PIF investment to boost local energy sector supply chains

Reuters/Ahmed Jadallah

Saudi Arabia’s Public Investment Fund (PIF) has signed an agreement to invest in Alkhorayef Petroleum, a Gulf-based manufacturer of electric submersible pumps and equipment critical to oil and gas production

The deal is part of its effort to improve supply chains in the energy services sector in Saudi Arabia.

The Saudi sovereign wealth fund will acquire a 25 percent stake, PIF said in a statement.

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Alkhorayef Group, the parent company and current shareholder of Alkhorayef Petroleum, will retain the remaining 75 percent stake.

The investment will contribute to expanding Alkhorayef Petroleum’s business, which provides services in the Gulf, Africa and South America. It will further improve supply chains in the energy services sector in Saudi Arabia.

“This investment is expected to enable Alkhorayef Petroleum’s growth strategy in local and international markets and further expand its manufacturing output,” said Muhammad Aldawood, head of industrials and mining sector in Mena investments at PIF.

No financial details were shared and the agreement is subject to regulatory approvals.

The fund last month signed a joint venture agreement with Pirelli of Italy to build a tyre manufacturing facility in the kingdom at an investment of $550 million.

In February, PIF spent $1.3 billion buying “significant” minority stakes in four local construction companies to help the local construction industry expand capacity, improve supply chains, accelerate the adoption of advanced technologies and support the Vision 2030 economic diversification plan.