Saudi oil giant Aramco is studying the feasibility of an additional stock offering in Riyadh, which could help the world’s biggest oil firm raise billions of U.S. dollars, Bloomberg reported on Tuesday, citing sources familiar with the plans.
Aramco, which is also the world’s number-two company by market capitalization – second only to Apple – has been considering with several advisors the possibility of selling more stock on the market, according to Bloomberg’s sources. Neither the timing nor the size of a potential offering has been decided, they add.
Currently, Saudi Arabia owns just over 98% of Aramco after selling 1.7% in the initial public offering (IPO) in December 2019. Of the 98% held by the Kingdom, the Saudi government owns 90% of Aramco, while the sovereign wealth fund owns the other 8%.
Back in January 2021, Saudi Crown Prince Mohammed bin Salman said that Aramco plans more share offerings to the public in the coming years.
“There are going to be IPOs by Aramco in the following years,” the crown prince said at the time, but did not give any details either about the timing of the new share sales or on which markets those sales could take place.
The share sale that Aramco is currently considering could take place as soon as this year if the Saudi rulers give the go-ahead, according to Bloomberg’s sources.
As Aramco is valued at around $2 trillion, even a sale of 1% could raise around $20 billion for the Saudi firm and government.
Saudi Arabia and its crown prince have planned massive investments in futuristic cities to attract tourists and talent in the digital economy and diversify away from its dependence on oil revenues.
Last week, Aramco reported a first-quarter net income of $31.9 billion, down by 19% from the first quarter of 2022, as macroeconomic concerns dragged down oil prices between January and March 2023. The company’s average realized crude oil price dropped to $81.0 per barrel in the first quarter of 2023, down from $97.7 a barrel in the same period of 2022.
By Charles Kennedy for Oilprice.com
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