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Saudi Aramco IPO

Discussions about the economic and financial ramifications of PEAK OIL

Re: Saudi Aramco IPO

Unread postby Plantagenet » Mon 19 Nov 2018, 12:08:52

WSJ reports today that Saudi Aramco is abandoning the idea of issuing bonds to pay for the planned purchase of SABIC because, once again, they are unwilling to do the disclosures concerning Aramco's financial state and oil reserves that would be required in order for Saudi Aramco to issue bonds on the open market.

This is the exact same concern that helped torpedo the IPO----.

aramco-abandons-plan-for-massive-corporate-bond-sales-to-fund-sabic-deal

Now Saudi Aramco is stalled on the IPO, and has cancelled the bond sale, but they still want to raise a pot of money for Prince Muhammad. But according to the WSJ, there is also a new concern that Prince Muhammad's nasty habit of imprisoning and torturing and murdering his critics, as demonstrated in the Kashoggi case and other cases, might cause people to hesitate before buying bonds or anything else that he is involved with.

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Re: Saudi Aramco IPO

Unread postby pstarr » Mon 19 Nov 2018, 12:46:52

Smoke and mirrors. Nothing but srorrim dna ekomS.

SA has peaked. OPEC has peaked. So goes the world.
SA has peaked. OPEC has peaked. So goes the world.
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Re: Saudi Aramco IPO

Unread postby GASMON » Mon 19 Nov 2018, 14:03:25

Time for some humour (before the oil runs out !!!)

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Re: Saudi Aramco IPO

Unread postby pstarr » Mon 19 Nov 2018, 14:38:20

Gas, you've come over to the doomed side? :lol: 8) Congrats! Did Mike Shellman finally pound some sense into your hard rock skull?
SA has peaked. OPEC has peaked. So goes the world.
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Re: Saudi Aramco IPO

Unread postby GASMON » Mon 19 Nov 2018, 16:17:52

Ha Ha - hard rock skull indeed !!

SA certainly has quite a lot of oil left, but I guess is way past peak and all this pissing around with non disclosure of reserves, dire need for capital, etc etc just about proves it. Like the North Sea (etc, etc,) the easy to get stuff has gone.

Time (soon !!) will tell.

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Mon 19 Nov 2018, 16:47:56

but I guess is way past peak and all this pissing around with non disclosure of reserves, dire need for capital, etc etc just about proves it.


first of all the definition of peak is the point of maximum production...it does not speak directly to reserves.

Image

no evidence of peak production as yet.

Peak oil is the theorized point in time when the maximum rate of extraction of petroleum is reached, after which it is expected to enter terminal decline


and what non-disclosure. Given they haven't executed the IPO as yet nor have issued corporate bonds there is no requirement for them to officially disclose. That being said they have had their reserves audited by D&M and GCA. These companies have stated that they found the Aramco estimates to be accurate.
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Re: Saudi Aramco IPO

Unread postby GASMON » Tue 20 Nov 2018, 04:28:53

https://www.zerohedge.com/news/2018-11- ... rate-bonds

The Aramco acquisition of the Sabic stake was expected to infuse the Saudi sovereign wealth fund with billions of dollars to invest in technology companies and diversify the kingdom’s oil-dependent economy. Making matters even more complicated, PIF already has committed $65 billion to two outside funds—one for infrastructure investment managed by Blackstone Group LP and $45 billion for a technology fund led by SoftBank Group . It has also said it would develop new billion-dollar industries in tourism, entertainment and defense.

In other words, external Saudi Arabian sources of funding are rapidly drying out. First it was the $100 billion in proceeds that was expected to be the result of Aramco's IPO, and which money had been earmarked for the sovereign-wealth fund, but that process has since stalled in part because of the level of scrutiny a listing would have brought to Saudi Arabia’s state oil giant.

Now, the international bond market also appears to have been shut for Saudi Arabia, removing another $40 billion in "Plan B" proceeds.

If Riyadh indeed uses the leverage loan approach, its cash haul will likely be even smaller than that.

But the real question is: just what (audited) disclosure is Saudi Arabia so afraid of, and what does it mean for the financial well-being of the kingdom if it remains terrified to open its books to international investors even if it means losing out on billions in relatively easy proceeds, when it comes to the Saudi crown jewel - the Kingdom's vast - or perhaps not so vast - oil reserves?


Also

https://headtopics.com/us/aramco-abando ... al-2601234

Would YOU (anyone ?) invest money in a venture where the main reason for that investment,the asset that generates profit, is not disclosed ?

SA is in big trouble - population wise. You can't eat sand nor grow food in it. 33 million mouths to feed (and countless Camels !!).

