Saudi Aramco seeks project finance loan, prepares for IPO

Saudi Aramco has asked banks to submit proposals for a project finance loan of more than $1bn, two sources with direct knowledge of the matter told Reuters news agency.

The state oil company’s request for proposals (RFPs) was sent this week, one of the sources said.

It was not immediately clear from the RFP the specific nature of the projects the funds will be used for, the sources said.

The requests to banks went in a few days after a September 14 attack on two giant Aramco plants that initially halved the crude output of the world’s top oil exporter, by shutting down 5.7 million barrels per day (bpd) of production. 

Aramco’s Chief Executive Amin Nasser has said the company, which is preparing for an initial public offering (IPO), was still in the process of estimating repair work but that it was “not that significant,” given the company’s size.

Saudi Arabia has restored its oil production capacity to 11.3 million bpd after the attacks on the facilities, three sources briefed on Saudi Aramco’s operations told Reuters, while Saudi Energy Minister Prince Abdulaziz bin Salman, and the chief executive of state oil company Aramco, Amin Nasser, have said output will be fully back online by the end of September.

Aramco, the most profitable oil company in the world, earlier this year raised $12bn with its first international bond issue after receiving more than $100bn in orders. 

Last year, Aramco and Malaysia‘s Petronas approached banks to replace a short-term $8bn loan raised for a joint venture with long-term financing of approximately the same size, banking sources said.

Aramco is preparing for the domestic leg of its IPO, although some investors and sources close to the company’s thinking say it is unlikely to proceed with a listing this year after the attacks. 

Aramco officials are meeting bank analysts this week in the northeastern city of Dhahran as part of the preparations for the IPO, two sources said.

The news came as Bloomberg reported that Aramco was planning to formally announce the start IPO next month, citing “people with knowledge of the matter”.

The oil giant is aiming to float around October 20, according to those cited by Bloomberg, who asked not to be named because the information is private, adding that a possible listing on the Saudi stock exchange could happen as early as November, but there is no finalised timetable.

Aramco was not immediately available to comment on either report.