Talks underway to sell 1% of Saudi Aramco to foreign firm: prince

[RIYADH] Saudi Arabia is in talks to sell one percent of oil giant Aramco to a foreign energy firm, the kingdom's crown prince said in a television interview broadcast Tuesday.

"There is a discussion on the acquisition of one percent (of Aramco) by one of the world's leading energy companies, and this will be a very important deal to boost Aramco's sales in that country," Crown Prince Mohammed bin Salman said.

The prince did not name the company, but said it was based in a very large country.

Aramco previously sold a sliver of its shares on the Saudi bourse in December 2019, generating US$29.4 billion in the world's biggest initial public offering.

The energy giant could announce another offering of shares to international investors within the next year or two, the prince said.

The announcements underscore how Saudi Arabia is seeking to monetise its energy assets to generate revenue for an ambitious effort to diversify the oil-reliant economy.

Earlier this month, Aramco said it had struck a US$12.4-billion deal to sell a minority stake in a newly formed oil pipeline business to a consortium led by US-based EIG Global Energy Partners.

Aramco is exploring new revenue streams as it faces pressure to maintain hefty dividend payments to the Saudi government, its biggest shareholder, despite posting consecutive falls in profits since it began disclosing earnings in 2019.

Last month, Aramco posted a 44.4 per cent slump in 2020 net profit, piling pressure on government finances as Riyadh pursues its multi-billion dollar projects to diversify the economy.

The company's debt has climbed as Saudi Arabia, the world's biggest crude exporter, was hammered last year by the double whammy of low prices and sharp cuts in production triggered by the coronavirus pandemic.

Long seen as the kingdom's "crown jewel", Aramco and its assets were once tightly under government control and considered off-limits to outside investment.

But with the rise of de facto ruler Prince Mohammed, who is pushing to implement his ambitious "Vision 2030" reform programme, the kingdom has shown readiness to cede some control.

This month, the kingdom marks five years since Vision 2030 was unveiled by the prince.

AFP