When the world was in COVID shut down, very few people travelled. When the restrictions were lifted, the travelling public has regained its pre COVID numbers. For anyone who has travelled, this is good. When you were travelling, you needed oil or gasoline to move about. During COVID, all the share prices for oil and gas companies fell and have since regain their previous positions and when the commodity price of oil goes up, share prices go up. The world still needs oil and gas. The biggest oil and gas company in the world is Saudi Arabia’s Aramco.

The easiest place to drill oil and gas in the world is still Saudi Arabia because of the very rich oil pools that cost less than $5 to drill. This has made Aramco – long a cash cow for the Saudi state.

In an article by Yousef Saba, Hadeel Al Sayegh and Maha El Dahan of Reuters, Saudi Arabia’s sale of shares in oil giant Aramco drew more demand that the stock on offer raising up to $13.1 billion. Aramco is selling 0.7% of its shares. The Saudi government directly holds just more than 82%, PIF (Public Investment Fund) owns 16%.

The world’s top investment banks are helping to manage the sale – Citi, Goldman Sachs, HSBC, JPMorgan, Bank of America and Morgan Stanley. In addition, local dealers in Saudi including Saudi National Bank, Al Rajhi Capital, Riyad Capital and Saudi Fransi are involved. Besides the big investment banks, Credit Suisse Saudi Arabia, BNP Paribas, Bank of China International and China International Capital Corp are seeking buyers for the shares. 90% of the shares were allocated to institutional investors and 10% to retail investors.

Saudi Arabia is producing about 9 million barrels a day of crude or 75% of its maximum capacity.

Linking to dividend paying stocks, as long as people have a desire to see the world or at least travel from their home location, there will be a need for oil and gas. With all commodities, supply and demand play a keep role, but if you can a low-cost producer which allows that even when prices fluctuate the company still makes money, it is definitely worth examining and investing in. Those are the type of companies you can buy and hold for a long time while you enjoy the dividends/

There are more questions than answers, till the next time – to raising questions.