RIYADH —
Saudi Arabia has moved 4 percent of Aramco
shares worth $80 billion in the world’s biggest oil exporter to the kingdom’s
sovereign wealth fund, authorities said on Sunday.
اضافة اعلان
Crown Prince
Mohammed bin Salman announced the move as part of efforts to recalibrate the
oil-dominated economy.
The transfer is
also the latest sign that Saudi Arabia wants to open up the oil giant and
“crown jewel” of the Saudi economy, the
Arab world’s largest.
The “transfer of 4
percent of
Aramco shares to the Public Investment Fund (PIF) ... is part of the
kingdom’s long-term strategy to support the restructuring of its economy,” the
crown prince was quoted as saying by the official Saudi Press Agency.
Crown Prince
Mohammed said he wants the investment fund to have $1 trillion in assets by the
end of 2025. The fund, the centerpiece of official moves to end economic
reliance on oil, has less than half that amount before this deal.
“The shares will
bolster the fund’s strong financial position and high credit ratings in the medium
term, as the PIF relies on the value of its assets and the returns on its
assets under management for its funding strategy,” he said.
The crown prince
stressed that the Saudi state would remain the dominant Aramco shareholder with
a 94 percent stake. Crown Prince Mohammed is also head of the PIF sovereign
fund.
Aramco shares
finished down by 0.6 percent in trading Sunday after the announcement. But
experts said the share switch would strengthen the sovereign fund.
Mazen Al-Sudairi, head of Research at Al Rajhi
Capital, said it would “give the fund flexibility” if it wants to launch shares
on the local or international market.
Ibrahim
Al-Ghitani, head of energy studies at the Future for Advanced Research and
Studies think tank, predicted that it would a “preparatory step” toward an
international sale of shares.
‘Financial reform process’
The crown prince said in April last year that Aramco was in talks to sell
a one percent stake to a foreign energy giant.
“There is a
discussion on the acquisition of one percent (of Aramco) by one of the world’s
leading energy companies, and this will be a very important deal to boost
Aramco’s sales in that country,” the crown prince said at the time.
Aramco previously
sold 1.7 percent of its shares on the Saudi bourse in December 2019, generating
$29.4 billion in the world’s biggest initial public offering.
It raised $6
billion in Islamic bonds in June last year, so that it could pay dividends to
the new shareholders.
But Aramco
announced $30.4 billion in profits for the third quarter of 2021, a massive
rise from $18.8 billion for the same quarter the previous year, as oil prices
took off again.
In December,
Aramco said it had signed a $15.5 billion lease agreement for its gas pipeline
network with a consortium led by BlackRock Real Estate of the
US and Hassana
Investment Company, a Saudi-state-backed investment management firm.
Aramco and its
assets were once kept under a vice-like government control, long off-limits to
outside investment.
But with the rise
of Crown Prince Mohammed, who has been pushing his “Vision 2030” reform program
since 2016, the kingdom has shown readiness to cede some control.
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