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Tue 20 Nov 2018, 11:16:52

Would YOU (anyone ?) invest money in a venture where the main reason for that investment,the asset that generates profit, is not disclosed ?


maybe you should read something other than zerohedge. There has been numerous interviews with the oil minister as well as with the CEO of Aramco as well as comments from investment bankers that the intended reason for purchasing SABIC was to accomplish the goal ARAMCO has always stated as having...increase it's downstream component so that it becomes more like the integrated company it aspires to be which would be not so heavily weighted to the upstream component as they are now.
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Tue 20 Nov 2018, 12:36:21

There has [sic] been numerous interviews with the oil minister as well as with the CEO of Aramco as well as comments from investment bankers that the intended reason for purchasing SABIC was to accomplish the goal ARAMCO has always stated as having...increase it's downstream component so that it becomes more like the integrated company it aspires to be which would be not so heavily weighted to the upstream component as they are now.


Actually, the reason Aramco is planning to purchase SABIC is the same reason Aramco had for the doing the much-delayed IPO---the royal family wants money. When it became clear the IPO wasn't happening any time soon they switched to the plan to buy SABIC.

Crown Prince Muhammad wants ca. 70 billion dollars to fund his plan for modernization of KSA. The current plan is for the royal family to sell their holdings in SABIC to Aramco for ca. 70 billion......and then Crown Prince Muhammad will have his money.

But just the like IPO, the original SABIC plan has been derailed----Aramco just cancelled their plan to issue ca. 70 billion in bonds and then turn the cash over to Crown Prince Muhammad. No doubt they'll come up with some other plan to get the money, but for now Crown Prince Muhammad is busy dealing with internal and international revulsion over his ill advised schemes, including the recent torture and murder of US Citizen Kashoogi.

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Tue 20 Nov 2018, 14:28:43

Actually, the reason Aramco is planning to purchase SABIC is the same reason Aramco had for the doing the much-delayed IPO---the royal family wants money. When it became clear the IPO wasn't happening any time soon they switched to the plan to buy SABIC.


Not according to Aramco or many others:

From Amin Nasser Aramco CEO

Saudi Aramco’s planned acquisition of a majority stake in Sabic, the Saudi state-controlled chemicals and materials group, is central to its plans to diversify its revenues and prepare for tighter constraints on greenhouse gas emissions, its chief executive says.  Amin Nasser, who has been chief executive of the Saudi national energy company since 2015, told the Financial Times that talks were at an “early stage”, but that the Sabic deal would help accelerate Saudi Aramco’s plans to develop its chemicals operations.  “Sabic has a strong market position, [and is] vertically integrated: there’s a lot of synergy with Saudi Aramco,” Mr Nasser said. Though some senior executives at the group have questioned how it adds value, he said: “It’s a very strategically [good] fit with what we are aspiring to be, which is [to be] deeper in the downstream sector.”


This from Faisal Mrza at Arab News

In truth, Saudi Aramco is already working with SABIC on the fully integrated crude oil-to-chemicals (COTC) complex. Saudi Aramco wants to move away from being just an exporter of crude and to use its oil to create petrochemicals and fuel for export — to become an integrated energy company. Owning a major stake in SABIC would give Saudi Aramco a quick boost toward that goal.

At this time, whatever impact the sale of the SABIC assets will have on the Saudi PIF, there is no necessity in the transaction. Current oil prices are above $70 per barrel, which is helping to reduce the budget deficit, and the Kingdom is surging ahead with all planned upstream and downstream projects. In May, Moody’s reaffirmed the Kingdom’s A1 credit rating. The Saudi economy is stable and economic reforms are moving apace.
The PIF and Saudi Aramco are all wholly owned by the Kingdom. It is not logical that shifting liquidity between entities both belonging to the same owner should be interpreted as some sort of lifeline for the PIF.

This acquisition is an excellent tactical, developmental approach for the following reasons:
1) Saudi Aramco has a plan for continued growth in refining and petrochemicals capacities, which represents a pivotal role for non-oil revenues, essential for a diversified and sustainable economic future.
2) Integrated refining and petrochemical projects provide greater opportunities for enhancement of hydrocarbon streams and improved profitability.
3) Saudi Aramco’s acquisition of stakes in petrochemical plants is part of its ambitious strategic plan to become a leading global integrated energy and chemical company, which will boost non-oil revenues, the hub of the Kingdom’s Vision 2030.
4) The growing petrochemical sector in the Kingdom provides many direct and indirect jobs. The refining and petrochemical sector is one of the largest non-governmental sectors that have the highest percentage of Saudi employees.


According to a couple of reporters Aramco is now considering funding the SABIC deal via a leveraged buyout. They also mentioned Aramco sees the current market conditions as particularly bad timing to try to issue corporate bonds.
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Re: Saudi Aramco IPO

Unread postby pstarr » Tue 20 Nov 2018, 15:18:44

"leveraged buyout" huh?

They really are broke :?
SA has peaked. OPEC has peaked. So goes the world.
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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Tue 20 Nov 2018, 17:14:37

"leveraged buyout" huh?

