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Saudi Aramco IPO

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Re: Saudi Aramco Reportedly Shelves IPO In “Face-Saving” Mov

Unread postby rockdoc123 » Sun 15 Oct 2017, 10:36:53

The BBC reports on a possible problem with listing in New York:


I chuckled when I saw this comment given the Saudis can already be sued given they are invested heavily in the US both in treasuries, banks etc. In fact they have already been sued and the Saudis have argued that charges should be dismissed since 1. there is no proof of direct connection and 2. soverign immunity. Why would they worry about something happening in the future that has already happened? And basically, they can be sued anywhere in the world, the issue with having any business in parts of the US (New York state as an example) is the law is set up in such a manner to favor class action suits whether they have merit or not.
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Re: Saudi Aramco Reportedly Shelves IPO In “Face-Saving” Mov

Unread postby ROCKMAN » Sun 15 Oct 2017, 11:09:10

Doc - I've told the story before: folks think even if you win a judgement against a foreign govt you'll never collect. Years ago my stepdaughter represented a firm that was sued by a Big Oil because it decided to take some of its oil fields away without cause. The judgement won was $850 million. And the govt paid. Can't give more details since she made me promise. The deal also included a nondisclosure agreement signed by all.

So where did the leverage come from? She explained it was from the IMF (International Monetary Fund) and World Bank:

"Known collectively as the Bretton Woods Institutions after the remote village in New Hampshire, U.S.A., where they were founded by the delegates of 44 nations in July 1944, the Bank and the IMF are twin intergovernmental pillars supporting the structure of the world's economic and financial order."

Apparently they can cripple a country's foreign trade operations if you piss them off. But could they hold the same lever over the KSA as a much smaller country? I have no idea. OTOH given how much international trade the KSA is involved in they might have greater influence.
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Re: Saudi Aramco Reportedly Shelves IPO In “Face-Saving” Mov

Unread postby rockdoc123 » Sun 15 Oct 2017, 12:18:07

Indeed. It is well known that Mobil Oil eventually received compensation from Iran for nationalizing their oil reserves. It was a very big payment, just can't remember the number. Note also that the Argentine national oil company YPF ended up compensating Repsol for the loss they incurred when the gov't nationalized their holdings about 6 or so years ago. All Respol had to do was file a claim and the Argentines ponied up (eventually after a lot of negotiation) simply because they didn't want the messiness and expense of a trial (which they would lose anyway).
As a consequence of that issue what you find now in profit sharing or royalty/tax agreements with foreign governments on their soil is they attempt to include a statement regarding sovereign immunity. The tact by most international companies now when they sign an agreement with a foreign government is to get that government to waive its' right to sovereign immunity as it applies to that contract which avoids the long litigation that would otherwise ensue if they did something to invalidate your contract. Note also that almost all of these agreements designate the court of arbitration and court of litigation. Back when I was still in the game we refused to sign anything that litigated in the US and usually tried for London.
I think in reality that Saudi Arabia could not argue for sovereign immunity for activities outside of their country but could for decisions and activities that took place inside of SA. But as my wife keeps reminding me (for decades now) I'm not a lawyer (she is/was) :P
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Re: Saudi Aramco Reportedly Shelves IPO In “Face-Saving” Mov

Unread postby ROCKMAN » Sun 15 Oct 2017, 13:48:44

Looker - "Do you mean Rockdoc. or Rockman? They are two different people." There's you go again: embarrassing the terminally confused. They have their unfounded prejudices etched in stone. Or "rock" if you prefer. Shame on you!!! LOL.
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Re: Saudi Aramco Reportedly Shelves IPO In “Face-Saving” Mov

Unread postby onlooker » Sun 15 Oct 2017, 13:50:55

ROCKMAN wrote:Looker - "Do you mean Rockdoc. or Rockman? They are two different people." There's you go again: embarrassing the terminally confused. They have their unfounded prejudices etched in stone. Or "rock" if you prefer. Shame on you!!! LOL.

