Saudi Aramco: World’s most valuable company to go public
Saudi Aramco, the state-owned oil company of the Kingdom of Saudi Arabia, has emerged as the biggest thing in the history of crude oil manufacturing. The company is reportedly said to produce 9.54 million barrels of oil a day and its total reserves add up to an unbelievable 265 billion barrels -10 times more than Exxon Mobil which is currently valued at $321.5 billion.
The market is aflutter with the news of this Saudi monster going public. Though the discussions are at the inception stage, it has been recently confirmed in a statement issued by the kingdom's prince, Muhammad bin Salman. Bloomberg represents that the crown prince told The Economist "This is something that is being reviewed, and we believe a decision will be made over the next few months." He also said that they were pretty enthusiastic about the offering, which would mean better transparency for the company.
So how is it that we had not heard much about this establishment when it is evidently bigger than Apple and Walmart put together? It seems like the oil giant likes to keep its revenue details under the wraps. As per Fortune, the company is now believed to be the 'world's most valuable company' and currently worth 'trillions of dollars'. And so it should be, when its oil reserves are said to be enough to meet the world's demand for the next eight years.
This explains the excitement of the investors once the news of the potential IPO was released. However, speculations are on regarding how much of their shares the kingdom would be ready to float in the market. The Saudi government would definitely want to retain their hold over the world's biggest oil producer and may start off with a mere 5% of total ownership and eventually float a bigger share.
NDTV reports the company is possibly contemplating a dual listing: one in Riyadh and one in either London or New York, as the entire Saudi exchange totals only $400 billion.
This is easily the biggest IPO in the history and comes at a time when oil prices have hit their all-time low, dropping below $35 a barrel. Following a budget deficit of around 15% of its GDP, Saudi's economy would definitely get a leg-up with this move. Modernization, privatization and deregulations of the kingdom's facilities are apparently on the cards.
It now remains to be seen when the company comes out with the much-awaited details.