Saudi Arabia is considering offering shares in the largest oil company in the word Saudi Aramco in an initial public offering (IPO) which may mean that assets of about 3.63 trillion US dollars will be accessible to citizens and investors.
Saudi Aramco yesterday confirmed that it had been considering various options to provide the opportunity to a large segment of investors via an IPO in the finance market. The company said in a statement that it is studying two scenarios to present its shares for an IPO; the first is to sell an appropriate share of its assets directly, and the second is to offer a package of major projects for the IPO in several sectors, particularly the refining and chemicals sector.
The Saudi Deputy Crown Prince Mohammed bin Salman who is also Chairman of the Supreme Council of Saudi Aramco said in an interview with The Economist on Thursday in response to a question about the possibility of selling shares in Aramco that “this idea is under review, and we believe we will reach a decision on this matter in the next few months”.
Prince Mohammed bin Salman added that he was “enthusiastic” about this step and that it will help to create greater transparency and fight any kind of corruption that may be present in Aramco”.
In the event that the Saudi government went ahead with offering Aramco’s shares to an IPO, it would be the largest public offering in the history of global capital markets and would exceed the largest IPO to date- that of the Chinese company Ali Baba and the American company ExxonMobil which is considered to be the largest oil company in the world in terms of current market value after the fall in oil prices and that is estimated at 330 billion dollars.
In addition to this, oil sources say that Aramco could sell about 5% of its assets which amounts to about 181.5 billion dollars in the stock market.