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Saudi Arabia in talks to sell Aramco stake to global energy company

(Bloomberg) – The Crown Prince of Saudi Arabia has said the kingdom is in talks to sell a 1% stake in state-owned oil giant Saudi Aramco to a “leading global energy company” as he predicted a rebound in the economy following the coronavirus pandemic. kingdom is looking at the potential sale – which could be worth around $ 19 billion, based on the company’s market value – as a way to lock in customer demand for the country’s crude, Crown Prince Mohammed Bin Salman said. in a rare interview on a Saudi Arabian TV channel Tuesday night. While providing few details on the company involved in the negotiations, he said the sale could take place within the next two years. % acquisition by one of the world’s leading energy companies, ”said Prince Mohammed, the country’s de facto leader. “This agreement could be very important in strengthening sales of Aramco in the country where this company resides.” China is the biggest buyer of Saudi oil. Nearly 30% of the kingdom’s crude exports went to the Asian country last month, according to data compiled by Bloomberg. Japan was the second-largest importer, and the Crown Prince is increasingly relying on Aramco, the world’s largest oil company, to help finance its plan to transform and diversify the Saudi economy – a An initiative called Vision 2030. This effort has encountered obstacles in recent years. , with investors frightened by the kingdom’s domestic political repression and the murder of Saudi critic Jamal Khashoggi in 2018, and then by the Covid-19 pandemic last year. Why Saudi Aramco’s record IPO was not An ordinary deal: QuickTakeAramco’s initial public offering in 2019 – in which it sold around 2% of its shares on the Riyadh Stock Exchange – raised nearly $ 30 billion. The money was transferred to the kingdom’s sovereign wealth fund and was intended to support investments aimed at diverting the largest Arab economy from dependence on oil sales. Since then, Aramco has also taken on debt and has started selling some non-core assets to maintain a $ 75 billion dividend, most of which goes to the state. more than three decades, according to estimates by the International Monetary Fund. But the outlook has improved since then. The budget deficit is expected to be 4% of gross domestic product by the end of this year, less than the 12% gap last year. Speaking on the fifth anniversary of the launch of Vision 2030, Prince Mohammed said the country’s unemployment rate would fall below. 11% this year while the kingdom’s economy is experiencing a “V” recovery. “Unemployment will fall to less than 11% this year, then it will reach around 10%, then 7% in 2030,” he said in the interview. on the Rotana Khalejia television channel. Unemployment among Saudi nationals fell to 12.6% at the end of last year, after peaking at 14.9% in the quarter ending in September. Also referred to the delicate ties with the United States, where President Joe Biden’s administration has said it wants to recalibrate a relationship that was a centerpiece of former President Donald Trump’s Middle East strategy. “Neighboring country” “There will never be a 100% agreement between two countries,” Prince Mohammed said. “Between the different administrations of the White House, the margin of divergence could increase or decrease but we agree with the Biden administration” about 90% of the time, he added. Asked about the kingdom’s regional rival, Iran, the crown prince softened his tone compared to the previous one. “Ultimately, Iran is a neighboring country,” he said, adding that the kingdom wanted Iran to prosper but challenges its nuclear program and its support for “We are working today with our partners region to find solutions to these problems and we hope to overcome them and maintain a good and positive relationship with them, ”he said. also said: Some of the government’s shares in Aramco could be transferred to the sovereign wealth fund, known as PIF The decision to increase the value added tax to 15% last year “will be temporary for one to five years m aximum, with a 5% to 10% VAT target ”Kingdom has no plans to introduce income taxFor more articles like this, please visit us at bloomberg.com you now to stay ahead with the most trusted source of business news. © 2021 Bloomberg LP