Saudi Aramco’s initial public offering (IPO) will take place, but probably in 2021, depending on market conditions and only after the acquisition of a majority stake in petrochemicals company Sabic is complete, Aramco’s chief executive Amin Nasser said on Monday.
Saudi Arabia’s government is currently "suggesting 2021 for IPO listing, depending on market conditions at that time," S&P Global Platts quoted Nasser as saying at the ADIPEC conference in Abu Dhabi.
Saudi Aramco—whose IPO was indefinitely postponed in the summer—plans to buy the 70 percent in Sabic currently in the hands of the Public Investment Fund (PIF) of Saudi Arabia in a deal expected to be worth US$70 billion.
The much-awaited and several-times-postponed listing of Saudi Arabia’s oil giant Aramco is now on the backburner for the Saudi government, which has shifted its focus on the acquisition of the stake in Sabic.
The listing of Aramco has encountered multiple potential problems, including the lofty US$2-trillion valuation that the Saudis were hoping for, the estimate of Saudi Arabia’s oil reserves that is shrouded in secrecy, and the international venue for the IPO.
Aramco’s listing plans quickly slipped from ‘definitely by the end of 2018’ early this year to 'indefinitely postponed' this summer.
"[The Sabic deal] needs to be completed first before you can list Saudi Aramco, and that will take some time," Platts quoted Nasser as saying at ADIPEC today.
"Then you need to reflect that in your balance sheet for at least a year before you can list Saudi Aramco. And this is where they are talking about 2021 and depending on the market conditions at that time the government will list it," Aramco’s chief executive said.
Last month, Saudi Arabia’s Energy Minister Khalid al-Falih told Russian news agency TASS in an interview that the Sabic deal would take at least 18 months to close, including receiving regulatory approvals from anti-competition authorities worldwide.
"Only after that we could share the information about the financial benefits of the deal with the investors. We are looking at 2021 as potentially the year of IPO. If all goes well, IPO will be more successful in 2021 compared to 2018," al-Falih told TASS in October.
By Tsvetana Paraskova for Oilprice.com
