Saudi Arabia transfers shares of oil giant Aramco to sovereign wealth fund

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Riyadh (AFP) – Saudi Arabia has transferred 4% of Aramco shares worth $80 billion in the world’s biggest oil exporter to the kingdom’s sovereign wealth fund, authorities said on Sunday.

Crown Prince Mohammed bin Salman, the effective ruler of Saudi Arabia, 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 “transfer of four 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 newspaper. of State SPA. agency.

Crown Prince Mohammed said he wants the investment fund to have $1 trillion in assets by the end of 2025. The fund is the centerpiece of official moves to end addiction oil economy.

“The shares will reinforce the fund’s strong financial position and high credit ratings over 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,” it said. -he declares.

The Crown Prince stressed that the Saudi state would remain Aramco’s dominant shareholder with a 94% stake. Crown Prince Mohammed is also the head of the sovereign wealth fund PIF.

– ‘Financial reform process’ –

He said in April last year that Aramco was in talks to sell a 1% stake to a foreign energy giant.

“There is a discussion about a one percent acquisition (of Aramco) by one of the world’s leading energy companies, and that will be a very important deal to boost Aramco’s sales in this country,” it said. then declared the crown prince.

Aramco previously sold 1.7% of its shares on the Saudi stock exchange in December 2019, raising $29.4 billion in the world’s largest initial public offering.

It raised $6 billion in Islamic bonds in June last year, so it could pay dividends to new shareholders.

But Aramco reported $30.4 billion in profits for the third quarter of 2021, a massive increase from $18.8 billion in the same quarter a year earlier as oil prices picked up.

In December, Aramco announced that it had signed a $15.5 billion lease agreement for its gas pipeline network with a consortium led by BlackRock Real Estate of the United States and Hassana Investment Company, an investment management company backed by the Saudi state.

Aramco and its assets were once held under vice-like government control, long barred from outside investment.

But with the rise of Crown Prince Mohammed, pushing his “Vision 2030” reform agenda, the kingdom has shown itself ready to cede some control.

“The kingdom is continuing its initiatives to continue the process of economic and financial reform it has begun and is putting in place economic transformation plans,” the crown prince said on Sunday.

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