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Saudi oil giant Aramco 2222.SE plans to take on more debt for capital but the increasing appetite for debt would have little to do with dividends, its CFO Ziad Al-Murshed told Bloomberg News in an interview published on Wednesday.
"You'll see us do a couple of things. One is, just take on more debt compared to use of equity. It's nothing to do with the dividend, it is optimising our capital structure so that we end up with a lower weighted average cost of capital," Al-Murshed told Bloomberg in Boston.
Aramco did not immediately respond to a Reuters request to comment on the interview.
Aramco, by paying out generous dividends to the state, its biggest shareholder by far, has contained the country's fiscal deficit while increasing its own debts.
In September, Aramco raised $3 billion from a two-part Islamic bonds, after tapping the debt markets for the second time this year. The oil giant expects to declare total dividends of $124.3 billion in 2024.
The world's top oil exporter raised $6 billion from a three-tranche bond sale in July, ending a three-year debt market hiatus after it issued the same amount in Islamic bonds in 2021.
The company's debt sales will be "regular but not too frequent," Al-Murshed said to Bloomberg, adding that it has no plans to sell more debt for the remainder of 2024. One reason for the company to sell debt will be to widen its investor base, he told Bloomberg.
Aramco has long been a cash cow for Saudi Arabia, which is pouring billions of dollars into its 'Vision 2030' economic overhaul plan to reduce reliance on oil. But lower oil prices and production cuts have weighed on Aramco's profit.
The Saudi government sold a chunk of the company earlier this year, raising $12.35 billion.
(Reporting by Rishabh Jaiswal in Bengaluru; Editing by Rashmi Aich)