Amin Nasser, chief executive officer (CEO) of Saudi Aramco, announced that the company is ready for an initial public offering (IPO) on Saudi Arabia's stock exchange and that this will happen "very soon".
Speaking to reporters at an energy conference in Abu Dhabi, United Arab Emirates, Nasser declined to discuss how much of the state-owned Saudi Aramco will be offered at an IPO on the Tadawul exchange, he said "Aramco is ready for listing, whenever the shareholders make the decision to list, and as you heard from his royal highness Prince Abdulaziz yesterday, it's going to be very soon, so we are prepared." He emphasized "That's the bottom line."
In 2016, Crown Prince Mohammed bin Salman initially announced that the company is planning for an IPO, in which up to 5% of the company will be sold on the Tadawul exchange. However, the timing of the IPO has been delayed by the government several times, including recently to give way to a deal that enables Aramco to acquire an almost $70 billion stake in Saudi petrochemicals firm SABIC.
While the crown prince valued Aramco at $2 trillion, analysts estimate it at approximately $1.5 trillion. Nevertheless, a partial Aramco IPO even at the lower end could possibly become the largest IPO in the world.
The possible listing is part of the crown prince's diversification initiatives for the kingdom's oil-driven economy as oil trades at about $60, which is below the $80-$85 range needed to cover government expenditures. Prince Mohammad plans to divert funds from Aramco into the sovereign wealth fund to use in supporting large-scale local development projects that can provide millions of job opportunities for young Saudis.
Aramco has recently removed former energy minister Khalid al-Falih as board chairman. He will be replaced by Yasir al-Rumayyan who heads the sovereign wealth fund and is a close adviser of the crown prince to demonstrate that Aramco can make its own business decisions as a company. However, Nassir emphasized that the energy ministry will still determine production guidelines.
