Bloomberg: Saudi Aramco may issue bonds to cover $75 Billion dividend. Get use to it.

[BLA + 1,666]

As part of Aramco IPO they guaranteed a $75 Billion yearly dividend payments for 5 years.  

Edited June 19, 2020 by BLA

[Ward Smith + 6,615]

I like the typo, yearly dived payments. Cause that's what the stock price will do, dive.  😜

[NickW + 2,714]

33 minutes ago, BLA said:

As part of Aramco IPO the guaranteed a $75 Billion in yearly dived payments for 5 years.  

Saudi Arabia and Aramco will be issuing bonds for quite a while.  

Look for the U.S. Investment Banks talking up KSA and the positive  prospects for ME oil prices in an effort to be awarded banking business.

The math doesn't add up for KSA at sustained $50 oil.   Defense, Social costs, Vision 2030, etc, etc etc.   .   .   .  

What does the end game look like ?

Massive lay offs of expats going on there at the moment. A mate wants to leave this year but all his stuff is in Bahrain so is holding off resigning until the borders reopen. 

 

[BLA + 1,666]

4 minutes ago, NickW said:

Massive lay offs of expats going on there at the moment. A mate wants to leave this year but all his stuff is in Bahrain so is holding off resigning until the borders reopen. 

 

Makes sense.  Hire their own.  But can they handle the operations at this time.  Isn't more training required. 

[NickW + 2,714]

Just now, BLA said:

Makes sense.  Hire their own.  But can they handle the operations at this time.  Isn't more training required. 

The problem is 90% are neither capable or willing to do any work. 

[BLA + 1,666]

5 minutes ago, NickW said:

The problem is 90% are neither capable or willing to do any work.  

Edited June 18, 2020 by BLA

[NickW + 2,714]

1 minute ago, BLA said:

Sounds like a nation of freeloaders. I don't think that is sustainable. 

Yep. 

I worked there for couple of years in their environmental health unit. One of the major areas we monitored was potable water supplies. Involved a lot of testing. I had to mentor this Saudi guy to get him to do the basic sampling as the boss was on his back as he wanted to see some productivity from him. 

Saturday (their Monday) we drove from Dhahran to Ras Tanura which is about 45 minutes. Took about 10 water samples from different places. Showed him the procedures and paperwork. Dropped samples off at RT lab.  Went to beach to see what was going on. Then went for lunch and a slow drive back to Dhahran. Said to him you can string this out for a day. No hassle and you look nice and busy. 

Next day I said right we are off to Abqaiq (45 min drive) to do the same. He says - oh no I can't I need to rest after yesterday. 😀

Most of them are like that. 

[ronwagn + 6,290]

12 hours ago, BLA said:

As part of Aramco IPO they guaranteed a $75 Billion yearly dividend payments for 5 years.  

Saudi Arabia and Aramco will be issuing bonds for quite a while.  Only 4 1/2 years to go. 

Whereas only 1.5% of Aramco stock was offered in the IPO most of the $75 Billion dividend ($73,875,000) goes to the the Sovereign Wealth Fund.  Aramco will put debt on their books as the Sovereign Wealth Fund reaps the benefits.  Nice being a majority owner. 

Look for the U.S. Investment Banks talking up KSA and the positive  prospects for ME oil prices in an effort to be awarded banking business.

The math doesn't add up for KSA at sustained $50 oil.   Defense, Social costs, Vision 2030, etc, etc etc.   .   .   .  

What does the end game look like ?

I can see a leveling of the Saudi citizens wealth at a lower level and the House of Saud diminishing to a much less powerful group financially, then possibly losing control. I would guess they are done in a few years. 

Analogies abound. Russia's Putin is having trouble with getting the people ready to accept him as leader for life. Russia is in a similar situation to Saudi Arabia. So are all countries that are overly dependent on fossil fuel income. Fossil fuel is so abundant and now has some other competition due to Global Warming believers wanting only wind and solar etc. North America can meet its own needs, but may have some temporary problems due to poor planning. China has many low price fuel options. 

Interesting times!