Saudi Aramco IPO needs to go well, ex-CIA chief Petraeus says

Saudi Arabia needs the initial public offering (IPO) of its state oil company to be successful as it needs to attract outside investment and, frankly, it needs the money, the former chief of the CIA David Petraeus told CNBC Thursday.”It’s a fact that Saudi Arabia is gradually running out of money, they’d be the first to acknowledge that the sovereign wealth fund has been reduced, it’s somewhere below $500 billion now,” Gen. David Petraeus, who is currently chair of the KKR Global Institute, told CNBC’s Hadley Gamble in Abu Dhabi.”The (budget) deficits each year, depending on the price of Brent crude, can be anywhere from $40 to $60 billion depending on some of their activities in countries in the region.””The bottom line is that they need the money, they need that outside investment that is crucial to delivering ‘Vision 2030′ which cannot be realized without outside investment, this is just one component of a number of different initiatives that they’re pursuing to try to attract that outside investment,” he added.Saudi Arabia is going to float a small portion of its state oil giant Saudi Aramco, the most profitable company in the world, in December. The IPO was first flagged in 2016 by the now-Crown Prince Mohammed bin Salman. He said then that he believed the company was worth around $2 trillion. The listing is seen as part of the crown prince’s “Vision 2030” program of economic and social reforms designed to diversify the kingdom’s economy and reduce its dependence on oil.Gen. David Petraeus, Former CIA Director, Fmr. Central Commander and American commander in Iraq.Adam Jeffery | CNBCAramco has not yet revealed all the details of the size and scale of its share offering but said last weekend that it will sell up to 0.5% of its shares to individual investors. The listing on Saudi’s Tadawul exchange next month could form part of the largest IPO in history. A final offer price, as well as the number and percentage of company shares that will be sold, will be determined in early December. Analysts’ valuations of the company have varied from $1.2 trillion to $2.3 trillion.Petraeus said there were “a number of different elements that will determine the success of Vision 2030” and that it was in “everyone’s interests” to see the kingdom succeed and to see it carry out reforms.He said there had been some “missteps — some of them truly grievous, the horrific murder of (Saudi journalist Jamal) Khashoggi being foremost among those” but added that “at the end of the day, we all want Saudi Arabia to succeed, and for that to happen Vision 2030 is some element of that.”

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