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(Bloomberg) — Saudi Arabia-headquartered investment firm The Arab Energy Fund has agreed to provide a $100 million private loan to Chinese oil company United Energy Group Ltd., according to a person familiar with the matter.
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Proceeds of the five-year financing would be used to repay loans, with some of the capital earmarked for oil fields the company operates in Iraq, said the person, who asked not to be identified. The Chinese exploration and production firm would also use the facility to bolster its cash reserves, the person added.
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The Hong Kong-listed company is also seeking about $200 million more for similar uses, which could potentially come from a mix of private credit and limited bank financing, the person said.
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An Arab Energy Fund spokesperson declined to comment. The United Energy Group didn’t respond to a request for comment.
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Building out financial buffers is key to an oil industry grappling with the prospect of a global economic downturn. OPEC+ agreed earlier this month to make a larger than expected oil supply hike in May, deepening the slump in oil prices triggered by President Donald Trump’s tariffs.
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United Energy Group has expanded its presence in the Middle East over the past several years. In February, the firm’s Middle East subsidiary bought Apex International Energy Holdings I, an oil and gas firm in Egypt. The firm operates several oil fields in Egypt and Iraq, with the latter representing a “key asset” to the firm, according to the company’s 2023 annual report.
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—With assistance from Clara Ferreira Marques.
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