Saudi Arabian Oil Company, also known as Saudi Aramco, will be listed in early 2018, the kingdom’s energy minister said in Los Angeles on Thursday.
"The initial public offering of the company remains on track while the government considers how to meet all its objectives from the sale of a stake in the world’s biggest oil company," Khalid Al-Falih was also quoted as saying by Bloomberg. The process requires time as the government considers how to “optimize” Aramco’s value for both potential shareholders and for the kingdom, as it pursues a plan to diversify its economy, Falih said.
“We have to optimize—optimize for the kingdom’s interest as the owners of the company and the owners of the resource today, optimize for the investors who have to enter into this,” Al-Falih said. “Their interests have to be protected.” Saudi Arabia plans to raise about $100 billion by selling about 5% of Aramco as part of Deputy Crown Prince Mohammed bin Salman’s initiative to transform the kingdom’s economy for a post-hydrocarbon age.
Falih said the government wants the private sector to account for two-thirds of the economy. "Considerations extend beyond achieving the maximum IPO valuation," he said. The kingdom aims to create “the most valuable asset company” in terms of “its capability, its potential to grow, its potential to create value for all of the stakeholders”, he added. Falih noted that no decision has been made yet on where to list the company.
While all the major exchanges are “vying” to host Aramco, each has strengths and weaknesses, and—in some cases—risks. Some locations present drawbacks, including in “terms of legal exposure and tax exposure”, he said.
The energy minister further said Saudi Arabia’s national stock exchange, the Tadawul, will be able to accommodate a company on the scale of Aramco once the exchange’s expansion plans are complete. The Tadawul, one of the world’s most closed stock markets, is increasing international participation after allowing limited foreign direct investment last June.
Falih also gave his views on oil market conditions ahead of informal OPEC talks scheduled for next month in Algeria. While it would be “positive” for producers to agree on limiting production, more substantial action, such as output cuts, are not necessary because the global oversupply is already subsiding, he said.
