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Saudi Oil Giant Aramco Could Issue Long-Term Bond This Year

Saudi state oil giant Aramco may issue a new bond this year to optimize its capital structure, according to its chief financial officer Ziad Al-Murshed.

In the bond issue, Saudi Aramco would be looking at longer bond terms of up to 50 years, the executive said at the Saudi Capital Markets Forum in Riyadh, as carried by Reuters.

The last time the world’s top oil firm tapped the bond markets was in 2021, when Aramco raised $6 billion via its first Islamic bond denominated in U.S. dollars, the so-called sukuk, orders for which exceeded $60 billion.

Regarding a rumored new share, it’s not Aramco’s decision “as to the sale of existing government shares,” Al-Murshed said, adding the he would not comment further.

Last month, reports emerged that Saudi Arabia was working with advisers to revive a new sale of stock in Aramco, which is the world’s largest oil firm in terms of both market capitalization and oil production.

Currently, the Kingdom of Saudi Arabia owns just over 98% of Aramco after selling 1.7% in the initial public offering (IPO) in December 2019. Of the 98% held by the Kingdom, the Saudi government owns 90% of Aramco, while the sovereign wealth fund owns the other 8%.

The Saudis are looking to sell shares in Aramco on the domestic market and look to raise at least $10 billion from the follow-up offering, anonymous sources with knowledge of the plans told Bloomberg at the end of January.

Saudi Aramco made its debut on the Saudi Stock Exchange in December 2019 and raised around $30 billion in the share listing which became the largest in history.

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Since the IPO, Saudi rulers, including Crown Prince Mohammed bin Salman, have said on several occasions there would be more Aramco shale sales on Tadawul in the future.  

By Tsvetana Paraskova for Oilprice.com

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