Market conditions will determine additional sale of Aramco shares, chairman says

Riyadh will consider selling more shares in Saudi Aramco, the world’s largest oil exporter of oil, once market conditions improve.

Aramco chairman Yasir Al Rumayyan told CeraWeek that the company was waiting for different investment institutions and investors to show more interest.

“This is not for [the] Aramco board to decide on; it is the government of Saudi Arabia that will decide.”

CeraWeek, an annual energy industry event organised by IHS Markit, is being held online due to the Covid-19 pandemic.

Saudi Arabia’s Crown Prince Mohammed bin Salman said in January that the state oil company could have a second listing that will boost the kingdom’s Public Investment Fund’s asset base to $1.1 trillion.

Aramco listed its shares on the Saudi stock exchange, the Tadawul, in the world’s biggest initial public offering in 2019.

It raised $25.6 billion and later sold more shares, taking the total to $29.4bn.

In the run up to the listing, Tokyo and Hong Kong were touted as potential venues for a second share sale.

Mr Al Rumayyan, who became chairman of Aramco before its listing, has been at the helm of the PIF since 2015.

The fund is an important part of the kingdom’s Vision 2030 initiative, which seeks to diversify the economy, nurture local industries, create jobs and reduce the country’s reliance on oil revenue.

It is an investor in ride-hailing company Uber and has invested in technology companies through the SoftBank Vision Fund.

In January, the PIF launched a five-year strategy to double its assets to $1.07tn and said it would invest at least $40bn a year in the domestic economy until 2025, helping to create 1.8 million jobs.

The fund, which intends to grow assets under management to more than $2tn by 2030, is expected to contribute $320bn to the kingdom’s nonoil economy.

“Before 2015, we had less than 2 per cent of our investments going internationally. However, from 2015 until 2020, we increased our international allocation to about 30 per cent,” said Mr Al Rumayyan.

The PIF is currently reducing its international allocation to between 21 per cent and 25 per cent, he said.

“We are committed to investing a minimum of $40bn on annual basis in the domestic economy,” Mr Al Rumayyan told CeraWeek.

The money will be used to fund multibillion-dollar projects such as sustainable city Neom and the Red Sea Development project on the kingdom’s west coast.

Mr Al Rumayyan said Saudi Arabia’s diversification efforts over the past five to six years were the tip of an iceberg.

“The things that we would like to achieve in 2030 will be our optimal way of starting the next stage, which is what are we going to do after 2030 to 2040,” he said.

The kingdom – which plans to meet half of its energy needs from clean sources by 2030, with the remainder coming from gas – is “interested in renewables”.

“We are thinking of ourselves as an energy and petrochemical company. So, part of the things that we are doing is to consider renewable investments within Aramco,” he said.

Last year, the company shipped blue hydrogen produced in Saudi Arabia to Japan. Blue hydrogen is formed when natural gas is split using steam-methane reforming.

Aramco shipped the gas in the form of ammonia, which is easier to transport. The blue hydrogen will be used in zero-carbon power generation in Japan, one of the top importers of crude.

The things that we would like to achieve in 2030 will be our optimal way of starting the next stage YASIR AL RUMAYYAN

Aramco chairman