Saudi Aramco is looking to raise as much as $10bn from its first international bond issue, as it looks to finance the purchase of its petrochemicals partner, Saudi Basic Industries Corporation (Sabic), according to Saudi energy minister, Khalid al-Falih.

"It will be probably in the $10bn range but we will decide in the next few weeks," Al-Falih told journalists on the sidelines of an energy event in Abu Dhabi on 13 January.

Al-Falih, a former Aramco CEO, is still chairman of the state-owned energy giant.

Aramco plans to spend about $70bn to acquire a 70 per cent stake in Sabic from the Public Investment Fund (PIF), the kingdom’s sovereign wealth fund. Launching bonds will expose Aramco to a hitherto unknown level of disclosure, with the release of a prospectus to give potential investors a glimpse of its reserves, finances and operations.

The company has so far largely avoided bond markets, relying almost exclusively on its own cash or bank loans. The closest it has come to issue debt is last year when it sold a debut local currency Islamic bond, or sukuk. The prospectus for the 2017 sukuk, which raised about $3bn, didn’t include any financial information on Aramco.

The planned acquisition has taken precedence over Aramco’s own much heralded initial public offering (IPO), which was meant to help fund Saudi Arabia’s ambitious economic reform programme, known as Vision 2030.

Originally planned for 2018, the plan has suffered a number of delays, but Al-Falih has insisted the IPO of up to 5 per cent of Aramco is still targeted for 2021.

Aramco is reported to have appointed JPMorgan Chase & Co. and Morgan Stanley to advise on the Sabic deal. Both were already working on the IPO preparations.

Buying a majority stake in Sabic, which produces petrochemicals and metals, is part of Aramco’s wider ambitious to aggressively expand its downstream footprint, both inside and outside the kingdom. The pair are already working on the joint development of a new 400,000 barrels a day (b/d) crude-to-chemicals facility at Jubail, and Aramco provides much of the feedstock for Sabic’s own petrochemicals plants.

Aramco plans to spend more than $100bn on new refining and chemicals projects over the next decade, to balance its business between upstream and downstream operations.

“Our ultimate target is to reach 8-10 million barrels a day [b/d] of refining capacity and create a better balance between our upstream and downstream segments,” Aramco CEO Amin Nasser said in November.

Aramco has previously said it plans to integrate its refining and petrochemicals assets to process 2 to 3 million b/d of crude into chemicals. This will help it take advantage of a chemicals demand expected to account for a third of total oil demand globally up to 2030.

Between 2030 and 2050, chemicals could even reach 50 per cent of all crude oil demand, outstripping demand from the transport sector. Integrating its upstream and downstream operations will help Aramco absorb any volatility in commodity markets.