Itochu Corp (8001.T) in Japan, for use in fertiliser production, it said on Aug. 3.
In related news Saudi Arabia said on Monday it posted a deficit of 4.6 billion riyals ($1.23 billion) in the second quarter, a huge drop from 109.2 billion riyals reported in the same quarter a year ago amidst a crash in oil prices.
The kingdom, the Arab world’s largest economy and the world’s top oil exporter, realised revenues of 248 billion riyals, with oil income rising 38% year-on-year to 132.15 billion in the second quarter.
Non-oil revenues climbed to 115.96 billion riyals from 38.23 billion riyals a year earlier.
Saudi Arabia’s economy grew in the second quarter for the first time since the coronavirus pandemic began 18 months ago, fuelled by a 10.1% growth in the non-oil sector, according to government data.
A Finance Ministry report said public expenditure in the second quarter amounted to 252.7 billion riyals, up 4% from the same quarter last year.
The kingdom had last year introduced measures such as tripling of a value-added tax and removal of a cost of living allowance to replenish state coffers depleted by the historic slide in crude prices and as the pandemic damaged non-oil revenues.
This along with consolidation measures had allowed the government to reduce the budget in the first quarter of 2021.
The budget deficit had ballooned to over 11% of gross domestic product last year, according to International Monetary Fund estimates. The IMF expects Saudi Arabia to bring down its fiscal deficit to 4.2% of GDP this year.