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Saudi Arabia Is Considering a $10 Billion Aramco Share Sale

Saudi Arabia is working with advisers to revive a new sale of stock in oil giant Aramco on the domestic market and looks to raise at least $10 billion from the follow-up offering, anonymous sources with knowledge of the plans told Bloomberg on Wednesday.

Currently, Saudi Arabia owns just over 98% of Aramco after selling 1.7% in the initial public offering (IPO) in December 2019. Of the 98% held by the Kingdom, the Saudi government owns 90% of Aramco, while the sovereign wealth fund owns the other 8%.  

The Saudis initially aimed to list Aramco on the Saudi stock exchange, Tadawul, and on one major international market, with London, New York, Tokyo, and Hong Kong all rumored or reported to have been in the race.

But in the end, tepid investor demand and the possibility of exposing the Kingdom to lawsuits—especially with a New York listing—forced the rulers to downsize the Aramco IPO.

Saudi Aramco made its debut on the Saudi Stock Exchange in December 2019 and raised around $30 billion in the share listing which became the largest in history.

Since the IPO, Saudi rulers, including Crown Prince Mohammed bin Salman, have said on several occasions there would be more Aramco shale sales on Tadawul in the future.  

Saudi Arabia and its crown prince have planned massive investments in futuristic cities to attract tourists and talent in the digital economy and diversify away from its dependence on oil revenues.

The latest share sale plan now under consideration has the Saudis seeking to raise at least $10.7 billion (40 billion Saudi riyals) from the share sale, according to Bloomberg’s sources.  

Saudi Arabia hasn’t reached a final decision on the timing, and plans could still change and the stock offering could be delayed again, they say. 

On Tuesday, Saudi Aramco said it was ordered by the Kingdom’s leadership to stop work on expanding its maximum sustainable capacity to 13 million barrels per day, instead keeping it at 12 million bpd.

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By Tsvetana Paraskova for Oilprice.com

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