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01 March 2020

Saudi Aramco prepares for international listing to accelerate economic plans

Saudi Aramco has already begun discussions with Wall Street banks to draw up scenarios for a second listing overseas

Other oil and gas producers in the Middle East are also opening up their operations to outside investors/Bloomberg

by Bloomberg

The Chairman of Saudi Aramco said that Saudi Arabia is considering selling more stakes in the state-owned oil producer as it looks to raise money to fuel an economic diversification plan.

Yasir Al-Rumayyan, the Chairman of Saudi Aramco, said that the Kingdom, which raised nearly $30 billion last year from Saudi Aramco’s initial public offering (IPO) in Riyadh, is planning to sell more of its stake in the world’s biggest oil producer.

Potential future share sales could be held outside Saudi Arabia, said Al-Rumayyan.

Any international offering of Saudi Aramco shares would face significant hurdles. Last year’s IPO in Riyadh was already widely marketed to the world’s largest investors, many of whom passed on the deal because other oil stocks offered better returns. Investors may also question the state-owned oil producer’s current valuation at a time when crude prices are slumping.

“If we have any good stock exchange that we think can bring some valuable investors to us, we will definitely consider it,” said Al-Rumayyan.

The oil producer plans to be ready to move if Crown Prince Mohammed bin Salman, gives the go-ahead to proceed with the plans.

“We only offered two per cent of the company, so there is still 98 per cent of the company owned by the shareholder, which is the government of Saudi Arabia and our programme is to have a multiple number of listings over the years,” added Al-Rumayyan.

Proceeds from Saudi Aramco share sales will be transferred to the Public Investment Fund (PIF) and used for international deals and domestic diversification projects. In addition to his other responsibilities, Al-Rumayyan is the Governor of PIF and was appointed Chairman of the IPO Committee for Saudi Aramco in 2019.

Al-Rumayyan said that Saudi Aramco has a lot of assets that could be monetized because they are non-core assets, which can improve the performance of the company, without giving further details.

Other oil and gas producers in the Middle East are also opening up their operations to outside investors to attract fresh capital and diversify their economies. Abu Dhabi National Oil Company has raised billions of dollars by bringing in partners for businesses including its refining unit and drilling business. The Abu Dhabi oil producer in the process of selling a stake in its natural gas pipelines unit.

RELATED STORIES: Saudi Aramco Public Investment Fund Abu Dhabi National Oil Company Crown Prince Mohammed bin Salman





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