They really are broke :?


do you actually understand what it is or how it works? Apparently not with a comment like that.
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Tue 20 Nov 2018, 17:29:21

Saudi Aramco couldn't get the IPO done so they delayed the IPO and shifted to buying SABIC.

Now they can't get bonds issued to buy SABIC, so they are delaying the SABIC purchase which is delaying the IPO still further.

On top of that Prince Muhammad has shown he is a murderous thug...definitely not the ideal person to be doing business with.

For three years now we've seen failure after failure on multiple plans to advance the IPO. Now we've got another ooopsies! and another change of plan from ARAMCO. Its enough to make a rational person skeptical about the whole IPO deal

saudi-aramco-sabic-deal-more-fodder-for-ipo-skepticism

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Re: Saudi Aramco IPO

Unread postby GASMON » Tue 20 Nov 2018, 18:11:46

So what is going on ?

https://www.bloomberg.com/opinion/artic ... skepticism

ARAMCO is 100% owned by the Saudi GOVERNMENT
SABIC - 70% of SABIC's shares are owned by the Public Investment Fund of Saudi Arabia.
The Public Investment Fund is a sovereign wealth fund owned by Saudi Arabia, founded for the purpose of investing funds on behalf of the Government of Saudi Arabia.

The sheikhs already own nearly all of it - so they wish to buy the 30% of SABIC with other peoples money ?

"My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel

Only question you need to ask is - ONE HUMP OR TWO !!!!!!!!!!!

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Wed 09 Jan 2019, 21:45:27

https://www.cnbc.com/2019/01/09/saudi-arabias-massive-oil-reserves-grow-by-2point2-billion-barrels.html

Saudi Arabia's massive oil and gas reserves are even bigger than previously reported, according to an outside assessment commissioned by the kingdom.
The independent audit not only revised Saudi reserves higher, but may help put to rest skepticism over the nation's oil and gas wealth, which has persisted in some corners of the market for years. It also shows national oil giant Saudi Aramco is taking strides towards transparency as it continues to consider a stock market debut.


State-controlled Aramco had 263.1 billion barrels of oil waiting to be tapped at the end of 2017, according to Dallas-based petroleum consulting firm DeGolyer and MacNaughton. That is 2.2 billion barrels more than Aramco reported in its last annual review.
Aramco's natural gas reserves total 319.5 trillion cubic feet, according to the audit. The company, which is not a major player in the gas market, previously reported 302.3 trillion cubic feet of gas reserves.
Saudi Arabia has additional reserves in an area along the border with Kuwait that has sat idle due to a dispute between the neighbors. Including this so-called Neutral Zone, Saudi oil reserves total 268.5 billion barrels, DeGolyer and MacNaughton concluded. That compares with an earlier estimate of 266.3 billion barrels.
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Re: Saudi Aramco IPO

Unread postby Outcast_Searcher » Thu 10 Jan 2019, 00:44:30

rockdoc123 wrote:https://www.cnbc.com/2019/01/09/saudi-arabias-massive-oil-reserves-grow-by-2point2-billion-barrels.html

Saudi Arabia's massive oil and gas reserves are even bigger than previously reported, according to an outside assessment commissioned by the kingdom.

But none of it can be affordably lifted according to the ETPers.

But it's all a lie and the KSA will run out "real soon now" according to quite a few peakers.

But but but anyone who claims resources are increasing is just a corny and completely delusional according to various fast crash doomers.

Those annoying measurements that don't conform to rapid doom. It MUST all be a conspiracy (or several). :roll:
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Thu 10 Jan 2019, 08:30:12

What interests me is that the Reserves noted by D&M will likely be Proven Reserves as that is what gets normally reported. I wonder what is left of Probable and Possible Reserves. My guess is after all the mega projects most of the Possible have been converted so it should be largely only Probable left. At one time SA was reporting fairly large 2P but a lot of that will have been converted to P1 by now. Maybe there is some left, maybe not. Time will tell. But at least the D&M statement gets past the "Saudis are lying about their reserves" mantra that Pstarr and others have been spewing for the last decade or so.
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Re: Saudi Aramco IPO

Unread postby Cog » Thu 10 Jan 2019, 09:36:44

If those are proven and economically recoverable reserves, then at current rates of production, then SA has oil for the next 80 years.
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Re: Saudi Aramco IPO

Unread postby StarvingLion » Fri 11 Jan 2019, 21:16:22

Aramco IPO means the End of Aramco and the runaway Saudi Welfare State.

Saudi cannot finance oil expansion because decline rates at NorthCentral Ghawar will increase massively long before the new infrastructure is in place.

They are can kicking awaiting Ghawarian 2022 decline increase ....a steel bolt to the temple.

And then its Venezuela time.
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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Sat 12 Jan 2019, 00:47:25

Saudi cannot finance oil expansion because decline rates at NorthCentral Ghawar will increase massively long before the new infrastructure is in place.


what new infrastructure, the mega projects were completed eight years ago, the infrastructure is all there and it is termed spare capacity now.
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