Saudi Arabia in discussions to offload 1% stake in Aramco

Saudi Arabia is reportedly in talks to divest a 1% stake in state-backed oil firm Saudi Aramco over the next two years to a foreign peer.

Saudi Arabia Deputy Prime Minister and Crown Prince Mohammed bin Salman Al Saud was reported by Bloomberg as saying in an interview on Saudi TV: “There are talks now for the acquisition of a 1% stake by a leading global energy company in an important deal that would boost Aramco’s sales in a major country.”

Crown Prince Al Saud said that the potential stake sale in Saudi Aramco in a ‘leading global energy company’ can rake in about $19bn based on the market value of the company.

He added: “I don’t want to give any promises about deals finalising, but there are discussions happening right now about a 1% acquisition by one of the leading energy companies in the world.”

The move to sell a stake in the state-owned petroleum and natural gas company comes as the country seeks to rebound its economy following the Covid-19 pandemic.

Reuters reported Al Saud as saying in a televised interview: “There are talks with other companies for different stakes, and part of Aramco’s shares could be transferred to the (Saudi) Public Investment Fund and a part listed on the Saudi bourse.”

Al Saud has placed Saudi Aramco under the spotlight as a means to help fund the Saudi Vision 2030 that aims to diversify the country’s economy.

In 2019, Saudi Aramco raised $25.6bn in an initial public offering (IPO). More shares were sold at a later stage under a ‘greenshoe option’, bringing the total raised amount to $29.4bn.

These proceeds were later transferred to the Saudi sovereign wealth fund Public Investment Fund (PIF), which supports the country’s vision to diversify away from oil revenue.

Earlier this month, Saudi Aramco agreed to divest a 49% stake in its newly formed crude oil pipeline entity, Aramco Oil Pipelines, to EIG Global Energy Partners-led consortium of investors for approximately $12.4bn.