Saudi Crown Prince Mohammed bin Salman has transferred a 4% stake in oil giant Aramco to Sanabil Investment, which is wholly-owned by the country’s sovereign wealth fund, the Public Investment Fund (PIF).
The move is part of the Crown Prince’s ‘Vision 2030’ domestic reform plan to open up and expand the country’s economy beyond oil.
“The transfer will also solidify PIF’s strong financial position and credit rating,” Sanabil Investment said in its press statement. “His Royal Highness pointed out that the State will remain Saudi Aramco’s largest shareholder following the transfer, with total ownership of (90.18%) of the company’s shares.”
Another 4% of Aramco had been transferred to the PIF in February 2022.
The transfer of new shares will help the Saudi sovereign fund achieve its goals of increasing the amount of assets under management to around SR4trn ($1.06trn) by the end of 2025.
Aramco in a stock market filing said: “This is a private transfer between the state and Sanabil, and the company is not a party to the transfer and did not enter into any agreements or pay or receive any proceeds from the transfer.”
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Aramco is the third most valuable company in the world, behind only Apple and Microsoft, with a market value of $1.94trn.
The Saudi oil giant reported a net profit of $161.1bn for 2022, a surge of 46% compared with $110bn in the same period a year ago, benefitting from higher crude oil prices.
The company attributed the surge in profit to increased volumes sold and improved refined products’ margins.
The Saudi oil giant’s cash flow from operating activities increased to $186.2bn during the year, from $139.4bn in 2021.
Last month, Aramco and its Chinese joint venture partners NORINCO Group and Panjin Xincheng Industrial Group signed an agreement to build an oil refinery and petrochemical plant in north-east China.
Estimated to cost $12.2bn, the project will comprise a 300,000bpd oil refinery and a petrochemical plant.