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Aramco has reportedly started the preparation process for the international leg of its listing, which most expected to be years away. According to unnamed sources that spoke to Bloomberg, the timeline has been shortened.
However, the sources added the international listing is unlikely to take place this year because of the price outlook for oil and the unfavorable market conditions overall.
The Aramco listing became something of a legend with the odds of it happening ever shifting constantly as oil prices moved up and down and demand and supply outlooks got revised time and again.
The international leg of the listing, always part of original plans, was a challenge, too, because the venues considered for this leg were very few and each had problems attached to it: litigation dangers in New York after the 9/11 legislation allowing the U.S. to sue Saudi nationals for their role in the attacks, legislative and industry opposition in London, and the “not New York or London” factor in Hong Kong and Tokyo.
Finally, Aramco listed at home last December, after the Saudi government spent $2.3 billion on preparing the deal, which lived up to expectations of being the largest IPO in history, valuing the Saudi energy giant at $1.7 trillion, just $300 billion shy of the $2-trillion valuation Crown Prince Mohammed was after.
However, the domestic listing of the company attracted overwhelmingly local investors, both institutional and retail, and, according to reports at the time, some of these were effectively bullied into buying Aramco shares. This made analysts even more doubtful about Aramco’s chances in an international venue, but the plans are still there. If the Bloomberg sources are to be believed, the process has been set in motion, which means we will be hearing more about the Aramco IPO in the coming months.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
The domestic IPO of Saudi Aramco went ahead with wealthy Saudis reportedly being coerced to buy Aramco shares. No one can coerce foreign investors.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London