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
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
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
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.
In fact, being a very small minority owner doesn’t allow them to have any impact on the operations of the Aramco company.
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
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.
I wouldn't touch it with a barge pole - I'll stick with my Shell Shares !!
@Rockdoc: Where do you see your profit coming from when purchasing these shares?
Mohammed bin Salman bin Abdulaziz al Saud, the Crown Prince of Saudi Arabia, will be leaving his kingdom next month for a three-week charm tour. His agenda hasn’t yet been revealed, but sources say MbS (as he’s known) will start his tour March 7 in London, then head to New York, Washington, San Francisco and maybe even Texas. It was supposed to be his father, King Salman bin Abdulaziz al Saud, 82, visiting the United States, as agreed in a phone call between him and President Donald Trump last September. But the monarch has allowed himself to be sidelined, to underscore that his 33-year-old crown prince is the one running the show. Prince Mohammed is handsome, charismatic and sports a luxurious beard. He’s imposing, like his 6’4” grandfather, Ibn Saud, the founding King. The last time the prince came to the U.S., in
The IPO of Saudi Aramco is “proceeding very well,” CEO Amin Nasser told the crowd at the CERAWeek conference here in Houston today. He didn’t elaborate much, saying that the ultimate decision to take the plunge would lay with the Saudi government — namely Crown Prince Mohammed bin Salman. A domestic listing on Riyadh’s Tadawul exchange would be the easiest avenue, though sources close to the Saudis say there’s a real desire for shares to trade in New York, London or Hong Kong. Nasser insisted that the world is far from seeing Peak Oil demand. “Oil will maintain its key role in the global energy mix for the forseeable future,” he said, given that 99% of all vehicles on the road remain powered by internal combustion engines. To meet that need, said Nasser, the industry must invest $20 trillion in oilfield capex over the
Saudi Arabia’s energy minister hinted the initial public offering of the state oil company Aramco could be delayed until 2019, pushing back a central plank of Crown Prince Mohammed bin Salman’s plan to modernize the economy. Khalid Al-Falih also said the IPO, potentially the largest ever, would be “anchored” by a listing on Saudi Arabia’s local exchange and any international listing would be announced in due course, if at all. “Between December 31st and January 1st there is no value lost for the kingdom,” Al-Falih said in an interview in London. “So, I don’t see this artificial deadline that you refer to as being significant.” Until recently, Saudi officials insisted the IPO was “on track, on time” for 2018, but two months into the year that deadline is looking harder to meet. Still, Al-Falih, who also serves as Aramco’s chairman, insisted the company
And the likely reason for not doing the IPO on a London or US exchange: "While London is preferred over New York, the requirement by both for greater disclosure of sensitive information on Aramco than the Hong Kong exchange is viewed as a drawback by some Saudi officials and advisers, the sources said."
Yep, nothing like investing big $'s in the stock of a company that can keep details of its operations a secret. LOL
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