I personally prefer the Rockman, he is generally less grouchy than Rockdoc and has that novel 3rd person narraration going :lol:
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Re: Saudi Aramco Reportedly Shelves IPO In “Face-Saving” Mov

Unread postby pstarr » Sun 15 Oct 2017, 14:18:56

onlooker wrote:
ROCKMAN wrote:Looker - "Do you mean Rockdoc. or Rockman? They are two different people." There's you go again: embarrassing the terminally confused. They have their unfounded prejudices etched in stone. Or "rock" if you prefer. Shame on you!!! LOL.

I personally prefer the Rockman, he is generally less grouchy than Rockdoc and has that novel 3rd person narraration going :lol:

It is charming :-D 8)
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Saudi Arabia Oil Minister Says Full Aramco IPO on Track for

Unread postby AdamB » Sat 21 Oct 2017, 19:51:37

Saudi Arabia is still aiming to complete both international and domestic portions of the initial public offering of its state oil company in 2018, Oil Minister Khalid Al-Falih said Tuesday. Asked whether both parts of the IPO will happen next year, Al-Falih said: "Yes of course; it is on track." He declined to answer questions on whether Chinese investors were interested in buying ahead of the IPO as cornerstone investors. People familiar with the situation said last week that the kingdom is wondering whether to delay the international portion of the offering until at least 2019. A two-stage Saudi Aramco IPO is one of several options being considered, they said, asking not to be identified because discussions are private. Another plan would include listing in Riyadh next year and privately selling a stake to one or several cornerstone investors, one of the


Saudi Oil Minister says IPO is ON!
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Re: Saudi Arabia Oil Minister Says Full Aramco IPO on Track

Unread postby Subjectivist » Mon 23 Oct 2017, 19:37:57

No surprise, if they call a halt now they would look weak to the rest of OPEC and they are not going to do that, even if it hurts them in the long run!
II Chronicles 7:14 if my people, who are called by my name, will humble themselves and pray and seek my face and turn from their wicked ways, then I will hear from heaven, and I will forgive their sin and will heal their land.
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‘Transformation Is Happening’: Saudi Aramco’s Chief on Futur

Unread postby AdamB » Sun 29 Oct 2017, 22:12:11



As Saudi Aramco, the Saudi national oil company, prepares for a widely-awaited initial public offering next year, its chief executive, Amin H. Nasser, is at the center of the planning. Mr. Nasser has run Aramco, which produces more oil than any other company in the world, since 2015, and also oversees a wide range of joint ventures and investments. Along with the public offering, Aramco is also crucial to Saudi-led efforts to cut oil production in an effort to buoy prices. Brent crude, the international benchmark, was above $100 a barrel in 2014 before tumbling sharply. It is now at about $60 a barrel. He spoke to Stanley Reed, a New York Times reporter, on the sidelines of an event sponsored by the Oil and Gas Climate Initiative, a partnership of 10 international oil companies that aims to reduce greenhouse gas emissions .


‘Transformation Is Happening’: Saudi Aramco’s Chief on Future of Oil
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: ‘Transformation Is Happening’: Saudi Aramco’s Chief on F

Unread postby ROCKMAN » Mon 30 Oct 2017, 11:07:41

Truly comical that he would qualify the Saudi govt owning 95% of the Aramco stock as "privatization". LOL.
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Re: Saudi Aramco IPO

Unread postby Keith_McClary » Sun 05 Nov 2017, 00:17:23

Saudi Purge Sees Senior Princes, Top Billionaire Detained
I was expecting a military coup. Maybe that will come next.
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Re: Saudi Aramco IPO

Unread postby Cog » Sun 05 Nov 2017, 06:00:27

The young prince is just taking out the trash. The Aramco IPO will take place and will be listed on the NYSE just as Emperor Trump wishes.

"Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange. Important to the United States"! Trump on Twitter

Those loyal to the House of Bush and Clinton have been swept away. A new era begins with House of Trump. The symbolism of the sword dance in Saudi Arabia with Trump should have been obvious.
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Re: Saudi Aramco IPO

Unread postby M_B_S » Sun 05 Nov 2017, 09:24:48

The vital question is:

WHO wants to buy the saltwater in Ghawar? :twisted:
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PEAK GHAWAR was years ago.....
Image

PEAK OIL

The real M_B_S is asking....
Archiv look:
https://www.energyandcapital.com/articl ... f-oil/1204
http://www.theoildrum.com/node/9045
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Re: Saudi Aramco IPO

Unread postby Cog » Sun 05 Nov 2017, 10:12:05

The Oil Drum? Might as well quote Zerohedge. The Saudi's are merrily pumping away with no end in sight.
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A lesson for Aramco

Unread postby AdamB » Thu 14 Dec 2017, 22:25:01

IF you have ever wondered what national oil companies are for, one of the bigger ones offers this pithy take on the cover of its annual report: This isn't strange; national oil companies, or NOCs in industry parlance, are often their country's biggest corporate entity, employer and source of public revenue. The question is what they offer international investors, especially as we await the initial public offering (IPO) of the biggest NOC of all, Saudi Arabian Oil Co, or Saudi Aramco. The proliferation of listed NOCs is mostly a post-2000 phenomenon. These include Russia's Rosneft Oil Co PJSC; China's PetroChina Co Ltd, China Petroleum & Chemical Corp, and CNOOC Ltd; Petroleo Brasileiro SA of Brazil; and Norway's Statoil ASA. The timing, amid a boom in oil prices and emerging markets, was no accident. The IPO pitches shared common themes like sheer scale and


A lesson for Aramco
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Saudi Arabia Considers Adding to $10 Billion Loan

Unread postby AdamB » Tue 09 Jan 2018, 20:25:17


Saudi Arabia is considering increasing the size of a $10 billion loan after banks on the 2016 deal offered to lend more, people familiar with the matter said. Lenders are in talks with the government to increase the amount it borrowed, said the people, asking not to be identified because the discussions are private. Another option being discussed is to arrange new bilateral or club facilities with the banks, they said. The kingdom could add as much as $5 billion to the loan, one of the people said. Final decisions haven’t been made and discussions may not result in a new deal, the people said. Saudi Arabia’s ministry of finance didn’t immediately respond to requests for comment. The world’s biggest oil exporter plans to borrow about $31 billion this year to bridge an expected budget deficit of $52 billion and fund growth plans after


Saudi Arabia Considers Adding to $10 Billion Loan
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Banks expected to share tiny proportion of mammoth Saudi Ara

Unread postby AdamB » Thu 18 Jan 2018, 11:01:16


The banks that will advise and execute Saudi Aramco’s stock market listing are expected to share a tiny proportion of the $100 billion Riyadh hopes to raise in its initial public offering, according to banking sources and industry insiders. Investment banks involved in the listing IPO-ARMO.SE are expected to share a fifth of a percent of the money raised, they said, but noted that could still amount to about $200 million. The listing of 5 percent of the state oil company’s shares could be the largest IPO in history, almost five times the size of current record holder Alibaba (BABA.N), the Chinese e-commerce company which went public in New York in 2014. Banks are competing fiercely for mandates in the IPO because it is viewed as a gateway to other deals expected to emerge from Saudi Arabia’s plan to revamp its economy via


Banks expected to share tiny proportion of mammoth Saudi Aramco IPO
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Re: THE Saudi Arabian Oil Co. (ARAMCO) pt 3

Unread postby ROCKMAN » Thu 18 Jan 2018, 15:19:31

Hopefully I explain for the last time. The Saudi govt will not be offering any its oil for sale. They are offering access to the potential profits of a corporation…Aramco. Owning 5% of the Aramco stock does not grant any of those new shareholders ownership of 1 bbl of Saudi Arabian oil. Even more important it does not allow any ability to impact the prices or production rates of Saudi oil. In fact, being a very small minority owner doesn’t allow them to have any impact on the operations of the Aramco company. Aramco may technically soon be called a public company but it will still be controlled entirely for the sole benefit of the Saudi govt…the 95% ownership.

