PetroChina PTR, the Chinese oil and gas producer and distributor, will consider taking part in national oil giant Saudi Aramco's IPO based on market conditions, it said today, becoming the second Chinese oil major to discuss becoming an investor this week, Reuters reports.
On Monday, Sinopec (SHI) said the Aramco president had visited the firm, and both sides would have talks on the IPO, which is expected to be the world's largest equity sale. China's sovereign wealth fund is reportedly also in talks about taking a large piece of the offering when it hits the market.
Wang Dongjin, Petro China's vice-chairman, made the comments about Aramco following his conference call with investors and discussed the firm's 2016 78% earnings decline that while dramatic, met expectations.
"PetroChina will study the opportunity according to market conditions and national interests," Wang said.
The companies are already communicating with each other on other matters, and Wang said the talks include a potential Aramco investment in a mostly-completed refining and chemical plant in Yunan province.
Also on Thursday Aramco added HSBC Bank (HBC) to the list of banks on its international advisory team as it prepares for what could be the biggest initial public offering in history, according to a Reuters report, rounding out a previously announced list that also includes JPMorgan Chase & Co. (JPM) and Morgan Stanley (MS) .
Earlier this year the Saudi firm threw up one surprise in the appointment of boutique investment bank Moelis & Co. LLC as lead adviser on the flotation, giving it a pivotal role in choosing the sale's coordinators and the stock market. Moelis spokeswoman Andrea Hurst declined to comment on the bank's involvement.
On March 16 the two countries signed an investment agreement under which China pledged to spend $65 billion across a range of sectors including energy, ., finance, culture and aerospace, part of Saudi Arabia's drive to develop a growth strategy less dependent on oil.
China gets more oil from Saudi Arabia than anywhere else, and the two nations already operate together in some projects.