The Saudi Crown Prince declares the successful conclusion of the transfer of an 8% stake in ARAMCO to companies fully owned by the Public Investment Fund (PIF)

Saudi Crown Prince

Saudi Crown Prince Muhammad Bin Salman has announced the transfer of 8% of Aramco’s shares to companies under the Public Investment Fund (PIF), reshaping the economic landscape.

ARAMCO, The Saudi Arabian Oil Company

ARAMCO had great significance in the global market. It is the central support system of this global energy landscape. ARAMCO contributes significantly to Saudi Arabia’s economy. ARAMCO beyond the geographical barriers influences the economy globally.

In 2022, a 4% stake worth around $80 billion was transferred to PIF, followed by another 4% valued at approximately $83 billion in 2023. This transfer was completely aimed at boosting the economy. PIF has made high assessments in firms like Uber and Disney.

Delve into PIF

The Crown Prince aims for a $1 trillion asset held by PIF, which would greatly benefit the economy and create global investment opportunities. PIF remains committed to its mission of developing new sectors, forming strategic partnerships, adopting technology and knowledge locally, and creating jobs domestically.

Global Point of Views

The move will further strengthen PIF’s robust financial standing and credit rating, as stated by SPA. PIF raised $7 billion through two debt offerings this year, capitalizing on investor interest. According to Global SWF, PIF’s total debt is around $36 billion, and it’s unlikely to stop borrowing. Justin Alexander, Director of Khalij Economics, noted the move will generate over $9 billion in annual revenue from ARAMCO dividends. This highlights PIF’s crucial role in economic diversification, emphasizing oil revenues’ role in funding investments. While the government may get a smaller dividend share, the goal remains to advance economic transformation.

ARAMCO’s Vision

ARAMCO possesses an inherent spirit of exploration. A relentless pursuit of uncovering new frontiers and solving complex challenges is the core of our determination to succeed. This drive has enabled us to establish one of the world’s foremost energy and chemicals enterprises.

To ensure optimal future performance, ARAMCO’s focus is on delivering increased value, enhancing organizational resilience, fostering ongoing growth, and developing technology solutions that stand the test of time.

Over the next decade, it anticipates making substantial investments in our upstream operations. These strategic investments aim to reinforce the leading position in the oil sector, sustain the maximum production capacity, and support an exploration and production program geared towards discovering and developing both conventional and unconventional gas resources.

In the downstream sector, ARAMCO executing a strategy to expand the non-crude oil businesses and pursue closer integration across our upstream operations.

Conclusion

After the transfer, the State’s complete ownership will amount to 82.186% of the company’s shares. Crown Prince Mohammed has indicated that this transfer of a portion of the State’s shares in Saudi ARAMCO aligns with the Kingdom’s long-term initiatives to enhance and diversify the national economy. It is also in line to expand investment opportunities as outlined in Saudi Vision 2030.

The Crown Prince stressed PIF’s commitment to diversifying sectors, forging strategic partnerships, localizing technologies, and creating employment opportunities. ARAMCO aims to provide reliable energy resources, boosting the economy and fostering opportunities for Saudi Arabia’s youth. ARAMCO is the world’s leading integrated energy and chemicals company, focused on maximizing revenue, promoting sustainable growth in the Kingdom’s economy, and driving competitiveness in Saudi Arabia’s energy sector PIF is also committed to the growth of the Kingdom. This Transfer will boost the economy of the kingdom.

 

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