One senior industry source, however, said New York is likely to be the favoured option for the Saudi government and Prince Mohammad. “That is broadly correct,” the source said, adding: “All awaits on the final shareholder decision.”

Apart from New York and London, Hong Kong is also a contender, sources say.

The flotation is expected to raise tens of billions of dollars which would be invested to help develop other Saudi industries.

The New York and London stock exchanges declined to comment. Exchanges are vying to win part of the flotation as it will bring a major boost to their trading volumes, and will be likely to help them win listings from other Gulf states which are looking to part-privatise their commodity
assets.

But the Aramco plan has created some public misgivings that Riyadh is relinquishing its crown jewels to foreigners cheaply at a time of low oil prices. Some Aramco employees secretly wish the whole idea would be shelved, sources say.

Apart from choosing an exchange, no decision has been made either on exactly which assets will be floated, or what Aramco’s internal organisational structure would look like after listing, the sources say.

One of the main issues being discussed internally is the valuation. Prince Mohammed has said the IPO will value Aramco at a minimum of $2 trillion, although some analysts’ estimates are between $1 trillion and $1.5 trillion.

Though listing on the New York market would mean access to more liquidity, this would bring greater scrutiny to Aramco’s estimates of proven energy reserves and future oil prices, as well as its demand forecasts, all of which play a major role in the company’s valuation, another industry source said.

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