UAE- Oil giant Saudi Aramco confirms studying IPO

Date

1/9/2016 6:37:05 PM

(MENAFN- Khaleej Times)

State-owned Saudi Aramco the world's largest crude oil producer and exporter said on Friday it is considering a public share offer.

The company "has been studying various options to allow broad public participation in its equity" a statement said.

This would be through the listing on capital markets "of an appropriate percentage of the company's shares and/or the listing of a bundle (of) its downstream subsidiaries" it said. "This proposal is consistent with the broad and progressive direction pursued by the kingdom for reforms including privatisation in various sectors of the Saudi economy and deregulation of markets which the company strongly supports" it added.

The statement comes a day after The Economist published an interview with Prince Mohammed bin Salman bin Abdulaziz Deputy Crown Prince Second Deputy Premier and Minister of Defence of Saudi Arabia who said a share offer was under review.

Saudi Aramco said that after studying the options the findings will be presented to the board of directors which will make recommendations to the company's Supreme Council.

The council is chaired by Prince Mohammed and has overseen Saudi Aramco since it was separated from the oil ministry last year.

In his interview Mohammed said a share offer "is something that is being reviewed and we believe a decision will be made over the next few months".

Mohammed said he was personally enthusiastic about the step which would be in the interests of the market the company and greater transparency.

Analysts expected the kingdom would make only a small stake available to the public. Abhishek Deshpande an analyst at Natixis said talk of an IPO shows the kingdom's determination to address the economic consequences of low oil prices.

"It could be a very big step forward and also means oil prices will stay low for a while" Deshpande said. Other analysts agreed there would be limited or no effect on the oil market itself.

The kingdom has adopted a policy of selling shares in all major state-owned firms. Saudi Arabia's stock exchange for the first time last year allowed foreign banks brokerage houses fund managers and insurance companies to invest directly on the Tadawul All-Shares Index provided they meet the requirements. - AFP

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