A CHINESE consortium is offering to buy up to 5 percent of Saudi Aramco directly, sources said, a move that could give Saudi Arabia the flexibility to consider various options for its plan to float the world’s biggest oil producer on the stock market.

Chinese State-owned oil companies PetroChina and Sinopec have written to Saudi Aramco in recent weeks to express an interest in a direct deal, industry sources said.

The companies are part of a consortium including China’s sovereign wealth fund, the sources said.

Saudi Arabia’s Crown Prince Mohammed bin Salman said last year the country was considering listing about 5 percent of Aramco in 2018 in a deal that could raise US$100 billion, if the company is valued at about US$2 trillion as hoped.

The initial public offering (IPO) of Saudi Aramco is the centerpiece of an economic reform plan to diversify the Saudi economy beyond oil and it would also provide a welcomed boost to the country’s budget which has been hit by low oil prices.

Chinese companies are forming a consortium made up of State-owned oil firms, banks and its sovereign wealth fund to act as a cornerstone investor in the IPO, sources with knowledge of the discussions said.

Sources said that Saudi Aramco was now evaluating a private placement of shares to a Chinese investor as a precursor to an international IPO, which could be delayed beyond 2018.

(SD-Agencies)