MEOG: PIF picks up Aramco shares

In this week’s MEOG, we look at the transfer of shares in Saudi Aramco and an output uptick in south-western Iran.

Crown Prince Mohammed bin Salman this week transferred 4% of Aramco’s shares to the Kingdom’s sovereign wealth fund, the Public Investment Fund (PIF).

Following the transfer, the Saudi state holds 94.3% of Aramco, the PIF 4% and the remaining 1.7% was sold during the company’s 2019 initial public offering on the local stock exchange, Tadawul All Share Index (TASI).

Based on the company’s current valuation of around $2 trillion, the shares are estimated to be worth $80bn and will yield the PIF an annual dividend of roughly $3bn until at least 2024.

The Saudi Press Agency quoted the Crown Prince as saying that the share transfer would support the Kingdom’s long-term strategy of restructuring the Saudi economy in line with Vision 2030. He reiterated the aim of increasing the PIF’s assets under management (AUM) to SAR4 trillion ($1.07 trillion) by 2025, with the transfer taking the current level to around $560bn. The PIF’s AUM is expected to reach SAR7.5 trillion ($2 trillion) by the end of the decade.

Iran’s Petroleum Engineering and Development Co. (PEDEC) said this week that production capacity at the South Azadegan oilfield will increase by 15,000 barrels per day by the end of next month.

Speaking to the official Shana energy sector media agency on the sidelines of the Ahvaz Oil Industry Exhibition, PEDEC CEO Abouzar Sharifi said: “By the end of the [current Iranian calendar] year, 15,000 barrels of oil will be added to the production capacity of Azadegan South.” The Iranian year 1401 ends on March 20.

The latest update on the field’s capacity came in June when Reza Dehghan said that it had reached 140,000 bpd with the North Azadegan asset understood to add another 75,000 bpd.

Sharifi added: “During the development activities, the exploitation of the parts that have led to the production is also underway in the first phase of [South Azadegan], and at the same time, studies of the second phase development plan have stated on the field.”