The long-planned initial public offering of a sliver of Saudi Arabia’s state-run oil giant Saudi Aramco will see shares traded on Riyadh’s stock exchange in December, a Saudi-owned satellite news channel has reported.
The report by Dubai-based Al-Arabiya offered a crackle of life to the Future Investment Initiative in the kingdom’s capital, an event created by Saudi Crown Prince Mohammed bin Salman.
Prince Mohammed hopes for an optimistic 2 trillion dollar (£1.5 trillion) valuation for Aramco, which produces 10 million barrels of crude oil a day and provides 10% of global demand.
That would raise 100 billion dollars (£78 billion) he needs for ambitious redevelopment plans for Saudi Arabia.
— Aramco (@Aramco) October 29, 2019
However, economic worries, the trade war between China and the US and increased crude oil production by the US has depressed energy prices. A September 14 attack on the heart of Aramco had already spooked some investors, with one ratings company downgrading the oil giant.
Meanwhile, questions persist over how the initial public offering will be handled even as Saudi Aramco offers sweeteners and promises of an estimated 75 billion dollar (£58 billion) dividend next year.
The report by Al-Arabiya did not elaborate and cited anonymous sources for the information, but the channel often breaks news before even the kingdom’s state-run media and is widely believed to have a direct line to the Al Saud royal family.
The station’s English arm offered more details, saying a final price for the stock will be set on December 4, with shares then beginning to be traded on the Riyadh-based Tadawul stock market on December 11.
It added that the Saudi Capital Markets Authority will make a formal announcement about the IPO plans on Sunday. Pricing will begin on November 17, it said.
Saudi state media and government officials did not immediately acknowledge the report. There have been other delays in the IPO, which has analysts still sceptical.
There have also been decisions seemingly forced on to Aramco recently, including the nearly 70 billion dollars (£54 billion) purchase in March of the petrochemical firm Saudi Basic Industries just before it announced a plunge in its quarterly profits.
That has seen a change in the long-standing perception that a “strong Saudi Aramco is a strong Saudi Arabia” to viewing the company as a “great source of capital”, said Ellen R Wald, an Aramco expert who wrote the recent book on the firm called Saudi, Inc.