Aramco’s IPO achieved its goals, says Al-Jadaan

Mohammed Al-Jadaan, Minister of Finance 

Saudi Finance Minister Mohammed Al-Jadaan said that Aramco’s initial public offering (IPO) achieved key strategic goals, adding that the offering helped boost transparency and disclosure, as well as supporting the national economy by leveraging some assets.

In response to a question by Argaam during the government press conference on the possibility of transferring more Aramco shares to the Public Investment Fund (PIF), the minister said there are currently no specific plans to transfer more shares to PIF, but any decisions in this regard will be announced in due course.

He said that the offering enabled the government to transfer about 16% of Aramco shares to PIF or its affiliates, which strengthened its financial capacity, whether through the dividends it receives or by reinforcing its borrowing capacity.

Al-Jadaan said that public finances benefit from three primary sources of oil revenues through Aramco. First, royalties, with the government receiving 15% of Aramco's sales. Second is taxes, as Aramco pays 50% of its net profit to the government on a quarterly basis. Third, dividends are determined by the government's ownership stake in the company.

The minister added that royalties and taxes are not affected by the transfer of share ownership to PIF, while the impact is limited to the percentage of profits only, noting that the government still receives the largest percentage of Aramco's profit, which supports the sustainability of public revenues.

"The government still receives 83-84% of Aramco's total profit, which enhances the sustainability of public revenues,” he stated.

Al-Jadaan also noted that spending in the budget is stable, backed by non-oil revenues.