The Saudi Arabian oil giant, Aramco, is reportedly examining the possibility of selling certain assets to raise funds, likely aimed at supporting its international expansion efforts.

This strategic move is also intended to mitigate the impact of declining crude oil prices.

In its quest for improved efficiency and cost reduction, Aramco is weighing asset sales as one potential strategy, as reported by Reuters, which cited anonymous sources.

The company has engaged investment bankers to propose methods for generating revenue from its assets, the report indicates.

However, the sources did not disclose specific assets under consideration for sale or the names of the banks involved.

Meanwhile, Aramco has declined to comment on these developments.

Impact of Oil Prices on Aramco

According to the Reuters report, the firm is expected to cut its dividend payouts by nearly one-third this year due to the adverse effects of lower oil prices on its revenue.

As the largest oil production entity globally, Aramco is a pivotal contributor to the Saudi economy, with diverse operations spanning aviation, construction, and sports.

In previous asset sales, Aramco has maintained majority stakes, particularly in deals related to its pipeline infrastructure.

The Saudi government is urging various industries to enhance profitability as it deals with reduced crude prices while investing its oil profits into new sectors to lessen the country's dependence on oil.

The kingdom is grappling with a widening budget deficit, with the International Monetary Fund indicating that Riyadh requires oil prices exceeding $90 per barrel to achieve fiscal balance, whereas recent market prices hover around $60 per barrel.

In recent years, Aramco has actively sought to expand its global presence, making investments in Chinese refineries, Chilean fuel retailer Esmax, and the US-based LNG firm, MidOcean.

Last week, the Saudi company announced it had signed 34 preliminary agreements that could potentially amount to $90 billion with US companies during President Donald Trump's visit to the kingdom.

Saudi Aramco Considers Asset Sales to Enhance Liquidity

Comments