Saudi Arabia-based Arab Petroleum Investments Corporation (Apicorp) is in talks with banks about a debut international bond issue this year, sources said on Thursday, which would be the first overseas debt offering from the kingdom in a year.

The offering, which one source said could raise up to $1 billion, would be a quasi-sovereign issue as Apicorp, an energy investment company, is owned by the governments of the Organization of Arab Petroleum Exporting Countries.

They are Saudi Arabia, UAE, Kuwait, Libya, Iraq, Qatar, Algeria, Bahrain, Egypt and Syria.

The company has held talks with local and international banks, two sources said. One said the issue would have a lifespan of five years.

The issue would be likely to draw considerable interest from investors, given the rarity of Saudi credits issuing outside the kingdom.

The last dollar-denominated deal from a Saudi issue was real estate firm Dar Al Arkan, which sold a $400 million five-year sukuk in May 2014.

Saudi firms have increasingly looked to the local debt market in recent years to help diversify their funding sources away from bank loans, with ample liquidity in the domestic market often suppressing borrowing costs to levels well below rates for equivalent dollar-denominated bond sales.

However, some companies need dollars for specific projects, while others are looking to tap into a different investor base or to enhance their reputation in the international community.

Apicorp didn't immediately respond to a request for comments.

The advisors for the bond issue are expected to be finalised as soon as this month, with the end of this year as the target for completing the financing, according to one source aware of the plans.

Apicorp last raised $950 million through a sharia-compliant loan in March, proceeds of which were to be used to finance investments in regional energy projects.

A potential bond will allow the firm to take advantage of the ultra-low borrowing costs in Europe and the United States, and focus on potential acquisitions in the sector.

The halving of global oil prices since July last year has roiled oil companies, forcing many to cut spending and sell assets in order to maintain their balance sheets.-Reuters