RIYADH: Saudi Arabia has transferred a second four-percent chunk of shares of energy giant Aramco, worth almost $80 billion, to its sovereign wealth fund, Sanabil Investments.
This move is part of Crown Prince Mohammed bin Salman’s vision to use the country’s vast energy resources to diversify the economy under his “Vision 2030” domestic reform plan.
Last year, four percent of Aramco shares were transferred directly to the Public Investment Fund (PIF), one of the largest sovereign wealth funds in the world, with over $620 billion in assets.
The latest transfer, which is also worth nearly $80 billion based on Aramco’s current market capitalization, will solidify PIF’s financial position and credit rating.
Aramco was once kept under strict government control
Sanabil Investments, which controls the newly transferred Aramco shares, invests in the venture, growth capital, and small buyouts. Aramco and its assets were once kept under strict government control, but under Prince Mohammed’s leadership, the kingdom has shown a willingness to cede some control.
In December 2019, Aramco sold 1.7 percent of its shares on the Saudi bourse, generating $29.4 billion in the largest initial public offering in the world. The firm, which reported record profits totalling $161.1 billion in 2022, has pledged to achieve “operational net-zero” carbon emissions by 2050.
While this pledge applies to emissions directly produced by Aramco’s industrial sites, top Saudi officials, including Aramco CEO Amin Nasser, have called for further investment in fossil fuels to make sure global energy security.
The PIF has also made high-profile investments in companies like Uber and Disney, and its “giga-projects,” such as Neom, a $500 billion futuristic megacity under construction in the Saudi desert, are centrepieces of Prince Mohammed’s reform agenda. He aims to increase the fund’s assets to $1 trillion by the end of 2025.
