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Page added on October 16, 2016
The Saudi Aramco IPO May Be Bigger Than First Thought
Information about Saudi Aramco IPO advisors to be released soon
Saudi Aramco plans to sell shares in its entire business, the company’s CEO Amin Nasser said. When the IPO was originally announced, there was speculation that the kingdom might only seek to sell shares in the downstream operations of the world’s biggest oil company.
The company plans to list shares on the Saudi stock market and is also considering foreign bourses in London, Hong Kong and New York, according to Nasser. Aramco hopes to sell approximately a 5 percent stake in the company, reports Bloomberg.
Is it the most valuable company on the planet?
Valuations on the company vary as the Saudi-owned integrated oil company only releases select information, but analysts have put the worth of the company between $1 and $10 trillion, potentially making it the most valuable company on the planet. Saudi Aramco’s reserves are more than 12-times greater than those of ExxonMobil (ticker: XOM), its closest Western oil competitor in terms of size.
“We need to do a lot of internal work to prepare for this listing,” Nasser said. “We are listing a part of the entire company, and not just downstream,” Nasser said. “There are no obstacles for the IPO of Aramco,” he added.
“We are one of the few companies that is still investing. We will continue to invest in our core business. Our rigs are increasing, and our overall activities are increasing.”
The company will announce a list of investment banks and consultants “very soon” its CEO said. Many Western investors have been advised against the deal, however, due to the opacity of the company, and fear that it could become another version of Petrobras, Brazil’s state-owned oil company, currently the most in-debt oil company in the world.
Looking for Money with J.P. Morgan
Bloomberg and other media have reported for the past few months that Saudi Arabia is in America with J.P. Morgan looking for money. Back in May 2016, it was thought that the Kingdom would raise $15 billion. On October 3, 2016, Doha Bank CEO Raghavan Seetharaman told Bloomberg Markets Middle East: “They have been pronouncing for borrowing for nine months, and they have still not executed, I’m surprised. They should have gone and borrowed when they knew they would have a budget deficit.”
Seetharaman said the austerity measures now undertaken by Saudi Arabia are historic: “The Saudi economy is straining, the banking sector is struggling with liquidity pressure and lending has slowed. As a result, the kingdom is undertaking austerity measures, including cuts to public-sector pay, that are not really required.”
Further complicating the bond issuance is how the U.S. Congress roundly rejected President Obama’s veto of the 9/11 Legislation.
By Oil and Gas 360
8 Comments on "The Saudi Aramco IPO May Be Bigger Than First Thought"
joe on Sun, 16th Oct 2016 9:12 am
Greed ‘trumps’even 9-11. With Saudi funding the Clinton campaign, surely Aramco (aka KSA) has bought both sides of the isle. Somehow I think the ipo will be the lest generational spluge of oil and the party will last one more lifetime before war and pollution destroys the Earth and everything on it. Are we seriously saying that if the 1% own shares in the worlds greatest cash machine they will get rid of it? This is the Saudis King’s get out of jail free/insurance policy. This is oils answer to the Paris agreement.
penury on Sun, 16th Oct 2016 10:26 am
It appears to be a final desperate measure by the elites to maintain a facade of wealth for some of its members. Meanwhile the world burns, war is beckoning and poverty and misery are increasing and largely being ignored in Europe, ME and Africa. Desperation of the elites in the U.S. is resulting in increased tensions with Russia and China, Happy days are not here again.
.5mt on Sun, 16th Oct 2016 10:58 am
Things purdy bad. End of the petro-dollar again. Cats and dawg’s playing together, ice melting, too much or not enough of everything. Go long on NaCl, it has a better long term track record than gold, of course, that’s way long term, say 1000 years. Steady on the fish hooks and whiskey, dump tetracycline like a bad date.
Kenz300 on Sun, 16th Oct 2016 11:37 am
Spread the risk……
Diversify away from fossil fuels.
peakyeast on Sun, 16th Oct 2016 4:55 pm
“but analysts have put the worth of the company between $1 and $10 trillion, potentially making it the most valuable company on the planet.”..
A company that seems to be sure to be less worth with every barrel being pumped up?
tk on Sun, 16th Oct 2016 5:43 pm
There is no “diversify away from fossil fuels”
anymore… that point was missed in the 70s,
the Dollar was already backed by the energy
of oil, not gold, back then, in that sense it was
not a “fiat currency”, but it is since 2005.
The US would have imploded back then, if it wouldn’t had pegged the Dollar to external oil
sources, mainly Saudi oil.
That was ALL Bretton Woods and OPEC was about.
Enjoy the last seconds of the human experience in this plane of existence.
We will see if we die as humans (no nuclear war) or primates (nuclear war).
Much love to all of you.
peakyeast on Sun, 16th Oct 2016 6:43 pm
The US $ value has been backed by the threat of violence since they discarded the goldstandard.
I am sure I would believe a $ is something worth when Uncle Sam puts a gun to my head and tries to pay me with $: The value is my life albeit at the loss of many positive views on life.
And that is exactly what the USA has been doing ever since.
Survivalist on Sun, 16th Oct 2016 10:20 pm
(Behind a paywall in The Times)
http://www.thetimes.co.uk/edition/business/saudis-keep-lid-on-reserves-j9fksr6lj
Saudis keep lid on reserves:
“Saudi Arabia is crafting a plan to avoid revealing its oil reserves as part of the $2 trillion (£1.6 trillion) stock market float of state oil giant Saudi Aramco.”
“It is considering creating a holding company that would be handed a production contract to pump the crude but would not own the reserves. A third party, understood to be British oil consultancy Gaffney Cline & Associates, would give an assessment to assure investors that there is enough oil to last for several decades, but stop short of revealing the overall figure. Aramco declined to comment.”