Aramco plans to privatise assets to strengthen its liquidity

Saudi state-owned giant Aramco plans to privatise assets to increase its liquidity.

This strategy is aimed at mobilising liquidity to provide financing. It is part of a broader plan to strengthen the state and address the current energy situation. It should be noted that the government has an 81.5% stake in Aramco, but it is heavily dependent on payments from the oil giant, from revenues to taxes.

According to Reuters, the sale of the plants will provide refineries with around $4 billion. It is also assumed that the Saudi government is pressuring Aramco to boost its profits and payments to the state. In fact, at the beginning of 2025, the company, considered the most profitable in the world and the main source of state revenue, was looking to sell assets, improve efficiency and reduce non-essential costs.

It remains a highly confidential operation, but it has been stated that other ways of reducing costs include disposing of residential communities and oil pipelines and selling gas plants and port infrastructure. The specific date is also unknown, although sources say that other local companies may be interested in purchasing these assets.

The plan to reduce dividends in the middle of this year also seeks to combat oil price fluctuations caused by contemporary geopolitical tensions and the trade wars initiated by US President Donald Trump.

The company has declined to comment on the possibility of asset sales or on the amount of revenue that could be generated from the proceeds. Similarly, the Saudi government has not responded to requests for comment from Reuters.

Aramco's 2024 financial report revealed that it owns or has interests in eighteen power plants and national infrastructure that supply energy to gas plants and refineries. In addition, other power plants are expected to start operating and the Taqbir gas project is expected to begin operations this year. Similarly, the results for the second quarter of 2025 have not yet been published, but weak oil prices caused net profits to fall by 4.6% in the first quarter of the year.

Free cash flow, which relates to funds remaining after investment and expenditure, fell to 16%, corresponding to $19.2 billion, which is insufficient to pay dividends of $21.36 billion.

The possibility of the sale of assets could coincide with the important national projects of Crown Prince Mohammed bin Salman, which seek to diversify the economy's resources beyond dependence on oil, unpredictable prices and international pressures. Specifically, oil revenues accounted for 62% of state revenues last year.

The Saudi budget also shows a deficit of more than $30 billion in 2024, despite Aramco's extra revenues of $199 billion. On the other hand, the corporation sold $5 billion worth of bonds in May and took out more loans.

Similarly, the company requires funds to offset its financial deficit caused by declining free cash flows due to oil prices, which are creating a situation of insufficiency. All of this has led to an increase in net debt and borrowing over the last three years, although these remain lower than other key global oil companies.

Amin H. Nasser, Aramco's president and CEO, said in an interview with Bloomberg that the debt ratio remains at its lowest level at 5% and announced that the company will continue to enter the bond market in the near future.

Saudi Arabia is investing hundreds of billions of dollars in high-profile projects such as Expo 2030 and the 2034 FIFA World Cup. For its part, Aramco aims to raise funds for infrastructure in various projects that will attract more investment to the energy sector.