Betting the House of Saud

9 April 2020 By George Hay Follow @gfhay

The kingdom’s wealth fund looks to be ditching diversification by snapping up stakes in big European oil groups. Unless MbS knows something that others don’t, buying stock on the open market is riskier than a classic Sage of Omaha swoop. Oil groups may also be cheap for a reason.

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Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, has accumulated stakes worth about $1 billion in four major European oil companies, the Wall Street Journal reported on April 8, citing people familiar with the matter.

The four companies are Norway's Equinor, Anglo-Dutch energy company Royal Dutch Shell, France's Total and Italy's Eni, according to the newspaper.

The fund built a stake of about $200 million in Equinor in the days around a sharp rally in oil prices last week, the Journal reported, adding it could not learn the size of the stakes bought in the other three companies, but that the combined stakes were worth about $1 billion.

A Saudi official cited by the Journal said that similar deals could take place in the future as well.

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