The public listing of Saudi Arabia's state-owned oil company has been highly anticipated by the market, but analysts say investors should consider the influence the kingdom has on the company.
"The biggest problem with Aramco is that everything about this company is controlled by the Saudi royal family – shareholder statements, your board votes, and none of that makes any difference," said Pavel Molchanov, director and energy analyst at Raymond James.
Aramco said in an email that it will answer CNBC's questions about governance issues at the "earliest opportunity."
Saudi Aramco, the world's largest oil company, announced on Saturday that up to 0.5% of the shares will be allocated to individual investors in the first public offering. The exchange is set for December on Saudi Arabia's Tadawul exchange.
The 658-page preliminary prospectus disclosed operational information about Saudi Aramco, but did not list a possible price range for the shares or give a clear idea of how many shares will be offered.
Analysts' valuations of the company range widely, from $ 1
Even within the lower range of that valuation, Aramco could become the largest stock list in history and surpass the Chinese e-commerce giant Alibaba & # 39; s $ 25 billion move in 2014, which still stands as the largest IPO ever.
But according to Molchanov, the IPO may be "too small to really be interesting" for many asset managers.
"The government will do what it wants, whether it is to increase production, reduce production, invest in one geography versus another," he told CNBC on Monday. "They simply won't care what their private shareholders want to see."
Investors will have to consider the "political influence" of the kingdom, said Daniel Gerard, senior global strategy for multiple assets in State Street.
"There's a lot to think about when you buy Aramco," he told CNBC last week, adding that an important issue is "how much political influence it will have on investment decisions."
"Saudi Arabia is still probably the largest party capable of influencing the oil markets as a unit," Gerard said.
"Although the United States with shale oil is a major producer, it is not a unit that makes a decision," he added.