Sources say Aramco is considering investing in Equinor's Marcellus shale operations through a joint venture or by buying a stake
Saudi Aramco is weighing a potential investment in Norwegian oil company Equinor’s US shale operations in what could be the energy giant’s first ever overseas venture for gas exploration, according to people familiar with the matter.
The state-run company, known officially as Saudi Arabian Oil Co, is considering investing in Equinor’s Marcellus shale operations through a joint venture or by buying a stake, the people said, asking not to be identified because the talks are private.
Aramco may also invest with other oil companies to gain access to US shale gas, the people said.
No final decisions have been made and the deliberations between Aramco and Equinor are at an early stage, they said. Representatives for Aramco and Equinor declined to comment.
Aramco is expanding its search for gas to help reduce the nation’s reliance on sales of crude. Saudi Arabia also wants to use gas as fuel in the kingdom’s power stations and for the production of petrochemicals, a high-priority industry for the government in its strategy to diversify the economy.
The country is looking for natural gas supplies in the US, Russia’s Arctic and Australia both to supply global markets and meet demand at home, Saudi Energy Minister Khalid Al-Falih said this year.
A partnership with Aramco will give the Norwegian company more firepower to expand in the US, the people said. Equinor has been chasing deals for natural gas-rich acreage to add to its large position in the Appalachian region, Al Cook, the company’s head of strategy, said in an interview in March.
The oil firm is also considering selling all or some of its operations in the Eagle Ford shale in the US, people familiar with the matter in March.
Still, Equinor, which is 67 percent owned by the Norwegian government, would have to overcome political unease with the kingdom’s human rights record. In November, the country said it would halt any new export licenses for sales of defense material to Saudi Arabia after already banning exports of arms and ammunition.
Aramco plans to double its total gas production to 23 billion cubic feet daily in the coming decade, CEO Amin Nasser has said. The company’s trading unit sold its first liquefied natural gas cargo last month in the latest example of Aramco’s effort to expand outside its historical business of pumping and selling crude.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.