Saudi Arabia Considers Selling Cheap Aramco Shares To Locals

BE2C2 Report — Oil giant Saudi Aramco is reportedly considering offering shares to citizens of Saudi Arabia as it prepares for an initial public offering that could be the biggest the world has ever seen — planned for 2018.

Bloomberg notes that the Kingdom has traditionally offered shares in government-owned companies for about US$2.67 each in an effort to redistribute wealth among the local population. Aramco could be valued at more than US$2 trillion in the sale. A 5 IPO could could fetch $100 billion or more, analysts say.

Quoting sources ‘familiar with the matter’, Bloomberg reported that Aramco has been talking about how to structure the IPO so that Saudi retail investors could get in on the deal cheaper than through international exchanges.

No details on the local shares structure have been released, nor has Aramco commented on the plan officially.

A final decision on the share pricing has also not been made yet.

Last week, Reuters reported that Saudi officials were debating whether Aramco should be listed as an industrial conglomerate or a specialized international oil company. Reuters quoted an anonymous source as saying that the choice is between making Aramco a pure oil and gas company or a conglomerate and expand its role in petrochemicals and other sectors as well.

Senior-level officials are now concerned with the complications this would create in valuing the state-run corporation ahead of its partial sale.

Under consideration will be Aramco venues listed in the U.S., the UK and Asia. Earlier this week, the Wall Street Journal said that the New York Stock Exchange was the favorite for the Aramco listing. London and Toronto’s exchanges are also being considered, but with less zeal, the Journal said, citing anonymous sources.

As far as Asia is concerned, the Saudis are said to be in talks with stock exchanges, but WSJ predicts that they are not likely to do an IPO there.

The Aramco IPO will potentially raise billions of dollars to support the Kingdom as it transitions from an energy dependent economy to one with more diverse prospects by the year 2030.

Aramco said to be in lead to buy fuel stations outfit in Turkey

Aramco is believed to be the front-runner to buy Turkish fuel stations business Petrol Ofisi from Austrian oil group OMV, sources familiar with the matter said.

The oil giant has placed a bid and is awaiting the result, said one source who declined to be identified because the matter is not public.

An OMV spokesman said the firm had received binding offers for Petrol Ofisi, which generated sales of around 10 billion euros ($10.5 billion) in 2015, but declined to give details.

OMV said this month it expected to conclude the sale of Petrol Ofisi in 2017.

“It is a secure long-term outlet for refined products in a market adjacent to Aramco’s operations,” said Sadad al-Husseini, a former senior executive at Saudi Aramco.

Turkish President Tayyip Erdogan visited Saudi Arabia on Feb. 14 and met King Salman. His big delegation included energy minister Berat Albayrak.

Aramco plans to raise refining capacity to 8-10 million barrels per day (bpd) from around 5.4 million now, to be closer to its key markets and expand its global refining footprint.

Petrol Ofisi has nearly 2,000 petrol stations, one mineral oil factory, 11 fuel and three liquid petroleum gas (LPG) terminals and more than 1.17 million cubic meters of storage capacity, according to its website.

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