Riyadh considers listing Saudi Aramco

07 January 2016

State oil company could be worth more than $10 trillion

Riyadh is considering plans to list shares in state-owned oil producer Saudi Aramco.

In an interview with The Economist on 4 January, Deputy Crown Prince Mohammed bin Salman al-Saud said that a decision will be taken in the next few months and that a listing would make the company more transparent.

“Personally I’m enthusiastic about this step,” he said. “I believe it is in the interest of the Saudi market, and it is in the interest of Aramco, and it is for the interest of more transparency, and to counter corruption, if any, that may be circling around Aramco.”

In a research note, London-based Capital Economics said: “Aramco could be worth anything from $1 trillion to upwards of $10 trillion, which would make it the most valuable company in the world.”

The firm added that a full and complete privatisation of Aramco’s core activities seems highly unlikely, although a small stake could be listed on the Saudi Stock Exchange (Tadawul).

The Economist reports that Prince Mohammed has held two high-level meetings to discuss an initial public offering (IPO) of the company, adding that a range of options are being considered from listing downstream firms to the core oil producing business. Initial discussions are reported to involve floating about 5 per cent of the company.

Prince Mohammed took control of Saudi Aramco in 2015 after he become Deputy Crown Prince. He heads the Supreme Council Of Saudi Arabian Oil Company (Saudi Aramco), which was formed to replace the Supreme Council of Petroleum and Mineral Affairs.

In the interview with The Economist, Deputy Crown Prince Mohammed also said that VAT could be introduced this year, and non-oil government income will rise to $100bn in five years. He also covered issues including relations with Iran, developments in Yemen and the role of the US.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.