RIYADH: Saudi Aramco has hired Evercore Inc to advise on a major restructuring that would create a standalone gas division and open the door to a potential future listing of the unit, according to sources.
A split could help bring new investment into the gas unit or potentially lead to an initial public offering (IPO) or a minority listing valuing the business at over US$100bil, the sources said.
Deliberations are continuing, and the plans could change, said the sources.
Aramco declined to comment.
Evercore also declined to comment.
The investment bank has worked on several of Aramco’s strategic initiatives, including its IPO in 2019.
Boston Consulting Group (BCG) also played a role in developing the plans, according to sources, advising Aramco to split off its gas operations in an effort dubbed Project Gamma.
The firm advised the Saudi company to proceed with the move as a way to unlock more value, the sources added.
BCG didn’t immediately respond to requests for comment.
Reuters reported on Sept 22 that Aramco was planning to reorganise its business to create a new gas division with an eye to a potential future listing.
A valuation of the gas business at US$100bil or more would put the unit at about three times as much as Aramco’s listed chemical unit Sabic, which has seen its share price fall by more than 20% over the past year. It’s also more than the nearly US$70bil Aramco agreed to pay in 2020 to acquire Sabic.
Aramco is working to sell assets worth as much as US$35bil to free up funds for state projects and dividend payouts.
The company has been exploring the sale of a piece of its vast real estate portfolio as well as a stake in its oil export and storage terminals.
Growth in Aramco’s gas business is centred around the Jafurah project. — Bloomberg
