Aramco Eyes Multi-Billion Dollar Asset Sale

Arabian Post

05-07-2025

Saudi energy giant Aramco is preparing to divest up to five gas-fired power plants as part of a broader strategic shift aimed at unlocking billions of dollars to bolster state revenues and maintain fiscal discipline amid softening global oil prices.
The proposed sale, focused on gas-based plants supporting key refinery operations, is expected to yield approximately $4 billion, according to individuals familiar with the internal deliberations. These facilities play a critical role in Aramco's downstream network, supplying electricity and steam to refining complexes across the Kingdom.
The move reflects a renewed push by the government to drive asset monetisation through its flagship energy enterprise, which remains the world's most valuable oil firm by profitability. This latest disposal initiative underscores efforts to diversify revenue streams, improve operational efficiency and maintain dividend flows to the state, despite tighter margins from subdued crude benchmarks.
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Saudi Arabia's sovereign reliance on Aramco remains substantial, with the state owning 81.5% of the company directly. Although the firm reported strong profitability metrics over the past few years, falling global oil prices have placed pressure on its balance sheet. In response, Aramco has announced plans to reduce its base dividend for the current year by nearly one-third. The payout trimming comes despite the company's earlier pledge to deliver sustainable shareholder returns through progressive dividend policy.
The company's dividend obligations include a significant share payable to the government, in addition to royalties and taxes. These distributions remain a primary source of national income. Riyadh has been leaning on Aramco to continue funding major state-led economic programmes, including Vision 2030, which aims to transition the Kingdom's economy away from its overwhelming dependence on hydrocarbons.
Selling power assets is part of a growing pattern of partial divestitures by Aramco, which has increasingly sought to monetise non-core infrastructure. Previous deals include the landmark $12.4 billion pipeline transaction with a global consortium led by EIG in 2021, followed by another multi-billion-dollar oil pipeline sale to a group including BlackRock and Hassana Investment Company. Both transactions highlighted investor appetite for high-yield energy assets linked to long-term supply contracts.
The latest initiative follows that model, though it will likely target a different buyer segment, potentially including regional utility investors and global infrastructure funds. The plants earmarked for sale are considered stable cash generators due to their integration with Aramco's refinery operations and are expected to attract competitive bidding from international investors seeking predictable returns from energy infrastructure.
The shift toward divesting energy-generating assets also aligns with broader energy market dynamics. Gas-fired plants in the Gulf region have been positioned as key transitional assets as the region adapts to climate targets while still ensuring reliable energy delivery to industrial operations. The plants in question are powered by domestically available natural gas, a relatively low-cost and lower-carbon option compared to crude-based combustion.
Aramco's plans are advancing at a time when the company is carefully balancing capital expenditure with shareholder expectations and broader macroeconomic demands from the Saudi treasury. The pressure to maintain fiscal buffers amid fluctuating oil revenues has intensified scrutiny on state-owned entities to deliver higher financial returns and optimise asset portfolios.
While final decisions on the number and timing of sales are yet to be made, internal planning is underway and advisory firms have been engaged to evaluate asset valuations and potential transaction structures. Analysts monitoring the Kingdom's privatisation efforts believe the deal could be structured as a sale-and-leaseback or include long-term offtake agreements that secure energy supply to Aramco's core refining assets while transferring ownership to private operators.