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Aramco plans to sell stakes in subsidiaries to foster cash flow

The oil major recorded a Q3 slump of 44.6 percent to $11.9 billion

Oil major Aramco plans to sell stakes in its subsidiaries as the Kingdom of Saudi Arabia’s government is looking to fill budget gaps, media reports said. Aramco mulls to sell stakes in its pipelines with the help of the US-based financial services firm Moelis. Furthermore, if the selling process is successful then it could raise $10 billion.

The move comes after at a time when Abu Dhabi is carrying out a similar development to raise billions to bolster itself because of the recession due to low oil price and the pandemic. 

The Kingdom’s budget planning has been tottering amid low oil prices and burden of oil production due to OPECS agreement’s cuts. compared to $21.29 billion in the same quarter last year. 

Aramco’s growth and stability directly affects the revenue of the Kingdom in general as it is a major contributor to the government where 98 percent of the company’s stake is hold by the government itself. 

The company’s stake sell serves as a grim warning to the global oil segment, whose fate depends upon the pandemic and the resulting slump in oil demand. The faith now remains outside both the Kingdom and OPEC+s control.

Earlier, the company had plans to float an international bond as it looked to ramp up its finances due to the low crude oil demand. 

The global oil market has been walloped by the pandemic and is scrambling to get back to pre-pandemic levels.

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