MOSCOW (MRC) -- Saudi Arabia's Crown Prince Mohammed bin Salman has transferred 4% of Saudi Aramco shares worth USD80 billion to the kingdom’s sovereign wealth fund, reported Reuters with reference to the government's statement on Sunday.
The shares will bolster the Public Investment Fund's (PIF) strong financial position and high credit ratings in the medium term, the crown prince said in a statement. The fund is the prince's vehicle of choice to transform the Saudi economy and diversify away from oil revenues.
The state remains the largest shareholder in Saudi Aramco after the transfer process, as it retains more than 94% of the company's shares, the statement said.
The transfer of existing shares would help to boost PIF's assets under management, which are targeted to grow to about 4 trillion riyals (USD1.07 trillion) by the end of 2025, it added.
"It supports the outlook for the PIF raising funds internationally, including bonds, and could potentially support a future Aramco share sale going forward," Monica Malik, chief economist at Abu Dhabi Commercial Bank, said.
Saudi Aramco said in a statement the transfer was a private transaction between the government and the state fund. "The company is not a party to the transfer and did not enter into any agreements or pay or receive any proceeds from that transfer," it said.
The head of the sovereign wealth fund, Yasir al-Rumayyan, said last year that Saudi Aramco may consider selling more shares if market conditions are right, while the Wall Street Journal recently reported that the kingdom could target a stake sale of as much as USD50 billion
Aramco, the world's biggest oil company, completed the world's largest initial public offering in late 2019, raising USD29.4 billion, with the proceeds transferred to the PIF.
As MRC informed before, in June 2020, Aramco finalized its USD69 billion acquisition of a 70% stake in Saudi Basic Industries Corp., the Middle East's biggest petrochemical maker. SABIC reported more than a fivefold year-on-year increase in its Q3 net profit to USD1.49 billion thanks to higher average sales prices.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.
Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
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