Oil tanks at an oil processing plant owned by Saudi Aramco, a Saudi Arabian state oil and gas company, in the Abqaiq oil field.

Stanislav Krasilnikov | TASS via Getty Images

The chief executive of the world’s largest oil company said on Wednesday that he believes it will continue to be able to meet dividend payout expectations after the Saudi government announced plans to prioritize investments.

Crown Prince Mohammed bin Salman said Tuesday that state-backed oil giant Saudi Aramco and petrochemical company SABIC will fund most of a Riyals 5 trillion ($ 1.3 trillion) private sector investment plan for economic diversification.

“We are very excited about the government’s announcement of the Shareek program yesterday,” said Amin Nasser, CEO of Saudi Aramco, in an exclusive interview with CNBC’s Dan Murphy.

“We support this initiative, which is very much geared towards Vision 2030. It promotes GDP growth through new investments and will have a multiplier effect for the Saudi economy.”

The government’s 5 trillion riyal investment plan for the private sector is part of the 12 trillion riyal investment planned by 2030.

The Crown Prince said the government had asked the largest participating companies to cut dividends and redirect the money to new investments, according to Reuters. For those who own shares in Saudi Aramco, he reiterated that dividend prices would remain stable.

“We have promised them that and we will keep this promise,” said the Crown Prince, reported Reuters. The oil giant is 98% owned by the government.

When asked how sustainable the company’s dividend would prove to be under the government’s investment plans for the private sector, Nasser said it was a “voluntary” program that took private interests into account.

“As I said, the company has a strong balance sheet, is one of the most cost-effective producers in the world and is able to carry out mega projects and gigaprojects while meeting the expectations of its shareholders.”

Saudi Aramco’s shares, listed on the Saudi Stock Exchange, traded more than 1.8% higher on Wednesday.

Earlier this month, Saudi Aramco reported a 44% drop in full-year 2020 earnings as it fell short of analyst expectations. The company raised additional debt last year to maintain its dividend payout of $ 75 billion and announced a cut in spending in the coming year.

Describing the past 12 months as “one of the most challenging years in recent history,” Nasser cited lower oil prices and weaker margins in refineries and chemicals.

The coronavirus pandemic sparked a historic plunge in oil prices last year as unprecedented public health measures to contain the spread of the disease coincided with reduced mobility around the world.

For Saudi Arabia’s oil-rich economy, the global health crisis and turbulence in the oil market were setbacks for Crown Prince Mohammed bin Salman’s plans to turn away from oil exports and reduce unemployment.