Saudi government shifts 4% of Aramco shares to sovereign fund

The government of Saudi Arabia has transferred 4% of its shares in Saudi Aramco to the kingdom's Public Investment Fund (PIF), the company said in a statement Feb. 13 to the local stock exchange.

"Following the transfer, the state remains Saudi Aramco's largest shareholder, retaining more than 94% shareholding," Aramco said.

The PIF -- Saudi's sovereign wealth fund -- is also one of the biggest backers of renewable projects in the kingdom, including the $500 billion Neom development.

"The transfer of stake is a big boost for the diversification plans of Saudi Arabia," Vijay Valecha, chief financial officer at Century Financial told S&P Global Platts.

The fund has the mandate from the Saudi state to put 70% of its assets in renewable projects in the kingdom. Power projects and developments in solar and wind form part of 13 sectors the fund has chosen for development as part of a strategy intended to diversify the economy from oil.

Saudi Aramco and the PIF are closely linked, as Aramco's Chairman Yasir Al Rumayyan also serves as the governor of the fund.

Aramco first listed shares on the Saudi stock exchange, Tadawul, in 2019, raising $25.6 billion. Aramco later sold more shares raising the total to $29.4 billion.

This content has been corrected to clarify government transferred shares.