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Russian fund builds investors pool for Saudi Aramco IPO

Published 15/02/2018, 10:51
© Reuters. FILE PHOTO: Logo of Saudi Aramco is seen at the 20th Middle East Oil & Gas Show and Conference in Manama
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By Darya Korsunskaya and Polina Nikolskaya

SOCHI, Russia (Reuters) - The Russian Direct Investment Fund (RDIF) has pledged to set up a "significant" pool of investors for the potential $100 billion(71.06 billion pounds) initial public offering (IPO) by Saudi Arabian state oil major Aramco, it said on Thursday.

The sovereign wealth fund's head, Kirill Dmitriev, who has previously said that Russian pension funds were considering participation in the Saudi Aramco IPO, said he expects widespread interest from the Russian financial sector.

"We see a great interest from the Russian banks, from Russian investment banks and other Russian investors," he said on the sidelines of a conference in the Russian Black Sea resort of Sochi.

"That's why we believe that we will be able to set up a significant consortium for these investments."

Dmitriev added that the fund has been working with Chinese investors to facilitate their participation in the IPO, which could become the world's biggest, valuing Saudi Aramco at up to $2 trillion and raising more than $100 billion.

Sources told Reuters last year that Chinese state oil companies were willing to become cornerstone investors in the IPO.

Relations between Russia and Saudi Arabia, the world's two biggest oil producers, have been flourishing against the backdrop of a successful OPEC-led oil production pact.

Dmitriev said that RDIF and its partners from the Middle East, Asia and Japan have bought a "significant" amount of preferred shares in Russian state oil pipeline monopoly Transneft (MM:TRNF_p).

NOVATEK

Earlier on Thursday Russian Energy Minister Alexander Novak said that Russia's largest non-state natural gas producer Novatek (MM:NVTK) and Saudi Aramco have signed a memorandum on cooperation.

Novak and Dmitriev headed a Russian delegation in Saudi Arabia this week.

The minister also said that Novatek and Saudi Aramco have been in discussion over the Arctic LNG-2 project, which aims to start producing liquefied natural gas from 2022-2023, and that an agreement could be signed this year at an economic forum in St Petersburg.

Vedomosti daily reported on Thursday that Saudi Aramco has been in talks with Novatek about a stake in Arctic LNG-2 and possible purchases of gas from the project, citing unnamed sources.

© Reuters. FILE PHOTO: Logo of Saudi Aramco is seen at the 20th Middle East Oil & Gas Show and Conference in Manama

A Novatek spokesman declined to comment.

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