‘Aramco’s role in investment drive guided by business’

A Saudi Aramco tank farm for crude oila nd refined products near the Persian Gulf port of Ras Tanura in Dharhan, Saudi Arabia, January 11, 2018. (Photo: NYTimes)
LONDON — Saudi Aramco will set strict business criteria for ventures it backs under a new private partnership initiative to help diversify the kingdom's oil-reliant economy and was not being pushed into projects by the state, the CEO said.اضافة اعلان

His comments in an interview on Wednesday came a day after Saudi Crown Prince Mohammed Bin Salman announced the new Shareek (Partner) initiative, in which the state-controlled oil giant and petrochemical firm SABIC would lead private sector investments worth 5 trillion riyals ($1.3 trillion) by 2030.

The new program is part of efforts to mobilize private investment in the world's biggest oil exporter, helping the kingdom diversify away from crude sales that still generate more than half the state's income.

"You can look at Shareek as a catalyst in making Saudi Arabia even more compelling as an investment destination for both local and foreign investors," Aramco Chief Executive Amin Nasser told Reuters.

The government has not spelled out how the program will work in detail, but Nasser said private companies would seek incentives from the government — whether infrastructure, fiscal, or regulatory support — and Aramco would determine whether to back a project as a partner.

"This is a voluntary program. It's on the private sector to bring these projects, to ask for incentives," he said.

He promised Aramco's shareholders, who include a minority of private investors since the company began trading on the stock exchange in December 2019, that the firm would set prudent capital allocation and cost criteria.

The new program has raised some investor concerns that Aramco might start building stadiums or launch other infrastructure projects unrelated to its energy business, mirroring its activities in earlier years of Saudi’s oil boom.

But Nasser said the government, which still owns 98 percent of the company since its initial public offering, was not pushing Aramco to take part in specific projects.