Saudi Aramco IPO prospectus issued

Signage of Saudi Aramco's original offer (IPO) seen during a news conference by the state oil company at the Plaza Conference Center in Dhahran, Saudi Arabia, November 3, 2019.

Hamad Mohammed | Reuters

Saudi Aramco will sell up to 0.5% of its shares to individual investors in what may be the largest listed offering in history.

The process begins on November 17 and ends on December 4, the company said in its IPO prospectus on Saturday.

The Saudi government will face a six-month guarantee period on further sale of shares following Aramco's public offering. The stock exchange is subscribed by JP Morgan, Goldman Sachs, Citigroup and Morgan Stanley, among others.

The world's largest oil producer announced last Sunday that it plans to float its shares on the Saudi stock exchange ̵[ads1]1; known as the Tadawul – in December.

Analysts' valuations of the company have ranged from $ 1.2 trillion to $ 2.3 trillion. By comparison, Aramco's US rival, Exxon Mobil, has a market share of nearly $ 300 billion and Chevron is valued at around $ 229 billion.

The long-awaited IPO was first flagged in 2016 by the government of Saudi Arabia, and has encountered several delays, reportedly in the middle of the economy, to be publicly investigated. Drone attacks on its key oil facilities in September also raised concerns about security and threatened to jeopardize the planned listing.

Aramco warned that terrorism and armed conflict could have a significant impact on the market price of the shares.

Aramco President and CEO Amin Nasser told CNBC last week that the company's public debut will help diversify the kingdom's economy. The move could also strengthen Saudi Arabia's stock exchange by attracting domestic and international investment.

There have been reports Aramco may make a double listing. Chairman Yasir al-Rumayyan said at the press conference last week that the international listing would be decided "forward."

Some predicted that between 1% to 2% of the company will be listed domestically, and another part listed on a major international stock exchange later. Stock exchanges from New York, London, Hong Kong and Tokyo have all raced for Aramco's international debut.

The public listing of Aramco – officially known as the Saudi Arabian oil company – is part of "Saudi Vision 2030," an economic reform plan spearheaded by Crown Prince Mohammed bin Salman.

The young ruler has ambitious plans to steer the kingdom's economy away from his great reliance on oil, and to develop non-oil sectors such as tourism, health care and mining.

Saudi Arabia has huge oil reserves of more than 260 billion barrels. The Kingdom is one of the largest petroleum producers and exporters globally, owning around 18% of the world's proven petroleum reserves. The oil and gas sector accounts for half of the country's gross domestic product and around 70% of export revenues.

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