Aramco Eyes Gas Spinoff with Potential IPO or Stake Sale

Saudi Aramco is exploring the creation of a standalone gas division, potentially paving the way for a partial IPO or minority stake sale in the unit. The move comes after Bloomberg reported that Aramco hired investment banking firm Evercore to help with the reorganization, known as Project Gamma. This internal project aims to separate the gas operations from the company's massive oil business, making it easier to judge the unit's performance and raise funding.

The creation of a standalone gas division would allow investors and lenders to more easily assess the business's value, potentially reducing its funding costs and increasing its options for raising capital. A $100 billion-plus gas unit would be more attractive to specialized lenders that focus on long-term projects with delayed cash flows.

This reorganization is in line with a pattern seen among Gulf state-owned giants, which often sell small stakes in adjacent businesses to fund expansion while maintaining control over their core operations.