Saudi crown prince insists Aramco IPO 'still on track'

Saudi crown prince insists Aramco IPO going ahead next year
2 min read
28 Oct, 2017
Saudi Arabia's powerful Crown Prince Mohammed bin Salman has insisted the planned part privatisation of the country's national oil company will go ahead, as planned, in 2018.
Saudi Aramco is a planned to go on sale next year [Getty]
Saudi Arabia's Crown Prince Mohammed bin Salman has told Reuters the part privatisation of the country's state-owned oil giant will go ahead as planned next year.

The crown prince said the initial public offering [IPO] of Saudi Aramco slated for 2018 is on time, although he admitted that there are still many details that need to be ironed out.

"We are on track in 2018... but the listing are still under discussion," Crown Prince Mohammad told Reuters this week. "It will be IPO-ed in 2018."

Five percent of Saudi Aramco will go on sale to the public with Riyadh hoping the oil giant will be valued at more than $2 trillion.

"Aramco would prove itself on the ground on the day of the IPO. Actually when I talked about the valuation, I talk about $2 trillion, it could be more than $2 trillion," the crown prince said.

This would put the IPO sale at $100 billion and help the crown prince fund his extensive reforms and infrastruture plans that is hoped will help Saudi Arabia's economy diversify away from oil.

Most economists believe that the $2 trillion valuation of Saudi Aramco is hugely over optimistic and the country will be left disappointed at the end results.

Many Saudis fear the sale at a time of continued low oil prices would mean the government is selling off the country's silver cheap.

Mohammed bin Salman says that despite these opinions, he is confident the IPO will be a success.

"I know that there has been a lot of argument around this topic but at the end of the day the right say is that of the investor. Undoubtedly the biggest IPO in the world must be accompanied by a lot of rumours," he said.

Mohammed bin Salman has insisted on the country pursuing a more business-friendly model with huge changes to society and the economy planned to attract foreign investors.

The crown prince's comments came as the crown prince unveiled plans for a new mega-city in Saudi Arabia and neighbouring Jordan and Egypt.

Riyadh hopes NEOM will become a high-tech hub for the region and the planned cost to build the investment zone will be $500 billion.

But much of its success relies on the outcome of the IPO and the ability of Mohammed bin Salman to bring in the investments he has promised.

Rumours have persisted that the IPO of Saudi Aramco will not go ahead on time or might be shelved.