Story
Aramco Reportedly Explores Standalone Gas Unit With Potential $100 Billion Valuation
Summary
Saudi Aramco is reportedly considering a major restructuring to create a standalone natural gas division, which could be valued at over $100 billion and potentially be listed or sold to new investors.
Saudi Aramco is exploring a significant corporate restructuring that could establish its natural gas business as a standalone division, a move that could value the unit at over $100 billion, according to a Bloomberg News report citing people familiar with the matter.
Strategic Review Details
The state-owned energy giant has reportedly hired investment banking advisory firm Evercore Inc. to advise on the potential separation. The initiative, internally dubbed "Project Gamma," was also informed by recommendations from Boston Consulting Group, which suggested the separation could unlock significant value, the report said.
The discussions could pave the way for attracting new investment into the gas unit. Potential outcomes include a future initial public offering (IPO) or the sale of a minority stake. According to the report, these plans are still in early stages and are subject to change.
Aramco's Gas Expansion
AdThe potential restructuring aligns with Aramco's strategic push to significantly expand its natural gas operations. The company has already earmarked more than $100 billion for investment in projects including the massive Jafurah gas field.
Aramco's stated goals include:
- Increasing its gas production by approximately 80% through 2030.
- Generating up to $15 billion in additional annual operating cash flow from the gas business by the same year.
This strategic review is part of a broader effort by Aramco to generate capital. The company is also reportedly exploring asset sales of up to $35 billion to raise funds for Saudi state projects and to support its substantial dividend commitments.
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