Riyadh – Mubasher: The world’s largest oil company, which has repeatedly confirmed its plans for an initial public offering (IPO), deemed the largest in the world, has stressed that it would retain exclusive rights to develop the Saudi kingdom’s oil reserves even as the IPO opens up to foreign investment.
“There is no intention whatsoever to chip away at Aramco’s exclusivity and its concession,” Bloomberg reported, citing Saudi energy minister Khalid Al-Falih as saying in response to a question on whether the opening to international investors would extend to upstream oil and gas assets.
The Saudi Arabian Oil Co, known globally as Saudi Aramco, is preparing for its IPO, for which the Saudi government has granted the mega oil firm a concession to pump most of the country’s crude, according to Al-Falih.
Saudi Arabia is known for its heavy-reliance on crude oil but following the sharp plunge in crude prices in mid-2014, the kingdom has sought to diversify its economic resources away from oil. The drive, led by Crown Prince Mohammed bin Salman, is known as the Vision 2030. As part of this vision, Al-Falih also revealed that Saudi Arabia was planning to invest around $425 billion in infrastructure as well as the energy and mining sectors by 2030.
Saudi Arabia’s total crude reserves have reached 268.5 billion barrels, which is more than the 266.3 billion figure previously released by the Saudi government, the news agency reported, citing an official audit of the kingdom’s deposits, which also revealed that Aramco’s concession entails reserves of 263.1 billion barrels with the remainder resting in an area Saudi Arabia shares with Kuwait.
Although Aramco regularly partners with international firms such as Total and Exxon Mobil Corp for its refining operations, crude extractions of hydrocarbons are all its own.
“Everything else remains as is for Saudi Aramco as we prepare for what we hope will be a speedy process to prepare for the IPO,” Al-Falih said.
Over the course of 2018, Saudi Aramco repeatedly reaffirmed its intention to launch its IPO after news reports said it was going back on its plan. A previous valuation put Aramco at $2 trillion, while its IPO of around 5% would help the kingdom raise around $100 billion, making Aramco’s IPO the largest in the world.
Since July 2018, Aramco also began talks with the kingdom’s Public Investment Fund (PIF) over a majority acquisition in the Saudi Basic Industries Corp (SABIC). Last week, sources told Reuters that the world’s largest oil company was seeking advisers for a mega loan to finance the potential acquisition in SABIC, after Aramco CEO Amin Nasser stressing that his company was pushing ahead with the acquisition.
Aramco is reportedly considering borrowing up to $50 billion for the deal.
Aramco appointed US-based banks JPMorgan and Morgan Stanley as financial advisers for the potential deal, noting that it may enter the global bond market for the first time ever in order to finance the acquisition.
