Amin Nasser has called for greater recognition of Asia’s role in the energy transition. Credit: Pearl Initiative.

National oil and gas company Saudi Aramco has proposed purchasing a controlling stake in petrochemicals manufacturer Saudi Basic Industries Corp (SABIC), taking as much as the entire 70% stake owned by Saudi Arabia’s Public Investment Fund (PIF), according to Reuters.

The oil and gas company confirmed the reports, saying it was attempting the purchase of a ‘strategic stake’ in SABIC from the national sovereign wealth fund.

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Saudi Aramco will buy 50-70%, from the PIF making it the majority owner. Some of Wall Street’s largest financial institutions are offering loans to oil giant for the acquisition, according to sources who wished to remain anonymous.

A final decision has not yet been made on how much of stake Saudi Aramco will take as discussions are still in the early stages. A company spokesperson declared to Reuters last week that it is engaged in “very early stage discussions” with the PIF to acquire “a strategic interest in SABIC by way of a private transaction”.

SABIC is the world’s fourth-biggest petrochemicals firm and has a current market cap of SAR385.2bn ($103bn). Saudi Aramco has announced it does not plan to buy the remaining 30% shares, which are listed on the local stock exchange.

If completed, Saudi Aramco chief executive Amin Nasser said the acquisition could have implications for the timeframe of the company’s planned IPO, set for later this year.

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The oil and gas giant aims to boost investments in refining and petrochemicals to secure new markets. It sees growth in chemicals as crucial to its downstream strategy to cut the risk of an oil demand slowdown.

The plan is to raise Saudi Aramco’s refining capacity to between eight to ten million barrels per day (bpd), and double its petrochemicals production by 2030. Currently, it is at around five million bpd.

Saudi Aramco is the world’s largest oil producer, pumping around ten million bpd of crude oil.