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Aramco Steps Up Investor Push With Plans for $ 75 Billion Yearly Dividend



Saudi Arabian Oil Co. is targeting potential nongovernment investors with plans to pay out a total annual dividend of $ 75 billion as of this year.

The state oil giant, commonly known as Aramco, 2024. Nongovernment shareholders would thus receive preferential treatment, receiving their pro rata share of the $ 75 billion payout even if Aramco's earnings do not cover the government's full share as an investor.

That said, Aramco indicated that it would pay at the discretion of the company's board. The overview does not specify that the dividend to nongovernment shareholders-of which there are currently none-is-contingent to IPO.

Aramco officials say they are working 24/7 to repair their damaged oil facilities. Saudi Arabia invited WSJ's Rory Jones to see the Khurai oil field and Abqaiq processing plans to show Aramco's efforts to get back to full production and international support against Iran. Image: AP
        

The corporate posting Monday coincides with Aramco restoring its oil production to levels that preceded the Sept. 1

4 attacks on its facilities.

In its half-year earnings published in August, the largest profit of any reporting company has been found preparation for an IPO. At the time, it would pay a special dividend of $ 20 billion to the Saudi Kingdom as a shareholder because of the company's strong performance in 2018.

"In the past [Aramco] has been used as much as a cash cow for the government, "said Richard Segal, credit analyst at Manulife Asset Management. [nongovernment] shareholders. "

Fitch Ratings previously estimated that from 2015 to 2017, Aramco accounted for around 70% of Saudi Arabia's revenue.

Saudi Arabia's dependence on Aramco would typically be a potential deterrent to investors in the offering, concerned that Aramco would face a downward pressure on oil prices.

Manulife's Mr. Segal said the prioritization of nongovernment shareholders was standard in Saudi Arabia with majority of state-owned entities. Saudi Electricity Co., which is listed on the Saudi Stock Exchange, has a similar policy.

            Exxon Mobile
             Corp.

      .

            Royal Dutch Shell
            

       PLC,

            BP
            

       PLC and other global energy companies. Grapple with volatile earnings. They make the promise of consistent dividend payouts. For instance, France's

            Total
             SA

       has not cut its dividend since 1982.

The Saudi royal court, Aramco's top executives and the company's advisers are currently planning to float about 1% of the year-end of Saudi Arabia's domestic stock market as part of a plan to 5% or more of the company and so on. The company is aiming for a valuation of up to $ 2 trillion.

Write to Ben Dummett at [email protected] and Sarah McFarlane at [email protected]

Corrections & Amplifications

Aramco has restored its oil production to levels that preceded the Sept. 14 attacks on its facilities. In an earlier version of this article it incorrectly said it restored its oil-production capacity. (Sept. 30, 2019)

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