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Global Intelligence Report - 14th December 2018

Global Intelligence Report - 14th December 2018

Tensions within OPEC and the…

Conflicting News Spurs Doubt On Aramco IPO

London

Aramco has asked FTI Consulting to suspend investor relations work on its upcoming initial public offering, according to unnamed sources who spoke to Reuters. The sources did not elaborate on the reasons the Saudi state energy company made the move, but one of them said this could now extend the responsibilities of another advisory firm, Brunswick.

Aramco appointed FTI Consulting to advise it on the IPO in March this year and Brunswick joined it a couple of months later, to be in charge of external and media relations, while FTI was tasked with investor relations.

The news comes amid growing doubts about whether the IPO will take place as scheduled and whether it will involve an international listing. Yesterday, Saudi Energy Minister Khalid al-Falih told Bloomberg that the IPO preparations were going according to plan, and that the listing would take place in the second half of 2018 as scheduled. As for the international listing, Al-Falih said it will happen and that he will announce the venue “in due course”.

The reassurance comes after reports that Aramco was preparing contingency plans in case of a delay in the offering, which Saudi officials dismissed, and, more recently, a warning that Aramco may delay the international portion of the listing until 2019. The report came out as the UK FCA’s head admitted he had held talks with Aramco officials several months before the watchdog proposed changes in the listing rules to accommodate the Aramco listing. The proposal sparked outrage and a legislative probe.

The plot around the biggest IPO in history thickened further this week with a report that China’s PetroChina and Sinopec had offered Aramco to buy directly the 5 percent it plans to list. Unnamed sources told Reuters that the Chinese state companies were eager to secure future oil supplies and were even willing to buy more than 5 percent in Aramco. Khalid al-Falih, however, declined to respond to questions about this information.

By Irina Slav for Oilprice.com

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