Abu Dhabi: The Initial Public Offering (IPO) of Saudi Aramco will “definitely” happen, the company’s chief executive confirmed on Sunday, but he said it is not expected until 2021 after the potential acquisition of Sabic.
Amin Nasser, chief executive officer of Saudi Aramco, said the government’s plan is to list Aramco on Saudi’s Tadawul stock exchange, but is yet to decide on whether there will be a dual-listing elsewhere.
“There’s a lot of things the government did to facilitate the IPO. We would not have [gone] through all that [only] to have the IPO not happen,” Nasser told reporters in Abu Dhabi.
He added that the company is ready to list, and has all the elements needed to facilitate a public listing. Nasser said that Aramco has done “a lot of work” to prepare to be publicly listed, and that shows the company’s commitment to an IPO. That work includes changing Aramco into a joint stock company, having its oil and gas reserves audited, changes in its board of directors, and changing reforms, among other measures.
But even with those elements, an IPO in 2021 will depend on market conditions at the time, the CEO said.
“What’s happening right now is the potential acquisition of Sabic — the acquisition of PIF’s (Public Investment Fund of Saudi Arabia) shares in Sabic. Seventy per cent; that’s how much they (PIF) own, and that needs to be completed first before you can list Saudi Aramco,” Nasser said.
“That will take some time until we get the agreement with PIF, then we get regulatory agreements, antitrust requirements in different countries, and you need to reflect that in the balance sheet for at least a year before you can list Saudi Aramco,” he added.
He said that was why the government said the listing would happen in 2021 instead of the initially-announced 2019.
Discussing the potential acquisition of Sabic, Nasser said that Aramco is aiming to strengthen its presence in the petrochemicals segment, and needs a “significant acquisition” in order to do so. He said that such a deal would allow Aramco to be a global leader in both energy and petrochemicals, and to balance its upstream and downstream capabilities.
Nasser was speaking to reporters at a signing ceremony on the sidelines of Abu Dhabi International Petroleum Exhibition and Conference (Adipec). The signing was of a frame of agreement with Abu Dhabi National Oil Company (Adnoc) to explore potential opportunities for cooperation across natural gas and liquefied Natural Gas (LNG) value chains.
Under the deal, Adnoc and Aramco will explore opportunities both in the region and internationally to open up new markets and drive new revenues.
Aramco said the deal with Adnoc comes amid growing demand for LNG, which is currently rising at 4 per cent per year. Nasser said the deal between the two companies “shows the increased alignment” between them after they worked together on other deals earlier. He added that the latest agreement will be a start of more collaboration between Adnoc and Aramco, which already have joint work in India.