Saudi Aramco delays planned IPO to allow for earnings update, sources say

An employee walks past crude oil storage tanks at the Juaymah Tank Farm in Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Ras Tanura, Saudi Arabia, on Oct. 1, 2018.Simon Dawson | Bloomberg | Getty ImagesSaudi Aramco has delayed the planned launch of its initial public offering, as the giant oil company wants to update investors with its latest earnings before proceeding, two sources familiar with the matter said on Thursday.The world’s largest oil firm was to announce plans next week to float a 1% to 2% stake on the kingdom’s Tadawul market before a possible international listing.However, after a Sept. 14 attack on its Abqaiq and Khurais plants knocked out half the crude output of the world’s top exporter, Aramco wants to reassure investors by presenting results covering the period, the two sources said, speaking on condition of anonymity as the information is not public.”They want to do all they can to hit the valuation target, so solid results after the attack will give them a stronger position,” said one of the sources.The second source said the offering had been postponed, and there was currently no new date set for the listing.The Financial Times, which initially reported the IPO delay, cited a source as saying the listing has been delayed by “weeks.”Saudi Aramco did not immediately respond to a Reuters’ request for comment outside regular working hours.Aramco executives had previously insisted the infrastructure attack, which initially knocked out 5.7 million barrels per day of production — or more than 5% of global oil supply — would have no impact on its plans for listing the company.Earlier this month, Energy Minister Prince Abdulaziz bin Salman said Saudi Arabia had fully restored oil output, which allowed it to focus on the IPO.However, sources familiar with the IPO told Reuters on Sept. 24 that the offering was unlikely to happen this year, given the impact of the attacks.Aramco’s Riyadh listing is the first step towards an eventual sale of up to 5%, sources have told Reuters.The prospect of the world’s largest oil company selling a piece of itself has had Wall Street on tenterhooks since Crown Prince Mohammed first flagged it three years ago.Initial hopes for a blockbuster international listing of around 5% were dashed when the share sale was halted last year amid debate over where to list Aramco’s shares overseas.Saudi investors see the IPO as a chance to own part of the kingdom’s crown jewel and an opportunity to show patriotism after the attack.

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