Aramco is not just an Oil Company

Abdullah Al Alami*

March 11, 2024

The transfer of 8 percent of Saudi Aramco shares last week from state ownership to companies’ portfolios wholly owned by the Public Investment Fund is not just a random issue. The state remains the largest shareholder in Aramco, as it owns 82.186% of the shares, and the Fund’s share in the giant company becomes 16%, while the company maintains the credibility of its operations. This is not the first time this transaction was performed, in April last year, 4 percent of Aramco shares were transferred from state ownership to a company affiliated with the PIF, and in February, 4 percent of Aramco shares were also transferred to the Fund.

Furthermore, the PIF contributed to the establishment of 93 companies and the creation of more than 644 thousand jobs in several sectors. The process of transferring shares contributes to increasing the fund's assets and returns, which enhances its position and its credit rating. Thus, Saudi Arabia continues to support its national economy, diversify its resources, and provide more investment opportunities, in line with the goals of the Saudi Vision.

One of Aramco's recent achievements is adding large quantities to gas reserves in the Jafurah field. We are talking about 15 trillion cubic feet of gas, and two billion barrels of condensate, in conjunction with applying the highest international standards in estimating hydrocarbon resources. Saudi Arabia is working smart in developing its reserves, which require modern extraction methods, while at the same time, the country is extending its voluntary reduction in oil production of one million barrels per day.

Moreover, the world witnessed the launch of three new successful projects in the Kingdom: (1) Reducing the cost of solar energy to unprecedented levels, making it one of the cheapest forms of energy available globally, (2) Aramco acquiring a 100% stake in the Chilean fuel trading company (ESMAX), and (3) contributing approximately 15% of the Global blue hydrogen production.

Saudi Arabia also focuses on generating jobs and increasing investments. The assets of Saudi banks have exceeded 4 trillion riyals for the first time, and more than 3 trillion dollars of investments have been pumped locally. As for the Saudi digital economy, it grew from $111 billion in 2021 to $123 billion in 2023. All these developments came in conjunction with the Kingdom’s continued raising the competitiveness of advanced companies, employing qualified citizens, and creating and enhancing the non-oil sectors’ income.

Despite the difficult worldwide circumstances due to geopolitical fluctuations, inflation, and high-interest rates, Riyadh is likely to continue launching new projects, building strategic partnerships, localizing knowledge and expertise, and focusing on investing in energy, technology, and infrastructure. In short, the Kingdom's economy continues to grow by 4 percent this year, according to the International Monetary Fund estimates.

My last words... Saudi Aramco's history and achievements records are not just a passing journey but rather reflect major positive developments throughout the entire country.

Yesterday, Sunday 10 March, Aramco announced its positive full-year 2023 results.

 

*Saudi Economist