Saudi Aramco has chosen Citigroup Inc. to help arrange a potential multibillion-dollar stake sale in its oil export and storage terminals business, according to people familiar with the matter.
The US investment bank was selected in recent days after a pitching process that drew proposals from several other Wall Street lenders, the people said, asking not to be identified as the matter is private.
The mandate is a win for Citigroup, whose Chief Executive Officer Jane Fraser has made a renewed effort to win business from large corporates and sovereign wealth funds in the Middle East. Aramco had tapped JPMorgan Chase & Co. as a sell-side adviser when it previously sold stakes in its oil and gas pipeline infrastructure in separate transactions.
The Saudi oil giant is expected to kick-off a formal sale process as early as next year and is likely to see interest from large infrastructure funds, the people said. Discussions are at an early stage and no final decisions have been made on the timing or structure of the transaction, they said.
Representatives for Citigroup and Aramco declined to comment.
Aramco is considering options including selling an equity stake in the business, Bloomberg News reported this week. It aims to raise billions of dollars from such a sale, people familiar with the matter said at the time.
The plans are part of a broader attempt by the firm to sell a range of assets, including potentially part of its real estate portfolio.
Oil prices have dropped about 16% this year and while the impact of that drop on Aramco’s earnings has been tempered by higher output, the firm has delayed some projects and looked to sell assets to free up cash for investments.
The deals now being considered would mark a step up from previous transactions that were focused on stakes in pipeline infrastructure.
Aramco’s main oil storage and export infrastructure is located at Ras Tanura on the Persian Gulf and the company has similar terminals on the Red Sea. Internationally, the firm owns stakes in product terminals in the Netherlands and leases crude as well as product storage at main trade hubs in Egypt and at Okinawa in Japan.
Earlier this year, a BlackRock Inc-led group signed an $11 billion lease deal for facilities that serve Aramco’s Jafurah gas project in the kingdom.
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