Saudi state oil pays $100bn dividend as MBS seeks ‘mirror city’ funds
Saudi Arabia’s state-owned oil company has paid out nearly $100bn (£77bn) in dividends as Crown Prince Mohammed bin Salman seeks to fund ambitious plans to build a ‘mirror city’ in the desert.
Saudi Aramco, the world’s largest oil producer, increased payouts by 30pc to $98bn in 2023 despite a 25pc slump in profits to 454.7bn Saudi riyals (£94.29bn).
The company signalled on Sunday that dividends distributed to investors and Saudi Arabia’s government will increase further in 2024. It comes as the Opec+ cartel, which is led by Russia and Saudi Arabia, extended cuts to oil supplies earlier this month as part of efforts to boost prices.
The dividends will provide a boost for Prince Mohammed bin Salman, known as MBS, who faces a widening budget deficit after spending hundreds of billions on outlandish projects to diversify the economy from oil.
Riyadh is forecasting budget deficits every year until 2026, with officials pushing back the timeline of the so-called giga-projects included in its Vision 2030 transformation plan.
Saudi Arabia earlier this week transferred an 8pc stake in Aramco worth $163.6bn to the country’s sovereign wealth fund, increasing the state’s ownership of the oil company.
The Aramco shares provide the main source of revenue for MBS’s diversification efforts.
The ambitious projects include MBS’s plans to build a futuristic mirror-clad skyscraper, called the Mirror Line, that will stretch 75 miles across the desert.
The proposed mega-city, which would be the largest structure in the world, is designed to house five million people and will have its own high-speed railway, sports stadium and vertical gardens where vegetables are harvested by robots.
The science fiction-esque construction project, which is expected to cost around $1 trillion, has no completion date but experts believe it could take as long as 50 years to finish.
The Mirror Line is just one part of MBS’s $500bn development project Neom, a vast urbanisation project designed to boost tourism and attract foreign investment.
Other costly diversification projects include spending billions on sports deals to bring football, cricket and golf to the Kingdom, through its controversial LIV tour.
Saudi Arabia’s professional football clubs spent a record $957m on poaching high-profile football players from international rivals last summer, according to Deloitte.
This included Manchester United’s Cristiano Ronaldo, whose £173m per year deal with Saudi’s Al Nassr made him the highest-paid footballer in history.
Last year, Saudi Arabia also spent £30bn on a fleet of 72 Boeing jets for Riyadh Air, a new airline to rival UAE’s Emirates airlines, Abu Dhabi flag carrier Etihad and Qatar Airways.
Saudi Arabia’s sovereign wealth fund spent more than any other last year after spending $31.5bn on a range of investments, including a deal to buy a 10pc stake in Heathrow.
