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Countering recent media reports that Aramco will shelve its international listing and instead focus just on local exchange Tadawul, Saudi Arabia’s Finance Minister Mohammed al-Jadaan told Bloomberg in an interview that the international listing is still on the table —and London, New York, and Hong Kong are still being considered as potential venues for the deal.
Asked by Bloomberg’s Vivian Nereim whether this year’s oil price recovery could slow down fiscal reform in the Kingdom, Al-Jadaan said he did not think fiscal reforms were connected to oil prices. “Fiscal reform,” he said, “is part of the whole reform we are engaging in.”
The minister noted that the government implemented an energy price reform despite higher prices and that Riyadh was committed to the sweeping reforms spearheaded by Crown Prince Mohammed bin Salman wherever oil prices went.
Aramco’s listing, publicized as the biggest initial public offering in history, has been fraught with doubts and delays. Initially scheduled for the second half of this year, the Tadawul listing was postponed for 2019 as it emerged the company’s preparatory activities are taking longer than originally planned.
The international leg of the IPO has also been problematic: London and New York are both seen by analysts as too strict in terms of disclosure requirements, not to mention the litigation risks inherent in a New York listing, pointed out by Energy Minister Khalid al-Falih.
Crown Prince Mohammed himself is said to favor a listing in New York, which might put him at odds with other government officials who believe that would be risky, further complicating the final decision.
Recently it has also emerged that some investors, at least in the United States, may be wary of buying into the world’s largest oil company in terms of reserves. As Bloomberg’s Javier Blas reported last week, a roadshow of the IPO among a group of the largest mutual funds and hedge funds in America by Aramco executives had met with lukewarm enthusiasm.
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.