Asset sales could allow Saudi Aramco to maintain its capital expenditure plans and keep its government shareholders happy with dividends, analysts have said.
The national oil company is reportedly looking for investors to buy stakes in its subsidiaries and infrastructure, with a particular focus on its $100 billion Jafurah gas field project, according to a Reuters article that does not name its sources.
Aramco has “a lot of big ambitions”, says Robin Mills, CEO of consultancy Qamar Energy and an AGBI columnist, “and they’re under pressure to keep up dividend payouts” – perhaps more than other oil majors.
Analysts including Mills have told AGBI they expect US investors to be at the front of the queue for any asset sale.
Saudi Aramco did not immediately respond to AGBI’s request for comment on the Reuters report.
The Saudi government relies on crude for about 60 percent of its revenue. Riyadh plans to spend up to $1 trillion on projects and infrastructure linked to its Vision 2030 strategy. As oil prices have declined, concerns have grown around how Saudi Arabia will fund its plans.
Brent crude is trading at four-year lows and averaging about $65 since early April. Prices could decline further next year, according to market observers including Goldman Sachs.
The prospect of a decline in revenue threatens Aramco’s own spending commitments. These include investing in its natural gas operations and increasing its overseas investments as well as bankrolling the Saudi government.
Aramco is already expected to sell more debt this year, leveraging its relatively low gearing ratio.
In the first quarter of this year, Aramco reported a debt-to-equity rate of 5.3 percent, its highest in almost three years.
However, this is low compared with other oil majors. TotalEnergies of France recorded 14.3 percent in the same period, while the embattled British energy company BP reported 25.7 percent.
As of this year, Aramco has essentially cut its performance-linked dividend, which contributed nearly $40 billion to the coffers of the Saudi government and the sovereign Public Investment Fund in 2024.
It is still projected to pay out $85 billion through its base dividend this year, however.
“They can keep raising debt, sure,” says Mills, but “if you look at the sustainability in the long term and, if oil prices remain relatively low, how would they fund all their commitments?”
US investors and the Jafurah gas field
As in 2021, when Aramco responded to a pandemic-driven fall in oil prices by selling off a 49 percent stake in its subsidiary Aramco Oil Pipelines Co, the company may look to US investors for support.
US investment company EIG Global Energy Partners led the group that paid $12.4 billion for a stake in Aramco Oil Pipelines.
The Reuters report on asset sales comes less than two weeks after a delegation of high-profile US investors accompanied President Donald Trump to a US-Saudi investment forum during his visit to Riyadh.
“I’m sure it was discussed when all these people were there in Riyadh,” says Kate Dourian, a non-resident fellow at the Arab Gulf States Institute in Washington.
The US shale-oil market, which typically produces hydrocarbons at a relatively high production cost, has been hard hit by the decline in oil and gas prices. This has been compounded by the lack of clarity in US trade relations with the rest of the world since Trump’s tariff announcements in April.
Jafurah could be the largest shale gas field outside North America. Containing an estimated 200 trillion cubic feet of liquid-rich shale gas, the field is due to start producing later this year.
For US shale companies, a stake in the field’s operations is an opportunity to diversify their overseas interests and, for Aramco, to tap US skills.
“You want somebody who brings in skill and experience,” says Mills. “And surely then you look at the Americans.”
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