Published 23:00 IST, November 3rd 2019
Saudi Arabia to formally start IPO of oil firm Saudi Aramco
Oil giant Saudi Aramco has confirmed it is planning to list on the Riyadh stock exchange, in what could be the world's biggest initial public offering (IPO)
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The state-owned oil refinery will regulate the IPO launch price after registering interest from investors. The business sources said that the Saudis are estimated to make shares available for 1% or 2% of the firm, and the offer will be for existing company shares. Saudi Aramco is known to be the world's most profitable companies with its worth accounting to over $1.2tn (£927bn).
Aramco is the world's biggest IPO
The company said that it has no current plans for a foreign share listing. It stated that the long-discussed plans for a two-staged initial public offering (IPO) including an offering on a foreign exchange had been put aside for now. A chief market analyst said that investing in Aramco carries high risks. He said political and strategic risks are high for any firm operating in the region.
The potential risks were highlighted in September when drone attacks hit the Abqaiq oil facility and the Khurais oil field in Saudi Arabia, both owned by Aramco.
Saudi Arabia has second-biggest oil reserves after Venezuela
But the boss of Aramco Amin Nasser said that that the firm was still the most reliable oil company globally. He said that the company will not be impacted by these attacks. Saudi Aramco was established in 1933 when a deal was struck between Saudi Arabia and the Standard Oil Company of California. Between 1973 and 1980, Saudi Arabia bought the whole company. Saudi Arabia has the second-biggest oil reserves after Venezuela, according to the reports. It is also second in production after the US. But it gets its prominence because it has a monopoly on all that oil in the country, and it is very cheap to extract. Saudi Aramco is worth $1.2tn according to an analysis.
19:07 IST, November 3rd 2019