8% Stake in Aramco Shifted to Saudi Sovereign Wealth Fund by Crown Prince – Sky Bulletin
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In a strategic move, Saudi Arabia’s Crown Prince has reassigned an additional 8% stake in the state-owned oil behemoth, Saudi Aramco, to the nation’s sovereign wealth fund, known as the Public Investment Fund (PIF). The shares are estimated to have a value of approximately $160 billion.
This action by Crown Prince Mohammed bin Salman is in line with efforts to diversify the Saudi economy and reduce its dependency on oil revenue, aligning with the goals of Saudi Vision 2030—the prince’s blueprint for the future.
The official statement revealed that the share transfer reinforces the PIF’s robust fiscal stance and could enhance the fund’s credit ratings.
Following this transaction, the Saudi government will retain 82.186% ownership in Saudi Aramco. The company, officially the Saudi Arabian Oil Co., has publicly acknowledged the share transfer through a formal disclosure.
Describing it as a “private transfer,” Saudi Aramco confirmed that it was not directly involved in the transaction and neither dispensed nor received any funds as part of the transfer process. With a market capitalization of $2 trillion, Saudi Aramco ranks as the fourth most valuable company globally.
On the news, Aramco shares observed a slight uptick on the Riyadh Tadawul stock exchange. In parallel, global oil prices remain buoyant, with Brent crude trading above $82 per barrel.
Earlier in February 2022, 4% of Aramco’s stakes were transferred to the PIF, and in the preceding year, another 4% stake was assigned to the Saudi Arabian Investment Co., also under the umbrella of PIF. A mere 1.73% of Aramco is publicly traded, following its 2019 IPO.
Saudi Aramco has recently disclosed a record-breaking $161 billion profit for 2022, benefiting from the escalation in energy prices due to the ongoing conflict involving Russia and Ukraine.
The forthcoming announcement of Aramco’s 2023 earnings is due on March 11. Saudi Arabia, with its abundant and easily accessible oil reserves, is poised to capitalize on this advantage while also venturing into various economy-diversifying projects, including reality-transforming endeavours like the proposed $500 billion city, Neom.
The recent transfer of shares is illustrative of the PIF’s ongoing mission to inaugurate new economic sectors, forge key strategic alliances, and generate employment opportunities within Saudi Arabia.
The strategic decision by Crown Prince Mohammed bin Salman to reallocate an 8% stake in Saudi Aramco to the PIF is a testament to Saudi Arabia’s commitment to economic reform and diversification. This move not only fortifies the PIF’s financial standing but also aligns with the nation’s overarching goal of Saudi Vision 2030, ultimately paving the way for a future less dependent on oil profits. As Saudi Arabia shifts towards this vision, it continues to leverage its position as a key player in the global oil market to fund its transformative initiatives.
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