China offers to buy 5% direct stake in Saudi Aramco: report

Chinese state-owned oil companies PetroChina and Sinopec have written to Saudi Aramco in recent weeks offering to buy up to 5 percent of Saudi Aramco directly, Reuters reported citing sources familiar with the matter.

The two companies are part of a state-run consortium that includes China’s sovereign wealth fund.

This move could give Saudi Arabia the flexibility to consider various options for its planned initial public offering (IPO) of up to 5 percent of the world’s biggest oil producer in 2018, a source said.

“The Chinese want to secure oil supplies,” one of the industry sources said. “They are willing to take the whole 5 percent, or even more, alone.”

The IPO is the centerpiece of an economic reform plan to diversify the Saudi economy beyond oil and boost the Kingdom’s budget amid low oil prices.