(Bloomberg) -- Saudi Aramco is in talks with banks to refinance $2.2 billion of debt held by its joint venture with Total SA, according to people familiar with the matter.
The state-owned oil producer is seeking to cut the borrowing cost on the loans that were used to build the Satorp refinery, the people said, asking not to be identified because the discussions are private. The facility converts fossil fuels into building blocks for plastics.
The debt is held by international and local lenders in dollars and Saudi riyals, the people said. Sumitomo Mitsui Banking Corp. and Riyad Bank are advising on the talks, they said.
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Saudi Arabia is seeking to transform its oil-dependent economy by developing new industries, and is pushing into petrochemicals as a way to earn more from its energy deposits. Aramco and Total plan to expand the Satorp refinery with a new complex, which will be able to produce 2.7 million tons of chemicals annually once it comes online in about four years.
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Aramco, as Saudi Arabian Oil Co. is known, owns 62.5% of Satorp, while Total holds the rest. Aramco is also working with Total on a plan to develop a local retail fuel distribution company.
A spokesman for Aramco declined to comment. A spokesman for Satorp, as Saudi Aramco & Total Refining & Petrochemical Co. is known, wasn't available to comment. Riyad Bank and SMBC didn't respond to requests to comment.
--With assistance from Anthony DiPaola.
To contact the reporters on this story: Matthew Martin in Dubai at mmartin128@bloomberg.net;Archana Narayanan in Dubai at anarayanan16@bloomberg.net
To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Shaji Mathew
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