Saudi Arabia moves US$164 billion Aramco stake to wealth fund

Saudi Arabia’s government transferred a further US$164 billion stake in Aramco to the Public Investment Fund (PIF), a move aimed at bolstering cashflow at the state-backed investor that’s been ramping up spending on huge local projects. 

The 8 per cent stake transfer will cut the government’s direct ownership in the world’s largest oil company to 82 per cent, the Saudi Press Agency said. The move will have no impact on Aramco’s dividend, which the oil giant kept at US$29 billion in November despite a drop in production and weaker oil prices. 

The firm is set to report annual results on Sunday. A recent decision to halt production capacity will lower spending, potentially allowing for a higher dividend payout, Bloomberg Intelligence’s Salih Yilmaz said. 

For the PIF, cashflow from the extra shares will help as it ramps up spending on huge projects related to Crown Prince Mohammed Salman’s Vision 2030 plan meant to transform the kingdom’s economy, with investments in everything from tourism to semiconductors and sports.

Thursday’s transfer will boost the fund’s assets to about US$900 billion, taking it closer to a goal of US$1 trillion by next year. The government last moved a stake in Aramco to the PIF in April 2023, when the fund got a 4 per cent shareholding. In all, the fund holds about 16 per cent of the firm. 

Aramco has a free float in Riyadh of roughly 2 per cent. Its shares closed up by 0.2 per cent on Thursday, valuing the company at US$2.05 trillion. 

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Saudi Arabia is considering plans to revive a follow-on offering in the company, Bloomberg reported in January. BLOOMBERG