TEHRAN (Iran News) – Saudi Arabia reportedly is planning to cut oil production in June by an extra 1 million barrels per day.
The national oil company Aramco has been directed to cut its crude oil production for June, Reuters reported, citing the country’s energy ministry official, according to Sputnik.
Due to oil price war, waged by Saudi Arabia, inflicting a heavy blow to the US oil companies and section, US President Donald Trump has threatened Saudi Arabia by pulling out its troops from the kingdom.
Besides the June plan, another report said that Saudi Arabia is looking to review its deal to acquire a controlling stake in petrochemicals maker SABIC after a more than 40 percent drop in its value following the oil price crash due to the coronavirus pandemic.
Last year, Aramco agreed to buy a 70 percent stake in SABIC from the Saudi Public Investment Fund for $69.1 billion, in one of the biggest deals ever in the global chemical industry.
The transaction was priced at 123.39 riyals ($32.86) per SABIC share, when it was announced in March 2019. The shares are currently trading at around 70 riyals, as an oil price crash and the coronavirus pandemic has pushed SABIC into a second straight quarterly loss this year.
SABIC’s total market value now is about $56.5 billion, which would make the value of Aramco’s planned stake to be around $40 billion. In theory, Aramco has to pay about $75 billion in dividends to the Saudi government after its initial public offering last year but analysts say that its free cash flow is not expected to cover that amount.
A source with direct knowledge of the matter told Reuters that Aramco’s chairman and head of the Public Investment Fund, Yasir Al-Rumayyan, is leading the talks for Aramco. The purchase price, he confirmed, will be reviewed.
- source : MNA, Irannews
