Saudi Minister Says: Timing of Aramco IPO Not Critical

Saudi Oil Minister Khalid Al-Falih signaled the possibility the initial public offering of Saudi Aramco could be delayed beyond 2019, saying that "timing isn’t critical for the government of Saudi Arabia".

Asked whether the IPO would happen in 2019, Al-Falih said only "that it would be nice". The plan to sell shares in the state oil giant next year was itself a delay from an original plan for 2018, Forbes reported.

A key plank of Saudi Prince Mohammed bin Salman’s plans to reform the Saudi economy, the Aramco IPO would be a seismic event for financial markets. Saudi officials said they hope to raise a record $100 billion by selling a 5% stake, valuing the company at more than $2 trillion, a deal that would dwarf the $25 billion raised by Chinese retailer Alibaba Group Holding Ltd. in 2014.

Yet, analysts, including Sanford C. Bernstein & Company and Rystad Energy AS, have suggested a figure closer to $1 trillion.

"It would be nice if we can do it in 2019," Al-Falih told an audience of officials, executives and investors gathered in Vienna, Austria, for an OPEC industry conference. "There is a lot more at stake than just ticking a box and say: ‘we got this out of the way.’"

For almost two years, Saudi officials said repeatedly the IPO was "on track, on time" for the second half of 2018. But earlier this year, they admitted it would be delayed into 2019. Only a month ago, Al-Falih said that the sale would "most likely" happen next year.

Riyadh is aiming to sell shares on the Saudi local market and perhaps overseas. The international IPO is proving difficult for several reasons. First, Prince Mohammed has said publicly Aramco should be valued at $2 trillion or more, a figure few outside the kingdom consider realistic.