Indications are Riyadh will fulfil its promise of listing Aramco in its entirety
Saudi Aramco is preparing to reveal a set of its financials in an industry-friendly format to give investors a peek into one of the worlds most closely held mega corporations in the world, ahead of its planned share sale.
It is more of a procedural step for a company planning to go public, but it is a definite sign that the wheels are turning and the global energy major is heading in the right direction.
Aramco is also getting ready to publish the list of investment banks and consultants that are advising on its initial public offering (IPO), according to CEO Amin Nasser.
The public flotation, he said, will cover all operations of the company and not just the downstream operations, which is a message to those who doubted Riyadhs intentions of actually going ahead with the announced IPO.
It also negates speculation that the IPO will exclude upstream oil and gas exploration operations and it will be a token listing of the company by way of bundling together some of its refining and distribution operations, so Riyadh can save face.
There are no obstacles for the IPO of Aramco, Nasser was quoted as saying in media reports. Its going very smoothly, and we are on target. We have achieved a lot of progress so far. People have to appreciate the size of Aramco and its complexity.
The company has to do a lot of internal work to prepare for the IPO and it already has achieved a lot of progress for the 2018 transaction. Shares will be traded on the Saudi Stock Exchange (Tadawul) and bourses in London, Tokyo and New York are being considered as international listing destinations.
For the past eight decades, Aramco has been the main revenue earner for Saudi Arabia. It is at the heart of the governments National Transformation Programme (NTP), which lays emphasis on part-privatising state assets. Riyadh plans to sell less than 5 per cent of Aramco on local and international exchanges to raise an estimated $100bn, which values the company in trillions of dollars.
However, even if Aramco is listed in its entirety, Saudi Arabia will still be maintaining strict control of its upstream business and overall decision-making. Aramco as a commercial entity will not be able to decide the production levels or export policies as they will be governed directly by Riyadh.
The kingdoms oil and gas reserves, which Aramco oversees, extracts and exports, will remain sovereign property, Khalid al-Falih, the kingdoms energy minister, said in late January, adding that all options are being considered to reach the best formula for the companys IPO.
No clarification has emerged since.
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