DHAHRAN – Saudi Arabia officially launched the initial public offering (IPO) for state oil company Saudi Aramco on Sunday, announcing that a domestic listing will take place in December.
The Kingdom market regulator approved the listing early Sunday but exact details about the size and scope of the IPO remain unknown. In a statement from Saudi Aramco, the company said that "the final offer price, the number of shares to be sold and the percentage of shares to be sold will be determined at the end of the book-building period."
Amin Nasser, President and CEO of Saudi Aramco, said in a statement that the company's vision "is to be the world's leading integrated energy and chemical company."
"Our mission is to provide our shareholders with long-term value creation through crude oil price cycles by maintaining our prominent role in oil and gas production, capturing added value across the hydrocarbon value chain and profitable expansion of our portfolio," he said.
In a follow-up press conference on Sunday, Nasser said the company's IPO prospectus would be released on November 9, telling CNBC that the listing of Aramco would help diversify the economy, and was a way to strengthen the domestic Tadawul stock exchange by attracting both domestic and international investment. [1
Also at the press conference, Aramco's chairman Yasser al-Rumayyan said that the international listing would be decided "going forward." He also said he could not comment on the valuation of the company, or the percentage to be displayed.
He told CNBC that the company was a safe bet for investors despite some concerns about the security of Saudi oil infrastructure following a drone and missile attack on Aramco facilities in September.
"We also have the resilience of the company, and it was really demonstrated in the attacks of September 14 … We have one-eighth of oil production in the world, and the oil traders, they saw this as a one-time event, which means it's very That's what the money says. So security, I think the whole world is not just Saudi Arabia, will safeguard the security of this region and this company, "he said.
Previous reports have suggested that the Kingdom will list 1% to 2% of Aramco on its local stock exchange, and then notes another slice on an international stock exchange at a later date – with a total public sale of about 5% of the company . The stock exchanges in New York, London, Hong Kong and Tokyo have all fought for the international listing.
Saudi Aramco is the world's largest integrated oil and gas company. The company has been valued at around $ 2 trillion by Saudi Crown Prince Mohammed bin Salman, but Reuters quotes bankers and business insiders as saying the value is closer to $ 1.5 trillion.
Saudi Aramco's stock exchange listing has been carefully anticipated in recent years, but has been delayed amid oil price volatility, world uncertainty, the listing of stocks and geopolitical events such as the drone and missile attacks in September. The stock exchange may be the world's largest, and if it achieves a valuation of $ 1.5 trillion, Saudi Aramco will far surpass the market capitalization of market giants such as Apple and Microsoft.
The public listing is seen as part of the Crown Prince's economic reform plan, known as Vision 2030.
The company said that one of its priorities was to deliver "sustainable and growing dividends through crude oil price cycles"; Aramco said Sunday that "subject to the Board's discretion after considering a number of factors, the Board intends to declare a total ordinary cash dividend of at least $ 75.0 billion for the calendar year 2020, in addition to any special dividend."  Last week, Reuters reported that the company would begin trading on Tadawul on December 11. Citing anonymous sources, Al Arabiya said the pricing will start on November 17 with a final price for the float expected to be announced December 4.
Aramco noted on Sunday that crude oil production accounted for approximately one in every eight barrels of crude oil produced globally from 2016 to 2018. During the first six months of 2019, the company produced 13.2 million barrels per day of oil equivalent, including 10.0 million barrels per day of crude oil (including mixed condensate).