Saudi Arabia is considering an IPO of Saudi Aramco, the world’s biggest crude oil producer, deputy crown price Mohammed bin Salman says in an interview with The Economist.
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Saudi Aramco is the world’s largest oil company in terms of crude production and exports.
Aramco’s workforce grew to nearly 62,000 in 2014 from just over 57,000 the year before as the company, which has both the world’s largest proven crude oil reserves and is the largest crude exporter, expands its activities.
“Personally I’m enthusiastic about this step”, he told The Economist. A sale of shares would serve Saudi Arabia and Aramco’s interests, promote transparency and counter corruption.
Coupled with oil prices falling below US$35 a barrel, that put further pressure on petropowers like Saudi Arabia to diversify their economies.
Saudi Arabia’s income in 2015 fell 15% short of official expectations in 2015 while spending was some 13% more than had been expected. But the steep drop in oil from a peak of more than $100 a barrel to below $34 for West Texas Intermediate, the USA benchmark crude, is forcing changes. The Economist said about 5 percent of the company could be offered initially in Riyadh and more shares could be sold later, although the kingdom would retain control. The company is one of the key players in balancing the oil market and its investment decisions have the potential to move crude prices and affect economies around the world. Officials said the oil company is worth “trillions of dollars”.
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During this period Saudi Arabia and OPEC, the 13-member oil cartel Saudi Arabia is seen as the de facto leader of, has declined to cut oil production as it works to defend market share and continue bringing in whatever revenues it can.
