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Abu Dhabi, UAEWednesday 19 September 2018

Saudi oil minister confirms Aramco IPO still set for 2018

'We will announce the venue in due course,' says Khalid Al Falih

Saudi Aramco's Manifa oilfield. The oil minister says the company's planned IPO is on track. Reuters
Saudi Aramco's Manifa oilfield. The oil minister says the company's planned IPO is on track. Reuters

Saudi Arabia is still aiming to complete both international and domestic portions of the initial public offering of Aramco, its state oil company, in 2018, the Saudi oil minister Khalid Al Falih said Tuesday.

Asked whether both the local and international parts of the IPO will happen in 2018, he said: "Yes of course. It is on track." He declined to answer questions on whether Chinese investors were interested in buying ahead of the IPO as cornerstone investors.

Mr Al Falih’s comments came after unnamed people familiar with the situation said last week that the kingdom is considering delaying the international portion of the offering until at least 2019. A two-stage Saudi Aramco IPO is one of several options being considered, the people said, asking not to be identified. Another plan would include listing in Riyadh next year and privately selling a stake in Aramco to one or several cornerstone investors, one of the people said.

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The government has said the sale of 5 per cent of the shares could value the company at as much as US$2 trillion, although analysts have tended to give lower estimates. If Saudi Arabia achieves its valuation, the 5 per cent stake it plans to sell would raise about $100 billion. That would eclipse the $25bn raised by Alibaba Group in 2014.

The IPO is the centerpiece of a broad-ranging economic reform programme proposed by the crown prince Mohammed bin Salman. Any delay would be a setback to his plans as well as the plethora of international investment banks and international exchanges eyeing millions in fees and commissions.

London and New York exchanges are vying for a role in the Aramco IPO, with Hong Kong, Singapore, Tokyo and Toronto also trying to attract the sale.

"The IPO is on track," Mr Al Falih said in London on the sidelines of the annual dinner of the Oil & Money conference. "We will announce the venue in due course."

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