Azernews.Az

By Bloomberg

Saudi Arabian Oil Co., the world’s largest oil exporter, is in talks with banks to raise a $10 billion loan that could be used to fund acquisitions and other investments, according to four people with knowledge of the matter.

Saudi Aramco, as it’s known, is in talks with international and local banks to replace an undrawn $4 billion loan, the people said, asking not to be identified as negotiations are private. Saudi Aramco told banks that it expects to make withdrawals under the new facility, two of the people said.

The rapid decline in oil prices since June last year may encourage a wave of consolidation and acquisitions in the energy sector. Falling crude has ravaged oil company profits and forced major producers and drillers to slash spending.

Saudi Aramco is expanding into refining and petrochemicals and seeking to boost ties with Asia. It bought a $2 billion stake in S-Oil Corp, South Korea’s third-largest oil refiner, last year and is also a potential bidder for the minority stake in the synthetic-rubber unit of German chemical company Lanxess AG, two people with knowledge of the matter said this month.

A spokesman for Saudi Aramco wasn’t immediately available to comment.