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Abu Dhabi, UAETuesday 19 June 2018

Crown prince Mohammed reiterates 2018 Aramco IPO timing

"Listing [details] are still under discussion" but no chance of giant share sale being delayed or shelved

Saudi Crown Prince Mohammed bin Salman at the Future Investment Initiative (FII) conference in Riyadh. The Aramco IPO will definitely take place next year, he said. Fayez Nureldine/ AFP
Saudi Crown Prince Mohammed bin Salman at the Future Investment Initiative (FII) conference in Riyadh. The Aramco IPO will definitely take place next year, he said. Fayez Nureldine/ AFP

Saudi Aramco's initial public offering is on track for next year and the national oil giant could be valued at more than US$2 trillion, Saudi Arabia's crown prince Mohammed bin Salman said.

The sale of around 5 per cent of Aramco next year is a centrepiece of Vision 2030, an ambitious reform plan to diversify the Saudi economy beyond oil which is championed by prince Mohammad.

Saudi officials have said domestic and international exchanges such as New York, London, Tokyo and Hong Kong have been looked at for a partial listing of the state-run firm.

A decision on which exchange would secure the offering has still not been made, fuelling market speculation that the IPO could be delayed beyond 2018 or even shelved, amid growing concerns about the feasibility of an international listing.

"We are on track in 2018 ... but the listing [details] are still under discussion," prince Mohammed said. "It will be IPO-ed in 2018."

He declined to discuss specific details of the IPO, which could be the biggest in history and is expected to raise as much as $100 billion.

Investors have long debated whether Aramco could be valued anywhere close to $2tn, the figure announced by prince Mohammed, who wants to raise cash through the IPO to finance investments aimed at helping wean the world's biggest oil exporting nation off its dependency on crude.

But he reiterated that Aramco's estimated valuation would be about $2tn.

"I know that there has been a lot of argument around this topic but at the end of the day the right say is that of the investor. Undoubtedly the biggest IPO in the world must be accompanied by a lot of rumours," prince Mohammed said.

"Aramco would prove itself on the ground on the day of the IPO. Actually when I talked about the valuation, I talk about $2tn, it could be more than $2tn."

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The timing of the IPO will depend on getting legal and regulatory approval from the jurisdictions it opts to list in, industry sources had said. It could also be influenced by the oil price - currently below $60 per barrel - a price Saudi officials have identified as a good level.

Opec kingpin Saudi Arabia is leading Opec and other oil producers such as Russia to restrict oil supplies under a global oil pact to drain global inventories and boost oil prices.

"We are committed to work with all producers, Opec and non-Opec countries, we have a great and historic deal... We will support anything to stabilise the oil demand and supply," prince Mohammed said when asked whether the kingdom would support extending the agreement until the end of 2018. The current pact expires in March.

"I think now the oil market swallowed the shale oil supply, now we are regaining things again."