Saudi Arabia is in talks to sell a 1% stake in state oil company Saudi Aramco to a leading international energy player, according to reports.

Crown Prince Mohammed bin Salman on Tuesday said: “There are talks now for the acquisition of a 1% stake by a leading global energy company in an important deal that would boost Aramco’s sales in... a major country.”

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Additional stakes in the world’s largest oil company could be divested also within the next two years.

“There are talks with other companies for different stakes, and part of Aramco’s shares could be transferred to the Public Investment Fund [PIF] and a part listed... on the Saudi bourse,” he said in an interview aired on Saudi TV marking the fifth anniversary of Vision 2030.

Interest from Chinese players

Chinese state-owned players Sinopec and PetroChina earlier expressed their interest to acquire equity in Aramco via a direct deal, reported Reuters.

Saudi Aramco’s 2019 initial public offering (IPO) was viewed as the foundation of an economic diversification programme aimed at attracting foreign investment.

Aramco raised $25.6 billion in the IPO and later sold more shares under a green-shoe option, increasing the total to $29.4 billion. Proceeds of that offering were transferred to the PIF, the Crown Prince’s vehicle of choice to transform the Saudi economy

The Crown Prince is increasingly relying on Aramco, the world’s largest oil exporter, to help finance his plan to transform the economy.

Investors spooked

Vision 2030 has faced hurdles in recent years, with investors spooked by the kingdom’s domestic political crackdown, the killing of Saudi critic Jamal Khashoggi in 2018, and the coronavirus pandemic, noted Al Jazeera.

Saudi Arabia’s economy last year contracted the most in more than three decades due to measures to curb the spread of Covid-19.

The kingdom’s budget shortfall is forecast to be 4% of gross domestic product by end-2021, an improvement on last year’s 12% gap.