Saudi Arabia transfers more Aramco oil shares to wealth fund

Saudi Arabia transfers more Aramco oil shares to wealth fund

The transfer of more Saudi Aramco shares reflects the kingdom's push to open up its economy
The transfer of more Saudi Aramco shares reflects the kingdom's push to open up its economy. Photo: Fayez Nureldine / AFP/File
Source: AFP

PAY ATTENTION: Enjoy reading our stories? Join's Telegram channel for more!

Saudi Arabia has put a second four-percent chunk of shares of the Aramco energy giant, worth tens of billions of dollars, under the control of the country's sovereign wealth fund, state media said Sunday.

The move underscores Crown Prince Mohammed bin Salman's campaign to use the Gulf kingdom's vast energy resources to open up the economy under his "Vision 2030" domestic reform agenda.

The official Saudi Press Agency said the shares had been transferred to Sanabil Investments, a firm controlled by the kingdom's Public Investment Fund (PIF), one of the world's biggest sovereign wealth funds with more than $620 billion in assets.

Last year, four percent of Aramco shares, estimated at the time to be worth $80 billion, were transferred directly to PIF.

The latest shares are worth nearly $80 billion, based on the current market capitalisation of Aramco, one of the world's most valuable companies.

Read also

China's economy expected to rebound as zero-Covid era fades

Prince Mohammed, the kingdom's de facto ruler, "indicated that the transfer of part of the state's shares in Saudi Aramco is a continuation of Saudi Arabia's long-term initiatives to boost and diversify the national economy and expand investment opportunities," the report said.

PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ click on “Recommended for you” and enjoy!

"The transfer will also solidify PIF's strong financial position and credit rating," it added, noting Riyadh still owns 90 percent of Aramco's shares.

Sanabil's investments "include venture, growth capital and small buyouts", according to its website.

Aramco and its assets were once kept under vice-like government control, off-limits to outside investment.

But under Prince Mohammed the kingdom has shown readiness to cede some of that control.

The oil giant 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.

Read also

UAE and China promise Pakistan $1.3 bln to get IMF deal on track

The firm, which reported record profits totalling $161.1 billion last year, has pledged to achieve "operational net-zero" carbon emissions by 2050.

That applies to emissions that are produced directly by Aramco's industrial sites, but not the CO2 produced when clients burn Saudi oil in their cars, power plants and furnaces.

Aramco CEO Amin Nasser and other top Saudi officials have simultaneously called for further investment in fossil fuels to ensure global energy security.

The PIF has made high-profile investments in firms including Uber and Disney, and its so-called giga-projects -- centrepieces of Prince Mohammed's reform agenda -- include Neom, a $500 billion futuristic megacity under construction in the Saudi desert.

The crown prince has said he wants the fund to have one trillion dollars in assets by the end of 2025.

New feature: Сheck out news that is picked for YOU ➡️ click on “Recommended for you” and enjoy!

Source: AFP

Online view pixel