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Saudi Aramco IPO

Discussions about the economic and financial ramifications of PEAK OIL

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.....
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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
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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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 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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Re: THE Saudi Arabian Oil Co. (ARAMCO) pt 3

Unread postby Peak_Yeast » Thu 18 Jan 2018, 20:01:55

@Rockdoc: Where do you see your profit coming from when purchasing these shares?
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Re: THE Saudi Arabian Oil Co. (ARAMCO) pt 3

Unread postby rockdoc123 » Thu 18 Jan 2018, 20:43:12

@Rockdoc: Where do you see your profit coming from when purchasing these shares?


You would be buying it believing at some point the share price would rise due to a host of possibilities, higher prices, improved recoveries, continued demonstration of replacement of proved producing reserves. As well at some point they might offer up more shares on the market which you would hope the new higher price would increase share demand better than any dilution. The possibility that they would offer a dividend (which other companies that could be peers do..eg Exxon Mobil or Shell) at some point would be quite attractive.
Unlike IPOs in the tech industry where it is often hard to get your arms around the value of what they are selling is once you are sure what Aramco's reserves are and their free cash flow valuation is much easier.
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In Search Of Investors, Saudi Arabia’s Crown Prince Is Comin

Unread postby AdamB » Tue 27 Feb 2018, 22:16:30

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


In Search Of Investors, Saudi Arabia’s Crown Prince Is Coming To America
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Saudi Aramco CEO Promises IPO And No End To The Age Of Oil

Unread postby AdamB » Wed 07 Mar 2018, 13:46:15


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 Aramco CEO Promises IPO And No End To The Age Of Oil
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Saudi Aramco IPO

Unread postby Cog » Wed 07 Mar 2018, 15:40:25

I'll be staking a position in the Saudi IPO when it comes about. Not a huge one but sizable. People seem to forget that Saudi Arabia spokesmen can control rises and falls in this new stock offering at a whim. I intend to take advantage of that.
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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Wed 07 Mar 2018, 17:06:54

I too will be looking to buy some Aramco. I do believe, however, that the IPO will be fully subscribed by insiders so when it breaks on the market it will run higher so fast that the chances of getting a good price are seriously diminished. What usually happens is the initial enthusiasm lasts for a day or two and then the stock drops back to the IPO price or close to it. That is what I'm looking for and will buy in then.
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Saudi Oil Minister Says Aramco IPO Could Be Delayed to 2019

Unread postby AdamB » Thu 08 Mar 2018, 17:08:41


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


Saudi Oil Minister Says Aramco IPO Could Be Delayed to 2019
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Saudi Aramco IPO

Unread postby ROCKMAN » Thu 15 Mar 2018, 21:18:30

Finally some details to counter all the bullshit regarding the value of a potential Aramco IPO. Might be a tad difficult to follow if one isn't familiar with huge foreign stock transactions, From

https://www.rigzone.com/news/wire/canad ... 8-article/

Reuters - "Saudi Arabia is increasingly looking to just float oil giant Saudi Aramco locally as plans for an initial public offering (IPO) on an international exchange such as London or New York hang in the balance, sources close to the process said.The kingdom is counting on being awarded emerging market status by index complier MSCI in June to help Saudi Aramco attract Western funds, in addition to cornerstone investors from China, Japan and South Korea, the sources said. "I would guess it is about evens that there will be no international IPO," said a high-level source familiar with the preparations, saying they were proving to be a disappointment.

Saudi Arabia is planning to list up to 5 percent of Saudi Aramco in an initial public offering that could value it at up to $2 trillion and make it the world's biggest oil company by market capitalisation. Saudi Energy Minister Khalid al-Falih said last week that Aramco was too important to risk listing in the United States because of litigation concerns, such as existing lawsuits against rival oil companies for their role in climate change."

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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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Thu 15 Mar 2018, 22:11:17

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


In the end all the "saudi officals and advisors" have little to do with a decision. It will be made by the crown prince, if he wants a listing in the UK to happen it will, if he doesn't it won't. Personally, I think this is a lot of interviews with "insiders" who actually know zip about what is going on. There is no way the Saudis haven't understood the requirements for disclosure both in New York and London....it is the only reason they put together extensive audited financial accounts for Aramco and had GCA and D&M audit their reserves independently. If they were worried about disclosure then why would they have gone down that road in the first place? It's not like the listing rules are somehow secret or have changed recently.
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Re: Saudi Aramco IPO

Unread postby Cog » Fri 16 Mar 2018, 07:04:15

The crown prince is meeting with Trump shortly. I'm thinking the topic will come up.
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Re: Saudi Aramco IPO

Unread postby M_B_S » Sun 27 May 2018, 15:48:10

https://www.almasdarnews.com/article/ye ... commander/

Yemeni Army has database of ‘Saudi economic targets’ – commander
By News Desk - 27/05/2018

A major commander in the Yemeni Armed Forces was interviewed by the Tasnim News Agency on Sunday; he would discuss a number of topics, including the ongoing war and Saudi Arabia’s participation.

Colonel Aziz Rashid told Tasnim that his forces have an entire database of Saudi economic targets, which could come under attack at any moment from their missiles and unmanned aerial vehicles (UAV).....
*****************
To proof he is correct his missile force needs a >big hit< the whole world feels.

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KSA has peaked, cancels Aramco IPO

Unread postby Plantagenet » Thu 05 Jul 2018, 17:00:26

The WSJ is reporting that Saudi Arabia is not going to go through with its plan to sell shares in Aramco and its oil assets

doubts-grow-aramco-ipo-will-ever-happen-

The sale has already been postposed several times. The reason its looking like the whole things is going to be cancelled is that Saudi is unwilling to disclose information about the condition of their oil assets and oil reserves, apparently because they don't want the world to know how close to depletion Ghawar and their other legacy oil fields are in.

This is consistent with news reports that KSA is telling Trump its impossible for them to raise their production to bring down oil prices.

IF KSA production can't be raised any higher, then that is big red flag.

It suggests KSA has peaked

If KSA is now backing out of their planned IPO because they don't want show anyone else their books...

It suggests KSA oilfields are in trouble, and production is at or near the peak.

I repeat---its looks like this is it. It looks like KSA IS AT OR VERY NEAR ITS PEAK RIGHT NOW.

Cheers!
Last edited by Plantagenet on Thu 05 Jul 2018, 17:14:45, edited 1 time in total.
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Re: KSA has peaked, cancels Aramco IPO

Unread postby Pops » Thu 05 Jul 2018, 17:09:53

I think this is where I came in...
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
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