Aramco Excludes Oil Reserves From IPO

Aramco Excludes Oil Reserves From IPOAramco Excludes Oil Reserves From IPO

An initial public offering of Saudi Aramco, the world's biggest oil company, could be on the local or international markets but would not include Saudi oil reserves, the company's chairman told Saudi-owned Al-Arabiya television.

"The reserves would not be sold, but the company's ability to produce from the reserves is being studied," Khalid al-Falih told the channel in an interview from Davos, Switzerland, where the annual World Economic Forum was held last week, Reuters reported.

In an interview with The Economist earlier this month, Saudi Deputy Crown Prince Mohammed bin Salman said Riyadh might sell shares in Aramco as part of a privatization drive.

Aramco has crude reserves estimated at about 265 billion barrels, over 15% of all global oil deposits, so it could become the first listed company valued at $1 trillion or more if it went public, analysts have estimated.

But several sources familiar with the matter told Reuters that Aramco's massive size and the confidentiality surrounding it as the main instrument of the kingdom's oil policy pose hurdles to any listing of the parent firm.

They said Saudi Arabia is considering selling shares in refining ventures with foreign oil firms.

Falih also said there would be legal studies to make sure that what is offered is not the kingdom's crude reserves.

"The reserves belong to the state but the company's ability to convert these reserves ... into a financial value and at the same time for the company to have a portion of these profits will be part of the value of the company," Falih added.