On Sunday, Saudi Arabia’s crown prince revealed that 4% of the oil giant Saudi Aramco’s shares have been shifted to a subsidiary owned by the kingdom’s wealth fund. This move is seen as a way of increasing Riyadh’s financial reserves as it looks for ways to grow its economy past just oil.
According to Associated Press, the Saudi Press Agency recently announced that Crown Prince Mohammed bin Salman has decided to stake the Saudi Arabian Investment Co. (Sanabil Investments) to the Public Investment Fund’s sovereign wealth fund. Sanabil will be a beneficiary of this move, providing it with additional capital for investments and growth.
Saudi Aramco, which was formerly known as the Saudi Arabian Oil Co., has officially stated that Sanabil will be receiving shares from them. They made it clear that the Saudi Government is still their largest shareholder, with more than 90% of their stock. Aramco is currently valued at an incredible $1.94 trillion, making it the world’s third-largest company behind Apple and Microsoft. This means that 4% of the firm is worth approximately $77.6 billion in theory.
Saudi Arabia has an enviable geographic advantage – massive oil reserves located close to its desert surface, making it cost-effective to produce crude compared to other parts of the world.
The Saudi crown prince has big dreams for his nation’s future and aims to leverage oil wealth to bring about an economic transformation. His initiative of a $500 billion tech-driven city called Neom is a grand undertaking, along with other projects that may steer the kingdom away from oil sales.
