Aramco of Saudi Arabia initiates the sale of power plant assets, aiming to raise $4 billion.

According to three informed sources, Saudi Arabia's oil giant Aramco is planning to sell four to five gas-fired power plants. This is part of the company's strategy to release potential funds (possibly generating billions of dollars) for strategic positioning. Two of the sources said that the sale of these four to five gas power plants, which provide electricity to refineries, could raise about $4 billion. Currently, the Saudi government is urging Aramco to increase profitability to boost national fiscal revenue. As the world's most profitable company and a major source of Saudi fiscal revenue, Aramco has recently been focusing on asset sales, efficiency improvements, and cost-cutting plans. Reuters previously reported that due to falling oil prices impacting revenue, the company will reduce dividend payments by nearly a third this year. The Saudi government directly owns 81.5% of Aramco's shares and heavily relies on the company's royalties and tax payments. In addition to the gas power plants, the two sources revealed that Aramco may also divest residential areas and pipeline assets. Another source and a third party indicated that port infrastructure assets could also be put up for sale. Aramco declined to comment on potential asset sales and did not immediately respond to inquiries about the potential scale of this fundraising plan. One source suggested that local companies such as Saudi utilities might be potential buyers. According to Aramco's 2024 financial report, the company wholly or partially owns 18 power plants and related infrastructure in Saudi Arabia, providing energy to its gas facilities and refineries. There are also new power plants set to start operations, with the Tanajib Gas Power Plant project expected to commence operations this year. Aramco's asset sale plan comes as Crown Prince Mohammed bin Salman pushes for economic diversification. Under pressure from continuous drops in oil prices, Saudi Arabia is investing billions of dollars in flagship projects including the 2030 World Expo and the 2034 FIFA World Cup. Despite receiving a special dividend of $19.9 billion from Aramco in 2020, oil revenues still accounted for 62% of Saudi's total fiscal revenue last year, and the 2024 national budget showed a deficit of over $30 billion. In May this year, Aramco issued $5 billion in bonds and signaled more financing. Reuters reported in May that the company also plans to raise funds for infrastructure projects by bringing in investors.