Saudi Arabia has given the country’s sovereign wealth fund control of a second 4% stake in the Aramco oil giant, worth tens of billions of dollars, according to official media on Sunday.
Crown Prince Mohammed bin Salman’s drive to exploit the Gulf kingdom’s massive petroleum riches to open up the economy under his “Vision 2030” domestic reform plan is exemplified by this decision.
The shares were transferred to Sanabil Investments, a corporation managed by the kingdom’s Public Investment Fund (PIF), one of the world’s largest sovereign wealth funds with more than $620 billion in assets, according to the official Saudi Press Agency.
Last year, 4% of Aramco shares, valued at $80 billion, were transferred straight to PIF.
Based on the current market capitalization of Aramco, one of the world’s most valuable corporations, the latest shares are worth roughly $80 billion.
The kingdom’s de facto ruler, Prince Mohammed, “indicated that the transfer of part of the state’s shares in Saudi Aramco is a continuation of Saudi Arabia’s long-term initiatives to boost and diversify the national economy and expand investment opportunities,” according to the article.
“The transfer will also solidify PIF’s strong financial position and credit rating,” it added, noting Riyadh still owns 90 percent of Aramco’s shares.
According to its website, Sanabil’s investments “include venture, growth capital, and small buyouts.”
Aramco and its assets were formerly kept under vice-like government supervision, making outside investment impossible.
However, under Prince Mohammed, the monarchy is willing to relinquish some of its sovereignty.
In December 2019, the oil company sold 1.7 percent of its shares on the Saudi market, collecting $29.4 billion in the world’s largest initial public offering.
The company, which recorded $161.1 billion in revenues last year, has vowed to achieve “operational net-zero” carbon emissions by 2050.
