Saudi Arabia announced on Sunday that it will transfer 4% of its stock in state-run oil company Aramco to its state investment fund, a nearly $80 billion influx of cash as it attempts to reform its energy-dependent economy.
The revelation was made by the Saudi Press Agency at a time when the oil company is valued at just under $2 trillion and oil is trading at more than $90 per barrel, its highest level since 2014.
The decision to transfer the shares was taken by Saudi Crown Prince Mohammed bin Salman, the forceful son of King Salman, according to official media. It will go to the Public Investment Fund, the kingdom’s sovereign wealth fund, which has been used by Prince Mohammed to invest in everything from Uber to Newcastle United, a British soccer team.
According to the newspaper, “His Highness said that the transfer of these shares is part of the kingdom’s long-term strategy aimed at assisting the national economy‘s reorganization.” This will entail the creation of private-sector jobs in the kingdom, according to the statement.
Saudi Arabia benefited from a jump in oil prices after the coronavirus outbreak drove prices down to negative territory, but it also sees burning fossil fuels as fueling growing global worry about climate change. The Public Investment Fund has also invested in Lucid Motors Inc., a Newark, California-based electric vehicle manufacturer.
With a 94 percent stake in the corporation, the kingdom remains the largest shareholder. The Saudi Arabian Oil Company has long been the kingdom’s principal economic engine and a major source of revenue for the governing Al Saud royal family.
In 2019, Saudi Arabia offered a small number of shares in the oil company on the Tadawul stock exchange in Riyadh. Aramco’s stock was trading at 37.3 Saudi riyals, or $9.94, before the start of trading on Sunday.
Saudi Aramco has the world’s second-biggest proven crude oil reserves, with about 270 billion barrels (43 billion cubic meters), as well as the world’s greatest daily oil production of any oil-producing company. Since 1965, it has been the single largest contributor to the global carbon emissions of any firm on the planet.
The Master Gas System, operated by Saudi Aramco, is the world’s biggest single hydrocarbon network. It manages about one hundred oil and gas fields in Saudi Arabia, with a total crude oil output of 3.4 billion barrels (540 million cubic meters) in 2013.
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