Saudi Arabia is reportedly gearing up to offload additional shares in its oil colossus, Aramco, according to sources privy to the development. This strategic move aims to enhance the kingdom’s financial reserves and support its broader economic diversification efforts.
Banking powerhouses Citigroup, Goldman Sachs, and HSBC have been named as orchestrators of the potential share sale, which may occur in the latter half of the year. Estimates suggest this transaction could generate approximately $20 billion, per initial reports from Bloomberg.
While the plan is still under refinement and subject to alterations, official comments from the government and Aramco were not immediately available. The nation’s ambitious Vision 2030 blueprint, which emphasizes non-oil industries and private sector growth, necessitates substantial capital, with projections running into the hundreds of billions.
In a display of robust financial performance, Aramco has disbursed close to $10 billion in performance-tied dividends to its shareholders for the last two consecutive quarters of 2023. This is in addition to regular dividends tied to Brent crude prices and a $19.5 billion base dividend paid quarterly.
The historic initial public offering (IPO) of Aramco in late 2019 set records, garnering $25.6 billion and later accumulating a grand total of $29.4 billion through an additional share sale. The kingdom’s Crown Prince Mohammed bin Salman had previously indicated in early 2021 that the sale of more Aramco shares was on the horizon, with the intention of reinforcing the country’s principal sovereign wealth fund.
The Saudi government holds a significant stake in Aramco with 90.19%, complemented by the sovereign Public Investment Fund (PIF) at 4% and its subsidiary Sanabil with another 4%, as reported by LSEG.
Financial circles anticipate Aramco’s full-year financial results for 2023 in March, which should shed light on the company’s capital expenditure plans, especially after recent decisions impacting production capacity.