Saudis consider delaying Aramco IPO plan: WSJ report

Saudi Arabian officials are considering delaying plans to sell shares in Saudi Aramco to the public following Saturday’s drone attacks on the state oil giant’s facilities, the Wall Street Journal reported on Monday, citing people familiar with the matter. 

Saturday’s attacks knocked out more than half of Saudi Arabia‘s daily oil output, sending crude prices soaring when markets opened on Monday. 

Saudi energy officials and Aramco executives are discussing whether to reschedule its initial public offering (IPO) until after production is fully restored to normal levels, the WSJ reports. 

Saturday’s drone attacks were the most brazen to date on the kingdom’s oil infrastructure and laid bare the vulnerabilities of its oil production network at a time when Aramco – officially called the Saudi Arabian Oil Company – was accelerating plans to sell shares to the public for the first time. 

Saudi Aramco’s chief executive Amin Nasser said on Tuesday that the company’s primary share listing would be on Saudi Arabia’s domestic stock exchange but that it was also ready for an offering on an international exchange.

Saudi Arabia’s newly installed Energy Minister Prince Abdulaziz bin Salman said last week that the kingdom was aiming for the Aramco IPO “as soon as possible”.

Selling shares in Aramco is crucial to Crown Prince Mohammed bin Salman‘s plans to diversify the Saudi economy away from oil revenues. But the highly anticipated IPO has been dogged by questions over its valuation.

Based on the indicated $2 trillion valuation that Saudi Aramco had hoped to achieve, a one-percent float would be worth $20bn – huge for the local market.

Analysts and bankers, however, say $1.5 trillion is a more achievable valuation for the world’s biggest oil company.