Is Aramco’s second initial release on the way? Oil contributions to the Saudi economy

According to Tejarat News, Saudi Arabia has transferred $ 80 billion worth of shares from Aramco to its fund. Aramco is the world’s largest oil company. Saudi Arabia plans to add $ 1 trillion to its assets over the next four years, and the transfer of shares from Aramco is part of that plan.

According to Mohammed bin Salman, the transfer of 4% of the company’s shares to the Saudi Public Capital Fund could also help rebuild the Saudi economy. The Saudi government is still the largest shareholder in the company with more than 94% stake.

This is the second public offering of Aramco that Saudi Arabia has previously talked about. Its first public offering was in 2019, when two percent of its $ 30 billion stock was sold on the Riyadh Stock Exchange.

Oil Independence Program

The proceeds of this initial public offering were transferred to the Government Investment Fund. The proceeds are to be used to support investment to free the largest Arab community from dependence on oil sales.

The increase in oil prices following the Corona pandemic caused the price of Aramco shares to increase from 27.8 Rials in March 2020 to 3.37 Rials. Thanks to this price increase, the market value of this company is now two trillion dollars.

Quoted from Bloomberg, Mohammad bin Salman plans to transform the Saudi economy by 2030 and end its dependence on oil. Aramco, as the giant of the world oil industry, can be a significant help for this program.

In an interview last year, Mohammad bin Salman said he might transfer shares to the country’s treasury, but did not say when or how much. The King of Saudi Arabia also plans to increase the fund’s assets to $ 1.1 trillion by 2025, while investing $ 40 billion a year in the Saudi economy. The fund is a key lever to restore the country’s post-corundum economic growth and lower oil prices.

Since 2015, the Saudi Public Investment Fund has increased its assets from $ 150 billion to $ 500 billion.