Saudi Arabia formalises Aramco concession agreement

28 August 2018
Riyadh has granted Saudi Aramco a renewable 40-year concession as part of preparations for the planned part-listing of the state oil company

Saudi Arabia has granted state oil company Saudi Aramco a 40-year concession contract as part of preparations for listing part of the company.

The UK-based Financial Times reported that Aramco had been granted a 40-year concession which can be extended and/or renewed in the future. Previously, Aramco had operated on an open-ended concession, according to the Financial Times report.

The kingdom's Energy Minister Khalid al-Falih said on 23 August that the government had reissued a "long term exclusive concession" in a statement released in response to media reports that the partial listing of Aramco had been called off, which the government denies.

The amendment to Aramco's concession is unlikely to mean any real changes in Aramco's activities unless an initial public offering (IPO) takes place, with the government remaining in full control of the state oil company and the kingdom's oilfields.

While Riyadh has denied that the IPO has been called off, it has now said that the partial-listing will take place at a "time of the government's choosing," leading to many in the international financial sector to question whether it will happen at all. The IPO, which forms the centrepiece of the kingdom's ambitious Vision 2030 reform programme, was originally planned for 2018.

 

 

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