June 25 (Bloomberg) -- Saudi Arabian Oil Co., the world's largest crude exporter, is forming a venture capital company to invest in international startups developing new drilling technologies, a person with knowledge of the plan said.
Saudi Aramco, as the state-owned producer is known, wants to adopt the latest techniques and expertise for boosting output at older oil fields and fracturing rocks in underground reservoirs to speed the extraction of crude, the person said, declining to be identified because the project is confidential. The investment company will start operating soon, the person said, without specifying a date or indicating how much money it would have to invest.
Aramco's media relations office in Dhahran, Saudi Arabia, declined to comment on the matter today in an e-mailed response to questions from Bloomberg.
The acquisition of new drilling and production technologies is increasingly important for Aramco as the company seeks to boost recovery from existing fields and exploit hard-to-reach unconventional oil and natural-gas resources, Senior Vice President for Upstream Operations Amin Nasser said at a conference in the eastern city of Khobar on April 8. Aramco plans to open five research centers in North America, Europe and China as part of its strategy of becoming a technology producer and innovator, Nasser said at the time.
The new company, seeking to invest in fledgling energy firms outside the kingdom, will be based in the city of Dhahran, where Aramco also has its headquarters, and operate branches in Houston, Boston and Aberdeen, Scotland. As well as drilling technology, it will focus on companies developing solar power and other renewable energy sources, said the person with knowledge of the plan.
Aramco started a venture capital firm for domestic investments in December, targeting small and medium-sized Saudi businesses. This Saudi Aramco Entrepreneurship Center Co., known as Wa'ed, has investment capital of 750 million Saudi riyals ($200 million), according to Aramco's website.
Wa'ed and Sadara Chemical Co., a joint venture between Aramco and Dow Chemical Co., agreed to support and invest in facilities at the Plaschem Park chemicals and plastics complex in the city of Jubail, Aramco said today in an e-mailed statement.