Aramco to start trading on Saudi Exchange in December: Report

Crown Prince Mohammed bin Salman hopes for a $2 trillion valuation for Aramco.

    Aramco produces 10 million barrels of crude oil a day and provides some 10 percent of global demand [File: Maxim Shemetov/Reuters]
    Aramco produces 10 million barrels of crude oil a day and provides some 10 percent of global demand [File: Maxim Shemetov/Reuters]

    The long-planned initial public offering (IPO) of a sliver of Saudi Arabia's state-run oil giant Saudi Aramco will see shares traded on Riyadh's stock exchange in December, a Saudi-owned satellite news channel reported on Tuesday as the kingdom's marquee investment forum got under way.

    The report by Dubai-based Al-Arabiya offered a crackle of life to the Future Investment Initiative in the kingdom's capital of Riyadh, an event created by Saudi Crown Prince Mohammed bin Salman colloquially known as Davos in the desert.

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    Initial panels at the forum offered a pessimistic look at the world as participants described the global economy as teetering on a 1930s-level crisis.

    Prince Mohammed, however, hopes for a very-optimistic $2 trillion valuation for Aramco, which produces 10 million barrels of crude oil a day and provides some 10 percent of global demand. That would raise $100bn he needs for his ambitious redevelopment plans for Saudi Arabia.

    However, economic worries, the trade war between China and the United States and increased crude oil production by the US have depressed energy prices.

    A September 14 attack on the heart of Aramco spooked some investors, with one ratings company already downgrading the oil giant. Meanwhile, questions persist over how the IPO will be handled even as Saudi Aramco offers sweeteners and promises of an estimated $75bn dividend next year.

    The report by Al-Arabiya did not elaborate and cited anonymous sources for the information. However, the channel often breaks news before even the kingdom's state-run media and is widely believed to have a direct line to the Al Saud royal family.

    The station's English arm offered more details, saying that a final price for the stock will be set on December 4, with shares then beginning to be traded on the Riyadh-based Tadawul stock market on December 11.

    It added that the Saudi Capital Markets Authority will make a formal announcement about the IPO plans on Sunday. Pricing will begin on November 17, it said.

    "The Aramco IPO is a cornerstone of Saudi Arabia's Vision 2030 plan, which aims to wean the kingdom off its reliance on oil to diversify the economy," the channel said in its report.

    Saudi state media and government officials did not immediately acknowledge the report. There also have been other delays in the IPO as well, which have left analysts sceptical.

    Damp outlook at Davos in the desert

    The Future Investment Initiative drew 6,000 people and international firms to Riyadh for a forum that is the brainchild of the 34-year-old Prince Mohammed. Already, the forum announced Dow Chemicals, HSBC, Samsung and other global firms as partners to the event. Major private equity firms and investment houses also are taking part.

    Heads of state are attending, with Indian Prime Minister Narendra Modi and Jordan's King Abdullah II both scheduled to speak on Tuesday. Also scheduled is Jared Kushner, President Donald Trump's son-in-law and a White House adviser.

    The event is held in part at Riyadh's Ritz-Carlton Hotel, which served as a detention facility during a 2017 purge targeting businessmen, princes and others.

    Described at the time as an anti-corruption campaign, the arrests targeted wealthy potential challengers to the prince and cemented his grip on power amid allegations of torture denied by the kingdom. Authorities later said it saw the government recoup over $100bn.

    However, there will be big names not taking part. Among them is Jeff Bezos, the CEO of Amazon and the owner of The Washington Post, who had been in negotiations to open data centres in the kingdom before the killing and dismemberment of Saudi journalist Jamal Khashoggi at the Saudi Consulate in Istanbul, the Post reported on Monday.

    Khashoggi's death cast a pall over last year's forum, which saw Prince Mohammed give a fiery speech in which he described the killing as "a heinous act that is unjustifiable". However, US officials and a recent United Nations special rapporteur's report suspect Prince Mohammed had a role in the slaying as members of the team of assassins sent to kill Khashoggi had links to the prince.

    "It inconceivable that an operation of this scale could be implemented without the crown prince being aware, at a minimum, that some sort of mission of a criminal nature, directed at Mr Khashoggi, was being launched," the UN report read.

    As the forum started, panellists including Ray Dalio, the founder of the world's largest hedge fund Bridgewater Associates, offered stark warnings about the state of the global economy, rising inequality and "a conflict between capitalism and socialism".

    "There's a form of revolution taking place," Dalio said.

    Kirill Dmitriev, the CEO of Russian Direct Investment Fund, offered a similarly austere opinion, discussing the "weaponisation of ideas".

    "If there's a major war, or God forbid, nuclear war, nobody will care about monetary policy," he said. "Those geopolitical tensions need to reduce."

    SOURCE: AP news agency