The Saudi Arabian Oil Company – known as Saudi Aramco - has been for 30 years a company that does not fall under the corporate system imposed by the Ministry of Commerce.
Saudi Aramco has enjoyed a special status since the transfer of its ownership to the State in 1988, as it was established by Royal Decree no. 8 of 4-4-1409 AH (1988).
Saudi Arabia announced on Friday the transformation of Saudi Aramco into a joint stock company, in the preparation process for a planned 2018 initial public offering, which is expected to be the largest ever.
Friday’s official announcement said the Kingdom had changed Saudi Aramco’s status to a joint-stock company as of January 1, in accordance with the company’s statute, which was announced on Thursday in Umm al-Qura newspaper, the State official gazette.
The company will be able to issue shares and be regulated like other companies.
The newspaper said Saudi Aramco’s “capital is 60 billion Saudi Riyals paid in full and divided into 200 billion ordinary shares with equal voting rights and without nominal value.”
Saudi Aramco would have a board of 11 members, with six nominated by the state. The government will have the right to appoint or change the company’s chairman, a post currently occupied by Energy Minister Khaled al-Falih.
The announcement in the Official Gazette also said that the government would remain the main shareholder in Aramco and retain the ultimate decision on output levels and production capacity.
“The state will remain the only responsible entity to make the final decisions regarding the maximum levels of hydrocarbons that can be produced at any time,” it said.
According to Saudi officials, domestic and international exchanges such as New York, London, Tokyo and Hong Kong have been looked at for a partial listing of the state-run oil firm.