Plans to sell a stake in Saudi Arabian Oil Co (Aramco) are “well under way,” the government said on Saturday, as the kingdom redrafts one of its key economic blueprints to eliminate overlap with other reform programs.
The privatization program “continues to gain traction,” the Saudi Ministry of Culture and Information said in a statement.
Officials have said the kingdom plans to sell as much as 5 percent of Aramco next year in what could be the world’s biggest initial public offering (IPO).
“The IPO process is well underway and Saudi Aramco remains focused on ensuring that all IPO-related requirements are completed on time and to the very highest standards,” the ministry said.
The statement comes after an official document seen by Bloomberg News showed that authorities are redrafting the National Transformation Program (NPT), a plan to overhaul the kingdom’s government and economy as it grapples with low oil prices.
The revamp will not change key fiscal or energy-related targets, according to the document, but it is needed to match it with Crown Prince Mohammed bin Salman’s broader Saudi Vision 2030, which includes a separate program for the Aramco IPO.
The NTP’s revision “represents learning and progress, and provides a stronger foundation for the necessary reforms and progress for the country,” the ministry said.
More than half the objectives under the previous version have been assigned to different entities or programs, it said.
The original NTP was designed to overhaul the Saudi bureaucracy, and set targets for each ministry to achieve by 2020.
However, the plan was overshadowed by the prince’s Vision 2030, a blueprint for life after oil that calls for selling shares in Saudi Aramco and creating the world’s largest sovereign wealth fund.
Consultants and civil servants began redrafting the NTP in July, calling the effort “NTP 2.0.” The document outlines a 16-week schedule to develop the program. A final report is due to be delivered to the government by the end of next month.
“It is important to adjust and adapt to unexpected situations, and to use new circumstances in ways that reinforce and strengthen underlying strategic objectives,” the ministry said in its statement. “Such flexibility should not undermine the stability and predictability needed to allow private sector to plan its new investments and expansions.”
The statement cited several “early successes” for the kingdom’s program, such as “a faster than anticipated reduction in the budget deficit, energy price reform” and the introduction of an excise tax on soda and tobacco products.
The government has also allocated 200 billion riyals (US$53.33 billion) “of support to strategic private sector organizations,” including 15 billion riyals to fund industrial projects and 75 billion riyals for a proposed Saudi-China fund, the ministry said.
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