Saudi Arabia’s sovereign wealth fund (PIF) has increased its stake in state-owned oil company Aramco to 8%, doubling its previous holding, the official SPA news agency reported. Saudi Arabia’s Crown Prince Mohammed bin Salman announced that 4% of Saudi Aramco’s state-owned shares would be transferred to the Saudi Arabian Investment Company (Sanabil Investments), which is wholly owned by the Saudi sovereign wealth fund PIF. Following this transfer, the Saudi state will remain the oil company’s largest shareholder with a 90.18% stake.
The transaction, the amount of which has not been specified, is intended to support long-term initiatives to stimulate and diversify the Saudi economy and strengthen PIF’s financial position and credit rating. Saudi Arabia relies heavily on its oil wealth to finance the diversification of its economy. The crown prince is pursuing an extensive reform program to reduce dependence on oil, of which Saudi Arabia is the world’s leading exporter.
The PIF has made investments in international companies such as Uber and Disney as well as in projects such as Neom, a $500 billion futuristic megacity being built in the Saudi desert. The sovereign wealth fund plans to increase its assets under management to $1 trillion by the end of 2025. Aramco, a company that had been entirely state-owned, went public in Riyadh in December 2019.
In March, Aramco announced record profits of $161.1 billion in 2022, a 46% increase in one year thanks to higher oil prices. The company has committed to achieving carbon neutrality by 2060 without abandoning investment in fossil fuels.