Dubai: Saudi Aramco is looking at a number of foreign exchanges, including London, New York and Hong Kong, for a partial listing of the oil giant in 2018, chief executive Amin Nasser said on Monday.
The state-oil firm plans to list as much as 5 per cent on Saudi Arabia’s stock exchange, the Tadawul, and at least one foreign exchange as part of efforts to wean the country’s economy away from hydrocarbon sales.
“This thing will happen in 2018,” Nasser told reporters at a conference in Dubai. He said “other exchanges” were also under consideration without disclosing where.
The oil giant is estimated to be worth as much as $2.5 trillion (Dh9.2 trillion) by conservative valuations. Revenue from the partial listing is to be used by a sovereign wealth fund to diversify the economy.
Nasser, who formally took over as chief executive in September 2015, also said that the oil market was “heading towards rebalance” and that “prices are likely to strengthen in time.”
However, he warned that the market was “still weak” even after recovering from its 12-year-low of $27 a barrel in January to trade at an average of around $43 so far this year.
“Market volatility could remain with us for the near future,” he said earlier in an address to the conference.
The Organisation of Petroleum Exporting Countries (Opec), responsible for about a third of the world’s oil production, will meet in Algiers this week to discuss the more than halving of oil prices since mid-2014. The 14-member group is expected to discuss limiting production, though few expect decision in Algeria with oil ministers scheduled to meet informally.
However, Iraq’s governor to the group Falah Al Amri said on September 22 that Algiers was the “right time” for action.
Oil producers, including non-Opec members such as Russia who will also be in Algiers, failed to reach an agreement on freezing production in April in Doha, Qatar.
Nasser also said Aramco is spending more than $100 billion over the next five years on its exploration budget “despite the down cycle.”
Aramco will also invest $334 billion on various sectors over the next decade, including on materials and on infrastructure and projects to maintain oil capacity, Abdul Aziz Al Abdul Karim, Vice-President for Procurement and Supply Chain Management, told a conference in Bahrain, according to a Reuters report. It was not immediately clear if that figure includes the exploration budget.
Nasser said Aramco was working with a Chinese partner to identify a location for an oil storage facility in China and that Aramco would make an announcement later this year about expanding storage capacity in Japan.
Investment decline will lead to price volatility in 2019/2020 – Kuwait Petroleum
A decline in investment in the oil industry driven by low prices over the past two years will lead to “price volatility” in 2019 and 2020 as producers struggle to meet demand, Kuwait Petroleum Corporation chief executive warned on Monday.
“That non-investment will catch up with us in two or three years’ time,” Nizar Al Adsani, who is also deputy chairman of the state oil company, said speaking at an energy conference in Dubai. “It would be a big strain on us as oil producers to meet demand and to stabilise prices in the future.”
Earlier, the chief executive of oil services major Schlumberger said that investment is needed to balance the market.
“The time has come to shift the conversation from cost cutting and squeezing of the supply chain,” Paal Kibsgaard told the conference.