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Why Saudis Are Pinning Their Future on Giant Oil IPO: QuickTake

Why Saudis Are Pinning Their Future on Giant Oil IPO: QuickTake

(Photographer: Kostas Tsironis/Bloomberg/Bloomberg)
By Anthony Dipaola and Wael Mahdi | Bloomberg March 11 at 8:55 PM

The world’s most valuable company may not be Apple Inc. That crown could instead belong to Aramco, as Saudi Arabian Oil Co. is better known. The sprawling state-owned producer, sitting atop one-fifth of the globe’s petroleum reserves, pumps more crude than the top four publicly traded oil companies combined. Crown Prince Mohammed bin Salman, the Saudi king’s influential son who’s driving the sale, says the company is worth in excess of $2 trillion (more than double the size of Apple), though no one really knows because its profits are shrouded in secrecy. The veil could soon be lifted: The Saudi government is planning a partial privatization of Aramco to create a war chest and prepare the country for the post-hydrocarbon age.

The original plan was to sell up to 5 percent of Aramco in 2018, but ministers now acknowledge the timing of the initial public offering may slip to 2019. The authorities are still weighing up whether to hold share sales on the Saudi bourse and one or two overseas exchanges — or restrict the offering solely to the domestic exchange. London, New York and Hong Kong are clamoring for the business. (President Donald Trump helped with the U.S. pitch).