Zhitong Finance has learned that Saudi Aramco's chief financial officer, Ziad Al-Murshed, said that as the financial market improves, the company may issue bonds this year and hopes to issue longer-term bonds. Al-Murshed said the company could issue bonds with maturities of 15 to 50 years.
"The market is becoming more stable, so you can expect us to be active in the market," Al-Murshed said. "We always prioritize long-term bonds over short-term bonds. Asked if Saudi Aramco would discover bonds in 2024, Al-Murshed said it was "possible."
It is reported that Saudi Aramco issued its first batch of bonds in 2019 and attracted market interest by about 10 times the company's issuance. These initial bonds have maturities ranging from 3 to 30 years. Aramco also issued its first 50-year bond in 2020.
Saudi Aramco's ability to issue bonds with such a long maturity indicates that investors believe that it will continue to engage in the sale of oil and gas for transportation and chemical production until at least 2070.
Over the past few years, the global economy has been hit by persistent inflation and energy costs**, while also dealing with the impact of the Russia-Ukraine conflict and tensions in the Middle East. OPEC+, led by Saudi Arabia, has been spearheading oil production cuts to stop oil reserves from growing and thus further depressing oil prices.
Al-Murshed said the global oil market is adequate. He added that idle oil capacity accounts for about 3% of global demand. Separately, Al-Murshed declined to comment on the possibility of Saudi Aramco.
Aramco will announce its full-year 2023 results in March. Despite lower production and lower oil trading volumes than the previous year, the company has so far maintained its dividend payments to shareholders, including Saudi Arabia**. Al-Murshed said the company will continue to pay dividends within its means and will not need to discover bonds to support the payout. He added that the base dividend would be "sustainable and progressive", meaning the company aims to increase the dividend in the coming years. Saudi Aramco paid a special, performance-based dividend last year, in part due to the company's strong profits in 2022. The company will continue to do so this year.