Saudi Arabia Transfers Nearly $78 Billion of Aramco Shares to Wealth Fund
Saudi Arabia has placed a second tranche of four percent of shares in energy giant Aramco, worth tens of billions of dollars, under the control of the country’s sovereign wealth fund, state media said on 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 as part of his “Vision 2030” domestic reform program. Saudi Arabia’s official news agency said the shares had been transferred to Sanabil Investments, a company controlled by the kingdom’s Public Investment Fund (PIF), one of the world’s largest sovereign wealth funds with more than 620 billion. dollars of assets. Last year, 4% of Aramco shares, estimated at the time at $80 billion, were transferred directly to PIF.
The latest shares are worth nearly $80 billion, based on the current market capitalization of Aramco, one of the world’s most valuable companies. Prince Mohammed, the de facto ruler of the kingdom, “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 stimulate and diversify the national economy and expand investment opportunities,” the report said. “The transfer will also strengthen PIF’s strong financial position and credit rating,” he added, noting that Riyadh still owns 90% of Aramco’s shares. Sanabil’s investments “include venture capital, growth capital and small buyouts,” according to its website.
Aramco and its assets were once kept under the control of a vice-government, barred from outside investment. But under Prince Mohammed, the kingdom has shown a willingness to cede some of that control. The oil giant 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. The company, which posted record profits of $161.1 billion last year, has pledged to achieve “net zero” carbon emissions by 2050.
This applies to emissions produced directly by Aramco’s industrial sites, but not to the CO2 produced when customers burn Saudi oil in their cars, power plants and furnaces. Aramco CEO Amin Nasser and other senior Saudi officials simultaneously called for new fossil fuel investments to ensure global energy security. The PIF has made prominent investments in companies such as Uber and Disney, and its so-called giga-projects – centerpieces of Prince Mohammed’s reform agenda – include Neom, a futuristic $500 billion megacity under construction in the Saudi desert.
The crown prince said he wants the fund to have $1 trillion in assets by the end of 2025.
https://oltnews.com/saudi-arabia-transfers-more-aramco-oil-shares-to-wealth-fund-al-monitor