Saudi Aramco will be valued at more than US$2 trillion and plans to sell less than five per cent of it through an initial public offering (IPO), deputy Crown Prince Mohammed bin Salman has announced
According to Reuters, the Kingdom wants Saudi Aramco to be transformed into a holding company with an elected board. Subsidiaries of the company would also be sold in IPOs as part of a privatisation drive and to bring more transparency to the oil giant, Prince Salman said.
“If one per cent of Aramco is offered to the market, it will be the biggest IPO on earth,” he noted.
Prince Salman added that he did not expect oil prices to fall below US$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.
Saudi Aramco owns crude reserves of 265bn barrels, which more than 15 per cent of global oil deposits, reports suggested.
It produces more than 10mn bpd, three times as much as the world’s largest listed oil company, ExxonMobil, while its reserves are more than 10 times bigger. If Saudi Aramco were ever to go public, it would probably become the first company to be valued at more than US$1 trillion.
The listing of Aramco would be on the Saudi Arabia’s stock market, he said, adding that one idea being studied was to set up a fund in the USA market which would buy shares in Aramco to help to bring liquidity.
It is, however, not clear which of Saudi Aramco’s ventures might be involved in a sale but the range of candidates is wide.
“We restructured the fund. We included new assets in the fund, Saudi Aramco and others, and we fixed the problems of the current assets that the public investment fund owns, both in terms of companies and other projects,” Prince Salman added.
