Saudi Arabia in talks to sell 1% of Aramco to foreign investor

Saudi Arabia's crown prince said in televised remarks on Tuesday that the kingdom was in discussions to sell 1% of state oil firm Saudi Aramco to a leading global energy company.

Crown Prince Mohammed bin Salman said Aramco, the world's biggest oil company which listed on the Saudi bourse in late 2019, could sell further shares including to international investors within the next year or two.

"There are talks now for the acquisition of a 1% stake by a leading global energy company in an important deal that would boost Aramco's sales in ... a major country," he said, without elaborating.

"There are talks with other companies for different stakes, and part of Aramco's shares could be transferred to the (Saudi) Public Investment Fund and a part listed ... on the Saudi bourse," he said in an interview aired by Saudi TV marking the fifth anniversary of Vision 2030.

The Aramco initial public offering in 2019 was seen as a pillar of the economic diversification programme aimed at attracting foreign investment.

Aramco raised $25.6 billion in the IPO and later sold more shares under a "greenshoe option" to raise the total to $29.4 billion.

The proceeds of that offer were transferred to the Public Investment Fund (PIF), Prince Mohammed’s vehicle of choice to transform the Saudi economy and diversify away from oil revenue.

Prince Mohammed bin Salman also said that the kingdom had no plans to introduce income tax and a decision last July to triple value-added tax to 15% was temporary.

The kingdom had tripled VAT to offset the impact of lower oil revenue on state finances in a move that had shocked citizens and businesses expecting more support from the government during the coronavirus pandemic.

"Raising VAT was a painful measure and I hate to hurt any Saudi citizen, but it is my duty to build Saudis a long-term sustainable future," the prince said in an interview aired on Saudi TV to mark the fifth anniversary of Vision 2030.

"Raising VAT to 15% is a temporary decision that will last one to five years and then it will go down to between 5% to 10%," he said.

Prince Mohammed also said the kingdom aims to reduce unemployment to 11% this year. Unemployment among Saudi citizens fell to 12.6% in the fourth quarter of 2020 from 14.9% in the third quarter.

The government has been pushing through economic reforms since 2016 to create millions of jobs and reduce unemployment to 7% by 2030.

The plans were disrupted by the coronavirus crisis that sent oil prices plummeting last year.