Aramco is under pressure to manage its money better as oil prices stay low. Selling some assets could help it stay on track with global projects.
To improve cash flow, Aramco can sell assets. To raise more money, the Saudi oil company Aramco is considering selling off some of its holdings
According to those with knowledge of the situation, the business wants to maintain its goals for international expansion while dealing with the pressure of declining oil prices.
Aramco, which supplies most of Saudi Arabia’s income, plans to cut its dividend payout by around 33% this year.
Looking for Ways to Unlock Cash
To help ease the pressure, Aramco has reached out to investment banks for ideas. They’re being asked to suggest ways the company can raise funds by selling parts of its business. While there’s no word yet on which assets could be sold, insiders say it’s being seriously considered.
In the past, Aramco has sold shares in its infrastructure—like pipelines—but kept control of the assets. The company is also working on cutting costs and becoming more efficient across its wide range of operations, which include everything from oil to aviation and construction.
Oil Prices and Budget Gaps
Saudi Arabia is facing financial pressure. Oil prices have recently been around $60 per barrel, but the country needs prices above $90 to balance its budget, according to the International Monetary Fund.
The gap is making things tough for the government, which is spending big on diversifying the economy and reducing its reliance on oil.
Even with the squeeze, Aramco is still investing abroad. It’s put money into Chinese refineries, a Chilean fuel company called Esmax, and a U.S. natural gas firm named MidOcean.
Just last week, it announced 34 early-stage deals with American companies, potentially worth up to $90 billion.
