Saudi Arabia’s energy major Aramco is considering selling a stake in its sulfur business, eyeing proceeds of up to $7 billion, Reuters has reported, citing unnamed sources.
The value of Aramco’s infrastructure assets could be as high as $50 billion, one of the Reuters sources told the publication. This gives Aramco a pretty comfortable asset sale base—and sulfur right now is very hot, after the Middle East war disrupted a solid chunk of global supply for a vital commodity with multiple applications across industries.
The company has been raising cash by selling stakes in infrastructure holdings for a while now, to offset the effect of persistently low oil prices over the last two years. The war-triggered price surge earlier this year helped with revenues but now prices are down again as the United States and Iran sign their preliminary peace deal.
Aramco is the biggest contributor to Saudi Arabia’s budget revenues and a vital source of funding for government projects. Because the Saudi government is quite ambitious with such projects, the budget breakeven price of oil has gone up to over $90 per barrel—even though Aramco has some of the lowest production costs in the world at its conventional oilfields.
Earlier this year, reports said Aramco was eyeing up to $10 billion from asset sales in its real estate division, including its Dhahran Camp residential community in the Eastern Province of the Kingdom.
Last year, the company struck an $11-billion deal with a group of investors led by BlackRock for the lease of midstream facilities at Aramco’s massive Jafurah gas project, which has a price tag of $100 billion. It is the first unconventional gas project in the kingdom of this scale. As part of the deal, the investor group will lease the facilities back to Aramco for a period of 20 years.
By Irina Slav for Oilprice.com
