Russian investors offer to buy Saudi Aramco stake

State oil giant Saudi Aramco has reportedly been approached by Russian investors with a proposal to acquire a stake as it prepares for an initial public offering.

Arab News cited sources as confirming that the approach is being considered alongside several other share sale options ranging from an originally proposed dual listing to a combined public and private sale.

This includes the possibility of a joint investment by Chinese and Russian investors, following reports last year of an offer to buy a 5 per cent stake in Aramco outright by Chinese state-owned oil companies PetroChina and Sinopec.

Read: China offers to buy 5% of Saudi Aramco directly

Aramco is expected to list a 5 per cent stake in the second half of the year in a deal that could raise $100bn if the company achieves the $2 trillion valuation hoped for by government officials.

The IPO is expected to include a local listing on the Saudi stock exchange and an international component involving New York, London, Hong Kong or all three markets.

Read: Hong Kong, London, New York shortlisted for Aramco IPO

Reuters reported on Tuesday that Russia’s pension funds were considering an investment in Aramco when it lists.

The head of Direct Investment Fund, Kirill Dmitriev, told the newswire that such a deal could cement ties between Saudi Arabia and Russia following their cooperation on oil production cuts over the last year.

This has seen prices almost double from their 2016 lows to $70 a barrel.

“Extending such cooperation for many more years would be very useful for the market. It has proven its efficiency, when we were targeting balancing supply and demand rather than targeting a particular oil price,” he added.