Aramco demands $1bn loan days after Houthis’ attack

Saudi Aramco plans to borrow more than $1 billion to finance a project, sources revealed to Reuters on Wednesday.

This comes according to well-informed sources not named by Reuters, confirming that “Saudi Aramco is asking banks to submit proposals on a project financing loan worth more than one billion dollars.”

Saudi Aramco has mandated nine banks to take on leading roles in its initial public offering, the sources said.

Aramco’s list of mandated banks included JP Morgan, Goldman Sachs, Bank of America, Credit Suisse, City, Morgan Stanley and HSBC, the news agency added.

Aramco’s locally mandated banks included Samba Financial Group and National Commercial Bank.

The move comes after a significant blow to the company after the targeting of two of its facilities on 14 September, carried out by the Houthi group in Yemen, disrupting oil exports and production.

One of the two well-informed sources about the matter said that the state-owned oil company sent a request for proposals this week.

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The sources said that it was not possible through the proposals request to immediately determine the specific nature of the projects in which the funds would be used.

It was not possible to immediately reach Saudi Aramco for a comment on the matter, the sources added

The request was sent to banks a few days after the attack of 14 September on the company’s two extensive facilities, which initially halved oil production from the world’s top crude exporter by cutting off 5.7 million barrels per day.

Saudi Aramco’s CEO Amin H. Nasser said that the company, which is preparing for an initial public offering, is still in the process of evaluating repairing operations, which are not so significant given the size of the company.

Three well-informed sources about Aramco’s operations told Reuters that Saudi Arabia had recovered its oil production capacity to 11.3 million barrels per day after the attack on the two oil facilities.

Earlier this year, Aramco, the world’s most profitable oil company, raised $ 12 billion from its first international bond issue after receiving purchase orders worth more than $ 100 billion.

“Aramco and Malaysia’s Petronas addressed banks last year to replace an $ 8 billion short-term loan for a joint venture with long-term financing of about the same size,” banking sources said.

Aramco is preparing for the local segment of its initial public offering. However, some investors and well-informed sources about the company’s thinking approach say it is unlikely that the company can go forward in the listing this year after the attacks.

Two sources said that Aramco officials have been meeting bank analysts this week in Dhahran as part of preparations for the initial public offering.

Houthis: If Saudi continues to attack us, we will respond in deadly manner 

Aramco reforms

Reuters also quoted three well-informed sources about Saudi Aramco’s operations as saying that the Kingdom has recovered its oil production capacity to 11.3 million barrels per day, achieving a faster than expected recovery after the recent attacks.

The sources said the crude oil production from Khurais oil field currently reaches about 1.3 million barrels per day and about 4.9 million barrels from the Abqaiq facility. Sources also said on Monday that Abqaiq production had reached nearly three million barrels per day.

Saudi Minister of Energy Prince Abdulaziz bin Salman and Saudi Aramco’s CEO Amin H. Nasser had previously said that production would fully return by the end of September.

Initially, the attacks raised oil prices to 20 per cent, but they quickly decreased after the kingdom pledged to restore production promptly. Crude prices fell more than $ 1 a barrel on Wednesday to around $ 62.

Saudi officials said the Kingdom has managed to bring supplies back to pre-attack levels by withdrawing from its vast oil reserves and offering other levels of crude from different fields.