Under pressure to increase payouts to Saudi Arabia, the Kingdom’s state oil giant Aramco is considering selling up to five gas-fired power plants in deals that could raise some $4 billion, sources familiar with the plans told Reuters on Friday.
Aramco has seen profits – and payouts to the Kingdom – decline this year with the slide in oil prices compared to last year’s levels.
Saudi Arabia relies on income from oil exports and Aramco’s dividend payouts to finance an ambitious Vision 2030 program, with which the Saudi Crown Prince, Mohammed bin Salman, wants to turn the Kingdom into an investment-friendly destination of doing business and grand projects to reduce reliance on oil.
Saudi Aramco is reportedly exploring asset sales as a means of increasing the availability of funds to fuel its international expansion and existing operations, according to unnamed sources who spoke to Reuters in May.
Aramco, the world’s single largest crude oil exporter, is considering selling power generation assets, and possibly stakes in pipelines, housing compounds, and port infrastructure assets, Reuters’ sources said on Friday.
Aramco has also been tapping the bond market to raise funds.
At the end of last year, Saudi Aramco’s chief financial officer, Ziad Al-Murshed, said that the oil giant plans to regularly tap the bond market for debt issuance as it looks to optimize capital structure and widen its investor base.
Aramco returned to the debt market in 2024, following three years of absence, with two bond issues in which it sold a combined $9 billion in debt.
This year, the Saudi oil giant successfully completed a $5 billion bond issuance, drawing robust demand from institutional investors.
Saudi Aramco plans to continue tapping the debt markets for more borrowings to fund growth, CEO Amin Nasser told Bloomberg TV at the end of May.
Raising more debt is a means for Aramco to support its huge dividend, most of which goes to the Kingdom of Saudi Arabia, the shareholder of 98% of Aramco.
The Saudi oil firm’s debt has risen in recent months, but it’s still the lowest of any major oil company.
By Charles Kennedy for Oilprice.com
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