Saudi Aramco CEO says oil giant can still meet dividend expectations as crown prince prioritizes investments

The chief govt of the world’s largest oil firm stated Wednesday he believes it is going to still have the ability to meet dividend payout expectations after Saudi Arabia’s authorities introduced plans to prioritize investments.

Crown Prince Mohammed bin Salman on Tuesday stated that state-backed oil giant Saudi Aramco and petrochemical agency SABIC will fund nearly all of a 5 trillion riyal ($1.3 trillion) non-public sector funding plan for financial diversification.

“We are very excited with the government’s announcement yesterday of the Shareek program,” Saudi Aramco CEO Amin Nasser instructed CNBC’s Dan Murphy in an unique interview.

“We support this initiative which is very much aligned with Vision 2030. It promotes GDP growth through new investment and will have a multiplier effect for the Saudi economy.”

The authorities’s 5 trillion riyal non-public sector funding plan is a part of 12 trillion riyals price of investments deliberate by 2030.

The crown prince stated, in line with Reuters, that the federal government had requested the most important collaborating corporations to chop dividends and redirect the money to new investments. For these proudly owning shares in Saudi Aramco, he reaffirmed dividend costs would stay secure.

“We promised them that and we will keep that promise,” the crown prince stated, Reuters reported. The oil giant is 98% owned by the federal government.

When requested how sustainable the corporate’s dividend would show to be within the wake of the federal government’s non-public sector funding plans, Nasser stated it was a “voluntary” program that had taken non-public pursuits into consideration.

“The company has, as I said, a strong balance sheet, it is one of the lowest-cost producers in the world and it is very capable to execute mega projects and giga-projects while continuing also to meet the expectations of its shareholders.”

Shares of Saudi Aramco, listed on the Saudi inventory change, traded greater than 1.8% increased on Wednesday.

Earlier this month, Saudi Aramco reported a 44% drop in full-year 2020 earnings, lacking analyst expectations. The firm took on extra debt final 12 months to take care of its $75 billion greenback dividend payout and introduced a reduce to spending within the 12 months forward.

Nasser described the final 12 months as “one of the most challenging years in recent history,” citing decrease oil costs and weaker refining and chemical substances margins.

The coronavirus pandemic sparked a historic collapse within the value of oil final 12 months, as unprecedented public well being measures to curb the unfold of the illness coincided with restricted mobility worldwide.

For Saudi Arabia’s oil-rich economic system, the worldwide well being disaster and oil market turmoil had been setbacks to Crown Prince Mohammed bin Salman’s plans to diversify away from oil exports and cut back unemployment.