By Yousef Saba, Clara Denina and Davide Barbuscia

DUBAI/LONDON (Reuters) – Saudi Aramco , the world’s largest oil producer, is in early talks with banks for a loan of about $10 billion to help finance its acquisition of a 70% stake in Saudi Basic Industries Corp (SABIC), according to three banking sources.

Aramco (SE:) agreed last year to buy the controlling stake in SABIC from the kingdom’s wealth fund for $69.1 billion, sealing one of the biggest-ever deals in the global chemical industry.

“The financing would be for the SABIC deal, but the borrower is Aramco,” said one of the sources, adding that the discussions were at an initial stage, with the company sounding out banks.

“Ten billion dollars is where they want to get to, (it’s) not clear if, in this market, they’ll manage to reach that.”

A second source said banks involved in the talks included HSBC (L:) and JPMorgan (N:), as well as lenders in the Gulf.

In response to a Reuters request for comment about whether it was seeking such a loan, Saudi Aramco said: “The company continues to review its financial options as part of its normal course of business, while prudently preserving its pristine balance sheet and its resilience.”

JPMorgan declined to comment, while HSBC did not immediately respond to a request for comment.

A third banker said Aramco was looking to borrow in U.S. dollars because it was cheaper than in Saudi riyals, in terms of interest, and to avoid pressuring Saudi banks’ liquidity.

OIL PRICES CRASH

The SABIC stake acquisition from Saudi Arabia’s Public Investment Fund (PIF) will help Aramco’s downstream expansion plans. The deal came after months of talks between the company and PIF and was one of the reasons for the delay of Aramco’s blockbuster initial public offering late last year.

The loan discussions come at a time when oil-producing nations have been hit by a plunge in demand for crude as a result of the coronavirus outbreak and a slide in oil prices.

OPEC and its allies led by Russia, a group known as OPEC+, have agreed to the largest oil output cut in history that could curb supply by up to 20%. But the agreement has done little to boost oil prices as many economies remain under lockdown due to the novel coronavirus pandemic, curbing demand.

Brent crude () traded at around $30 on Tuesday, still less than half its close at the end of last year and below the $31.48 price before the output cut deal was reached.

Aramco’s shares closed at $31.10 on Tuesday, below the $32 price of its IPO late last year that initially raised $25.6 billion and became the world’s largest.

Saudi Arabia, which owns more than 98% of the oil giant, is likely to sell new international bonds soon, according to sources, as the output cut deal further squeezes revenues hit by the plunge in oil prices.