Oil Price: Aramco may acquire more global oil and gas assets

The American “Oil Price” website said that the Saudi oil company Aramco may acquire more global oil and gas assets, pointing out that Aramco’s growing financial resources, in addition to the support of the Public Investment Fund, may lead to further international expansion.

Important player:

Saudi Aramco’s role has long been viewed as that of a national oil company, deeply involved in the Kingdom’s operations and acting as an important player in the oil market. It avoided discussions about market power and the impact on oil prices, issues that often concern international oil companies such as Shell, Total Energy, Eni, and their American counterparts.

As of now, Saudi Aramco has been officially recognized as a national oil company, and is viewed by markets as a stable and conservative presence in the oil industry, according to the report. However, this perception is evolving, and the shift is happening faster than many analysts realize. While it is still owned and influenced by the strategies of the Saudi government and Crown Prince Mohammed bin Salman, Aramco has become an important international player. It acquired many assets in Europe, Africa and Latin America, and reshaped its overall structure so that it became closer to an international national oil company, rather than a traditional national oil company.‎

The report refers to the relationship between Aramco and the Public Investment Fund, as revenues, internal and external, flow between these two powerful entities, and a large portion of the capital flowing to the Public Investment Fund within the Kingdom comes directly from its properties and ownership of Aramco. At the same time, the Public Investment Fund is increasingly supporting international acquisitions in the oil and gas sector that perfectly align with Aramco’s interests.

ADES IPO:

Recently, attention has returned to the high-profile initial public offering of ADES Holding, a Saudi drilling giant backed by the Public Investment Fund. ADES announced the final price of the IPO, exceeding initial expectations and valuing the company at more than $4 billion. The IPO received significant interest from institutional investors, with total orders reaching $76.5 billion. This success confirms the attractiveness of the Saudi oil and gas sector

Reasons for success:

Addis’ success is closely linked to its significant presence in Saudi Arabia as a major driller for Aramco, but also points to opportunities for international expansion in the coming years. What started as an Egyptian drilling company has become a leading player, advancing Saudi interests not only in the Middle East and North Africa region, but potentially extending to Aramco’s endeavors in Africa and Latin America.

The Public Investment Fund acts as Aramco’s financial investment arm abroad, and we can expect more developments in the future. In 2022, the Public Investment Fund acquired minority stakes in several Egyptian entities linked to hydrocarbons, indicating growing interest in the energy sector in the region. Further investments in Egypt’s gas and oil infrastructure are possible, including a stake in an Arab energy company. In addition, TAQA Arabia has established a joint venture within the Kingdom, in line with the growing logistics and marine industrial investments in Saudi Arabia.

While the Public Investment Fund acquires a range of assets, Aramco is also active. Aramco’s acquisition of the Chilean company Esmax from the Southern Cross Group, with revenues of $2.5 billion in 2022, reflects its interest in expanding the field of manufacturing industries in Latin America. While this step opens the doors for Aramco to secure outlets for its refined products and enhance international retail operations, especially for lubricants bearing the Valvoline brand.