In the document, the firm says it will reserve part of its shares to institutional investors, including foreign companies, and individual investors, Saudi nationals and Gulf countries. Aramco states that a maximum of 0.5% of its shares will go to individual investors and that the percentage reserved for the largest investors will be determined later after consultations with its financial advisers and its main international banks. The firm did not disclose how many shares will be sold for this IPO. The transaction is expected to be based on a valuation of the company estimated by investors between $ 1,200 and $ 1,500 billion.
Offers will run from 17 November to 28 November for individual investors and until 4 December for institutional investors. Aramco will determine a price range for the shares on Nov. 17 but the final price will be closed on December 5, one day after registration ends. Aramco chairman Yasir al-Rumayyan said on Nov. 3 that his company has not had any plans for a foreign stock market for the moment, dismissing the long-talked-about scenario of a two-step deal. . "For the (international) part, we will let you know in due course, so far it is only on Tadawul," the Saudi financial market, he told Dhahran, headquarters of the company in the is Saudi.
The IPO of Aramco is the cornerstone of the reform plan of Crown Prince Mohammed bin Salman to generate cash to finance large projects and develop non-oil sectors of the economy.
The government reportedly lobbied wealthy families and institutional players to participate in the IPO, an action presented by some as a patriotic duty.
According to some reports, Aramco is also struggling to gain institutional investor support in a context of declining prospects for the energy sector and doubts about transparency and corporate governance.
Geopolitical risks The Norwegian sovereign wealth fund, the largest in the world, does not intend to invest in Aramco, a Norwegian official told AFP. Investors are also worried about geopolitical risks to the stock. The announcement of the introduction comes a few weeks after attacks against major facilities Aramco, against a backdrop of tensions with Iran, regional rival of the kingdom and also a member country of OPEC. These attacks resulted in a temporary reduction of half of Saudi production.
But China, the world's largest oil importer, could put up to $ 10 billion in the deal through sovereign wealth funds and other state-owned companies, Bloomberg said. Many Saudis are also enthusiastic about buying shares of the national flagship, which has made their country the largest economy in the Arab world. In 2018, Aramco's net income was $ 111.1 billion. In the first nine months of 2019, net income declined 18% to $ 68.2 billion.
Oil: Iran announces it has discovered a major orebody
Iranian President Hassan Rohani announced Sunday the discovery of a huge oil field that could increase by a third the proven reserves of his country. "We found an oil field with (reserves estimated at) 53 billion barrels," said Rohani during a speech in Yazd (center) broadcast by state television. "The field extends from Bostan to Omidiyeh", two cities in Khuzestan province in southwestern Iran, said Rohani, according to which "its surface is 2,400 km2 and its depth of 80 meters. " "This is a small gift from the government to the people of Iran," said Rohani as the country's economy suffers from the effect of economic sanctions restored against the Islamic Republic by the United States since August 2018. According to the latest edition of the "Global Energy Statistical Review" published annually by the British oil group BP, Iran has the world's fourth largest proven oil reserves, behind Venezuela, Saudi Arabia and Canada, with 155.6 billion barrels.