Reuters. FILE PHOTO: Flames are seen at the production facility of Saudi Aramco’s Shaybah oilfield in the Empty Quarter
By Davide Barbuscia
DUBAI (Reuters) – In order to wean Saudi Arabia off its dependency on crude the kingdom needs higher oil prices.
A multi-trillion dollar spending push designed to diversify the economy’s sources of income will require state companies to cut the dividends they pay the government to boost capital spending, Crown Prince Mohammed bin Salman has said.
It is not clear how much companies like oil group Saudi Aramco (SE:2222) – whose $75 billion dividends last year were vital to support state revenues – would cut their dividends, but any reduction would likely need to be compensated by higher oil prices, analysts say.