Saudi Aramco prepares for IPO

Mohammed bin Salman expects the value of Saudi Arabian Oil to exceed $2 trillion

Deputy Crown Prince Mohammed bin Salman, in Riyadh, where he announced his “Saudi 2030 Vision” plan. Photograph: Fayez Nureldine/AFP/Getty Images

Deputy Crown Prince Mohammed bin Salman, in Riyadh, where he announced his “Saudi 2030 Vision” plan. Photograph: Fayez Nureldine/AFP/Getty Images

 

Saudi Arabia’s deputy crown prince Mohammed bin Salman said he expects the value of Saudi Arabian Oil Co to exceed $2 trillion (€1.77 trillion) as the kingdom prepares to sell part of the company in what could be the world’s largest initial public offering.

The valuation of the oil producer known as Saudi Aramco hasn’t been completed, Prince Mohammed said in an interview with Saudi-owned Al Arabiya television.

The government plans to turn Aramco into a holding company and will sell less than 5 per cent of that entity, he said. Aramco units may be offered for sale at a second stage, he said.

Prince Mohammed is leading the biggest economic shake-up since the founding of Saudi Arabia in 1932, with measures that represent a radical shift for a country built on petrodollars.

Saudi Aramco’s sale is a key part of the Saudi 2030 Vision announced yesterday to overhaul the economy and reduce the kingdom’s reliance on oil, he said. It will help increase transparency, he added.

“If Saudi Aramco is listed then it must announce its statements and it will do that every quarter,” he said. “It will be under the supervision of all Saudi banks, all analysts, all Saudi thinkers. Even more all international banks and research and planning centers in the world will monitor it intensively.”

Aramco’s crude reserves of about 260 billion barrels are almost 10 times those of Exxon. Its daily production of more than 10 million barrels is more than the domestic output of every US oil company combined.

“In 2020, I think we will be able to live without oil,” Prince Mohammed said. “We will need it but we can live without it.”

The country has 6 per cent of global uranium reserves, which is “another oil that we have not exploited,” he said. Saudi Arabia uses only 3 to 5 per cent of its mining resources such as gold, silver and phosphate, he said. – (Bloomberg)