Aramco is a CORPORATION that has a production sharing agreement with the Saudi govt which, to the best of my knowledge, has never been made public. Question: how much profit did the Aramco CORPORATION make in 2017? I don't think that has been made public either. But given the Saudi govt taxed Aramco at 85% in 2017 I doubt it was very much. And that's the tax on its NET INCOME: remaining revenue after paying for all capex, production costs and overhead. In reality the Aramco CORPORATION may have made little to no profit since the day it was formed.

The Saudi govt has promised to reduce the tax rate to 50% when the IPO is placed. But there is no law preventing it from increasing it back to 85% (or 99%) 6 months after the IPO. It has the freedom to change its CORPORATE tax rate as was just done in the USA.
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Re: THE Saudi Arabian Oil Co. (ARAMCO) pt 3

Unread postby GASMON » Thu 18 Jan 2018, 15:54:50

So, would you invest in Aramco Rock ?

I wouldn't touch it with a barge pole - I'll stick with my Shell Shares !!

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Re: THE Saudi Arabian Oil Co. (ARAMCO) pt 3

Unread postby rockdoc123 » Thu 18 Jan 2018, 19:24:52

The Saudi govt will not be offering any its oil for sale. They are offering access to the potential profits of a corporation…Aramco. Owning 5% of the Aramco stock does not grant any of those new shareholders ownership of 1 bbl of Saudi Arabian oil.


no different than in most countries in the world where the State owns all the hydrocarbons and operators lift oil to get either a share of the profits or net out production from royalty. And it definitely isn't any difference than buying share in any oil and gas company, all you have is a share, you don't actually get any of the profit (except where dividends are present) but count on share price rising through continued successful efforts.

In fact, being a very small minority owner doesn’t allow them to have any impact on the operations of the Aramco company.


But being a shareholder in any company, even when it is owned predominantly by individual shareholders yields little ability to impact operations. It is only done when there is greater than 10% held by one party who can then call a special shareholders meeting to try and force management to do something different. IN reality this isn't much different than a normal corporation share offering it just means the float is relatively small.

Aramco is a CORPORATION that has a production sharing agreement with the Saudi govt which, to the best of my knowledge, has never been made public.


I believe it is a tax/royalty agreement and not a PSA. Aramco is private and the point of the IPO is to make them public.

Question: how much profit did the Aramco CORPORATION make in 2017? I


Really has no bearing on the IPO company as the tax/royalty structure will be different. The valuation that everyone is tossing out there takes this into account, which is why they believe a $100MM sale of that amount of shares is a reasonable expectation.

The Saudi govt has promised to reduce the tax rate to 50% when the IPO is placed. But there is no law preventing it from increasing it back to 85% (or 99%) 6 months after the IPO. It has the freedom to change its CORPORATE tax rate as was just done in the USA.


And changes in tax/royalty structures happen all over the world. Interestingly enough when I explain to people that such changes have happened more frequently and with less warning in the US and Canada than they have in places like Colombia or Algeria they refuse to believe it.

I wouldn't touch it with a barge pole - I'll stick with my Shell Shares !!


Without knowing what Aramco will eventually do in the future regarding further dilution, issuing dividends etc such statements set you up for future ridicule I'm afraid. The general public will see nada of the IPO share, it will be divided up amongst the investment banks. When it breaks on the market the price will invariably rise for a couple of days and then fall back to the IPO level or slightly below within a few weeks. The future share price will be dependent more on what Aramco reports (which they will have to legally and all reserves and financials will have to be audited) than anything else. Personally, I am going to wait a few weeks for the initial exhuberance to settle down and once all the day traders are out of the mix I will pick up some amount. It isn't going to devalue anytime soon and the share price will be based on some considerable due diligence by the banks.
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