Reuters is reporting two unnamed sources familiar with the matter as saying that oil giant Saudi Aramco is considering selling assets to generate funds.
Aramco is the world’s biggest single oil company in the world. It also owns the Valvoline lubricant brand, which supplies industrial products like coolants, slideway oil and grease.
While some stock is publicly traded, it remains mostly state-owned, and is a large source of income for the Kingdom’s government. With oil prices being relatively low at the moment, Aramco has signalled that its dividend payments will drop by a third this year, down from a total of $124 billion last year to about $85 billion this year.
Reuter’s sources said the oil giant has asked investment banks to come up with ideas for how it can use its assets to raise funds. They declined to cite potential assets for sale, or the banks involved in the process.
Amid low prices for crude oil, the Saudi Government is urging industry in the Kingdom to improve its profitability. Two further sources told Reuters that asset sales were one option for the company to cut costs and enhance efficiency. All four sources were not authorised to communicate with the media and were therefore unnamed.
The Kingdom of Saudi Arabia is pursuing an ambitious strategy of using its oil-generated wealth to establish new sectors in its economy, ready for a post-hydrocarbon future. According to the International Monetary Fund, the Saudi Government needs oil prices of over $90 per barrel to fund its commitments.
