Saudi Arabia Aramcon in talks to sell 1% stake: MBS | Business and Economic News

According to Prince Mohammed bin Salman (MBS), Saudi Arabia’s U.S. Aramco oil company is in talks to sell 1 percent of the world’s largest energy company.

In a press release on Tuesday, Aramco, the world’s largest oil company listed on the Saudi stock exchange in late 2019, said it could sell more shares to international investors in the next year or two.

“There are talks now that a major global energy company will get a 1 per cent stake in a major deal that would boost Aramco’s sales … in a major country,” he said, without elaborating.

“There are talks with other companies for different stakes, and part of Aramco’s shares (Saudi) to the Public Investment Fund (PIF) and part of the listing … could be transferred to the Saudi stock market,” he said in an interview with Saudi TV. This is the fifth anniversary of 2030, an initiative to diversify the country away from the oil economy.

Diversification plan

Aramco’s early 2019 public offering was seen as a pillar of an economic diversification program aimed at attracting foreign investment.

Aramco raised $ 25.6 billion in the IPO and then sold more shares under the so-called “greenshoe option,” for a total increase of $ 29.4 billion.

The proceeds of this offer went to PIF, the vehicle chosen by Prince Mohammed to transform the Saudi economy.

The Crown Prince is increasingly relying on Aramco, the world’s largest oil exporter, to help fund a plan to transform the economy.

The 2030 outlook has been hampered in recent years by domestic repression in the kingdom and the killing of Saudi critic Jamal Khashoggi in 2018 by investors and the COVID-19 pandemic last year.

Last year the kingdom declined the economy the most in more than 30 years, according to International Monetary Fund estimates. But since then the outlook has improved. This year the country’s budget shortfall is projected to be 4% of gross domestic product, narrower than the 12 percent gap last year.

MBS said the decision to raise the value added tax rate to 15% last year will be provisional, lasting five years, with the government’s ultimate goal being between five and 10 per cent.

The kingdom has no plans to introduce income tax, he added.

The Crown Prince has said the nation’s unemployment rate will fall below 11 per cent this year as the kingdom’s economy undergoes a “V-shaped” recovery.

“Unemployment will fall by less than 11% this year, then it will reach around 10 percent, and then by 2030,” Rotana Khalejia said in a television interview.

Unemployment among Saudi nationals fell to 12.6% at the end of last year, after reaching 14.9 per cent in the quarter ended in September.

External relations

MBS also touched on the delicate ties it has with the United States, where the administration of President Joe Biden said it wants to recalibrate the relationship that was the focus of former President Donald Trump’s Middle East strategy.

“There will never be a 100 percent agreement between the two countries,” MBS said. “Between the different White House administrations, the margin for inequality could be increased or decreased, but we agree with the Biden administration” about 90 percent of the time, he added.

Asked about the region’s regional rival, Iran, the prince’s crown softened its tone from previous statements, saying it was working to resolve its differences with neighboring Saudi Arabia.

“In the end, Iran is a neighboring country,” he said, adding that the kingdom wanted Iran to move forward, but took issue with its nuclear program and support from regional militias.

“Today we are working with our partners in the region to find solutions to these problems and we hope to overcome them and have a good and positive relationship with them,” he said.