Saudi Arabia committed to Aramco IPO, to proceed with privatisation

Prince Mohammed bin Salman said it was still premature to announce where the IPO will be held.
Sunday 16/06/2019
An Aramco employee walks near an oil tank at Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia, May 21, 2018. (Reuters)
An Aramco employee walks near an oil tank at Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia, May 21, 2018. (Reuters)

Saudi Arabia remains committed to selling shares in national oil conglomerate Aramco through an initial public offering but only at the right time, Crown Prince Mohammed bin Salman has said.

"We are committed to the IPO of Saudi Aramco based on appropriate conditions and at the right time," Prince Mohammed told the pan-Arab daily Asharq al-Awsat in an interview published on Sunday.

He reiterated his earlier expectations that the IPO of Saudi Aramco "will take place in (late) 2020 or the start of 2021," almost two years later than expected.

Saudi Arabia plans to sell up to 5% of the world's largest energy firm and hopes to raise up to $100 billion.

Prince Mohammed said it was still premature to announce where the IPO will be held, adding that many requirements for the sale to go through had been successfully completed.

Riyadh has taken a number of key procedures in preparation for the IPO including issuing a law for hydrocarbons tax, appointing a new board for Aramco and allowing an independent auditing of the kingdom's oil reserves, the crown prince said.

Aramco has also opened its accounts books for the first time to international ratings agencies, declared the size of its profits and transformed into a public shareholding company, he said.

The IPO -- expected to be the world's largest stock sale -- forms the cornerstone of a reform programme envisaged by Prince Mohammed to wean the Saudi economy off its reliance on oil.

Saudi Arabia's crown prince also said that his government will finalise privatisation deals worth 2 billion riyals ($533 million) before the end of this year.

The government will next year offer privatisation projects in the education sector with investments worth around 1 billion riyals, according to the interview.

The privatisation drive is part of Vision 2030, a package of reforms led by Crown Prince Mohammed bin Salman that is intended to wean the economy off oil and create jobs for young Saudis.

The prince said the kingdom's sovereign wealth fund (PIF) is playing a major role in the economic diversification process and that its assets has doubled in two years to 1 trillion riyals. 

(Reuters and AFP)