Saudi Arabia partially privatizes the largest oil company

Muhammad bin Salman, Crown Prince of Saudi Arabia, has given his final consent to an initial public offering - IPO - of Saudi Arabian Oil Co. (Saudi Aramco). It is reported by UNIAN.

“According to the interlocutors of the journalists, the decision was made at a meeting chaired by the Crown Prince, he considered the support of local investors sufficient to start the IPO procedure”, the statement said.

The country's largest oil company was nationalized in the 1970s. Its partial privatization will be a major change in the oil industry of Saudi Arabia.

“For the first time, Saudi Aramco’s possible IPO was announced in January 2016. The curator of the Saudi Vision 2030 strategy, which provides for reducing the country's dependence on oil exports, was the Crown Prince himself”, Bloomberg recalls.

The funds received from the sale of 5% of the shares were planned to be used for economic reform. It was estimated that the company's capitalization would exceed $2 trillion. However, the process was frozen in August 2018, after two years of preparation. This summer, preparations for the placement of shares resumed.

DW reports that IPO will be held on the Saudi Tadawul exchange. The oil concern plans to offer to place 5% of its shares and raise $100 billion.

Saudi Aramco may be the most expensive company in the world whose shares are traded on an exchange.

Trading on the Tadawul exchange is due to begin on December 11th. Saudi Arabia is planning a massive restructuring of the economy, whose main goal is to make the country less dependent on oil.

The country is the world's largest oil exporter, daily it supplies the world market with about 7 million barrels of oil.

Recall that in September, drones attacked the facilities of Saudi Aramco. After that, the company reduced daily oil production by 5.7 million barrels. As a result of such events, oil prices rose by 10%. Brent crude oil jumped by 19% on the London-based ICE Futures Europe exchange to $71.95 per barrel.

Later, the oil company decided to “unfreeze” its offshore fields and begin production there.

The press also said that Saudi Aramco buys oil from neighboring countries, after an attack on its oil facilities, in order to fulfill obligations to foreign partners.

At the end of September, the Saudi Minister of Energy announced that Saudi Aramco had resumed its production capacity to a normal level after attacks on facilities.

Tags: contracts, oil, hydrocarbon production, tariffs, legislation, Top management, energy market, добыча нефти, drilling, foreign affairs, oil transit, export, import

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