Saudi Arabia to offer 0.5% for public shares in Aramco

Saudi Aramco's facility in Saudi Arabia

Saudi Aramco's facility in Saudi Arabia

Also, the Saudi government, the company's sole owner, won't offer any additional shares during the 12-month period after listing, but retains the right to sell to foreign governments or investors affiliated with foreign governments.

The September attacks on Aramco's biggest oil plant, which closed off about 5 percent of global distribution, raised concerns regarding the vulnerability of Aramco's oil field plants and exports amid deepening regional anxieties.

Aramco is the world's most profitable company, past year posting $111.1bn in net profit, AFP said. Trading could begin as soon as December 11, according to state-linked media.

In the prospectus, Aramco indicated that it would determine the IPO pricing and the percentage of the company to be sold in the offering at the end of the book-building period. Aramco will worth its shares on December 5, in line with the doc.

Aramco, the world's most profitable company, said on Sunday it was kicking off a domestic IPO, with scant details disclosed and expert valuations varying from around 1.2 trillion dollars to 2.3 trillion dollars.

The kingdom's plan to sell part of the company is part of a wider economic overhaul aimed at raising new streams of revenue for the oil-dependent country, particularly as oil prices struggle to reach the $75 to $80 price range per barrel analysts say is needed to balance Saudi Arabia's budget.

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PRODUCTION - In 2018, Aramco produced 13.6 million barrels per day of oil equivalent including 10.3 million bpd of crude.

The prospectus said the state giant will sell up to 0.5 percent of its shares to individual investors while it has still not decided on the percentage for larger institutional investors.

The valuation would be nearly twice that of Microsoft, now the world's most valuable listed company, and seven times that of Exxon Mobil Corp, the biggest listed oil major by market capitalisation.

"Valuation at the time of the IPO will depend on how much of demand is made up by subscribers who are prepared to overlook these factors in favour of Aramco's low depletion rate. and its very low cost of extraction versus peers". While the meeting and the location are not yet confirmed, a resolution to the trade war may prove to be a catalyst for oil prices and likely reduce the need for OPEC+ to act.

The Saudi oil giant is strengthening its position in China through investments in refining and petrochemicals, as well as increased crude oil supply.

Aramco's income also depends on the price of oil which has fluctuated sharply since mid-2014 from a monthly average of $112 a barrel in June 2014 to a monthly average of $31.9 a barrel in January 2016.

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