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Saudi Aramco to Issue First Global Bond This Year

Saudi Aramco plans to tap the debt market in the second quarter to finance the acquisition of petrochemical giant Sabic, likely issuing its first ever international bond and disclosing its accounts in the process.

According to Bloomberg, Saudi Arabian Energy Minister Khalid Al-Falih revealed the plan on Wednesday in Riyadh, adding the company wanted flexibility in funding the Sabic deal, which could cost about $70 billion.

The Aramco bond is “probably going to be in U.S. dollars,” Al-Falih said.

That debt sale would force the world’s largest oil producer to disclose its accounts to investors for the first time since its nationalization roughly four decades ago, Bloomberg adds in the report.

It would also have to make public details about oil reserves and operations. The kingdom took a first step in that direction on Wednesday by releasing the first audit of Aramco’s oil and gas reserves since 1980.

The funding program “will be sustained over time as Saudi Aramco grows and undertakes its capital program,” Al-Falih said. “We believe that having bonds and commercial paper as one of its sources of capital is prudent and necessary.”

The plans for the bond, first reported by Bloomberg News last year, come as the Saudi government reactivates its plan to sell shares in the company. Al-Falih reiterated Crown Prince Mohammed bin Salman’s comments in 2018 that Riyadh is aiming for Aramco’s initial public offering in 2021. The kingdom had initially targeted 2018.

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