Strategic Investment Boosts Saudi Arabia’s Energy Sector

Posted on Dec 01, 2023 at 07:12 AM

Alkhorayef Petroleum, a key player in the oilfield services industry, has entered into a strategic partnership with Saudi Arabia's Public Investment Fund (PIF). This collaboration catalyses growth and innovation within the energy sector, aligning with Saudi Arabia's broader economic goals.

Details of the Investment

The investment by PIF will be executed through a capital increase and a new share subscription, resulting in PIF acquiring a significant 25% stake in Alkhorayef Petroleum. Meanwhile, the majority ownership will remain with Alkhorayef Group, holding a 75% stake.

PIF's Vision and Commitment

PIF's investment is part of its larger initiative to develop the nation's equipment and services landscape. The fund is dedicated to supporting the growth of promising private-sector companies to enhance the industrial ecosystem and increase export revenues. This move is also in line with boosting non-oil revenue streams.

Alkhorayef Petroleum’s Growth Trajectory

Muhammad Aldawood, Head of Industrials and Mining Sector in MENA Investments at PIF, emphasised that this investment will fuel Alkhorayef Petroleum’s local and international expansion. The company, known for its expertise in electric submersible pumps and optimising oil and gas production, is set to increase its manufacturing output and focus on innovative research and development in high-growth areas.

Global Presence and Future Prospects

With operations in 13 countries across the Gulf Cooperation Council, Africa, and Latin America, Alkhorayef Petroleum boasts a diversified revenue base and a strong operational track record. Saad Alkhorayef, Chair of Alkhorayef Petroleum and Alkhorayef Group, expressed confidence in the company's potential to become a leading global oilfield services provider, bolstered by this new investment.

PIF’s Recent Moves and Long-term Goals

In a related development, PIF has recently divested its 10.92 per cent stake in the National Gas and Industrialization Co., fetching SAR 491.19 million ($130.98 million). This move aligns with Saudi Arabia's development roadmap, which aims to raise non-oil revenue to SAR 1.2 trillion ($319.97 billion) by 2025 through privatisation and investments in various sectors. Under Vision 2030, PIF aims to increase its assets significantly, further cementing its role in the nation's economic transformation.

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