American investment giant BlackRock is considering a sale of its stake in the leasing rights to Saudi Aramco’s natural-gas pipeline network back to the energy giant, a report by Bloomberg said, based on talks with people familiar with the matter.
The New York City-based company, which has over US$11.5 trillion in assets under management, is in talks with Aramco about a potential deal, the unnamed sources said, adding that BlackRock might consider a sale to other buyers if an agreement with the Saudi oil company is not reached.
If the deal comes through, it would demonstrate Aramco’s confidence in the growing value of the business and its importance to the country’s energy infrastructure.
Representatives for BlackRock declined to comment on the development.
BlackRock acquired the asset in 2021, when a group led by the firm invested US$15.5 billion to buy 49 per cent of the entity that holds leasing rights over the pipelines. Aramco hailed the deal as a demonstration of its ability to draw global investors.
In another deal that year, Aramco also sold a US$12.4 billion stake related to its oil pipelines. The twin deals are among the company’s largest-ever divestments, and came as the kingdom ramped up efforts to sell assets and fund new industries from artificial intelligence to electric vehicles.
BlackRock was involved in a similar deal last year when Abu Dhabi-based Lunate bought back BlackRock and KKR & Company’s 40 per cent stake in Abu Dhabi National Oil Co.’s oil pipeline network.
Lunate did not disclose how much it paid for the return of the stake to local hands.
In June 2019, ADNOC said it was selling 40 per cent stake in ADNOC Oil Pipelines for US$4 billion. Under the deal, the pipeline company leased ADNOC’s interest in 18 pipelines transporting crude oil and condensates across ADNOC’s upstream concessions for 23 years.
The two US funds became the first foreign investors to acquire infrastructure assets of a Gulf national oil company.
