Apollo Global Management and GIP bid for stake in Aramco’s oil pipelines

Apollo Global Management and Global Infrastructure Partners (GIP) are reportedly among companies that have placed a bid for a $10bn stake in Saudi Aramco’s oil pipelines.

Brookfield Asset Management, investment management company BlackRock, China Investment, and Silk Road Fund also made non-binding offers for these assets, Bloomberg reported, citing undisclosed sources.

The report added that pension funds in Abu Dhabi and Saudi Arabia have also separately submitted the initial bids.

Saudi Aramco is considering selling the asset to maintain its $75bn of annual dividend payments, a large part of which goes to the Saudi Government.

According to Bloomberg, this payout has become harder to sustain following the coronavirus pandemic, which led to a fall in crude prices last year.

Although these prices have risen since November last year, the members of the OPEC+ cartel, including Saudi Arabia, have restricted oil production.

The oil company is looking through all the proposals received before deciding the companies that will be invited to make binding offers.

After selecting the companies to make binding offers, bidders may team up later in the process.

Some of the prominent family-owned groups in the country are also planning to partner with other investors.

It is noted that Saudi Aramco is setting up a loan of approximately $7.5bn, which will be offered to investors in the oil pipelines assets.

Last year, the company hired New York-based independent investment bank Moelis & Co to devise a strategy to sell its stakes in some subsidiaries.

About six investors, including Brookfield and GIP, reportedly acquired a $10.1bn stake in the natural gas pipelines of Abu Dhabi National Oil Company (ADNOC) last year.