Saudi Arabia expects state oil company Saudi Aramco to be valued at more than $2 trillion and plans to sell less than 5% of it through an initial public offering, Deputy Crown Prince Mohammed bin Salman said. He said in a television interview that he wanted it to be transformed into a holding company with an elected board, Reuters reported.
“Subsidiaries of the company would also be sold in IPOs as part of a privatization drive and to bring more transparency to the oil giant,” Mohammed said.
“If 1% of Aramco is offered to the market, just 1%, it will be the biggest IPO on earth.”
Mohammed added that he did not expect oil prices to fall below $30 a barrel again because of improving global demand and that Saudi Arabia’s economic reform plans would not be threatened even if oil does drop that far.
Aramco was once run by Americans but has long been a Saudi state corporation. It has around 265 billion barrels of crude reserves, more than 15% of global oil deposits.
It produces more than 10 million barrels per day, three times as much as the world’s largest listed oil company, ExxonMobil, while its reserves are more than 10 times bigger. If Aramco were ever to go public, it would probably become the first company to be valued at more than $1 trillion. “Less than 5% from the parent company ... we are trying to separate it and make Aramco a holding company,” Mohammed said.
The listing of Aramco would be on the Saudi stock market, he added, noting that one idea being studied was to set up a fund in the US market, which would buy shares in Aramco to help bring liquidity.
