- Tram Ho
The world’s most valuable company is probably not Apple. That crown should belong to Aramco, or better known as Saudi Arabian Oil Co. Saudi Arabia’s state-owned oil conglomerate owns 20% of the world’s oil reserves, with production greater than the total output of the four largest listed oil companies in the world.
Crown Prince Mohammed bin Salman, who is behind Saudi Arabia’s ambitious economic restructuring, said the group was worth more than $ 2,000 billion, nearly double Apple’s market capitalization.
In 2018, Aramco caused a fever with the plan to go to the floor with a huge IPO but it was eventually postponed. The event sparked speculation that Aramco will forever be unable to go to the floor. But Crown Prince Mohammed insists the biggest “IPO in human history” will definitely take place.
Announced in 2016, the kingdom’s original plan was to sell about 5% of Armaco’s shares on the Saudi stock exchange and 1-2 other stock exchanges overseas or only domestically. However, the plan was postponed to the end of 2020 or early 2021 to give Aramco more time to find funding and complete the project.
Global investors are also quite interested in the IPO, with some banks valuing 5% of Aramco’s shares worth between 50 and 75 billion USD – significantly lower than the figure of more than 100 billion USD. that Prince put out. However, the lowest valuation will also swallow the world’s largest IPO until now is worth $ 25 billion.
The purpose of the IPO is to reform Saudi Arabia’s economy so that it no longer depends too much on oil, getting ready for the post-hydrocardbon era.
The murder of Saudi journalist Jamal Khashoggi last November threatened to derail Thailand’s socioeconomic reform ambition and flee foreign investors. But so far investors have returned and last month Aramco said it had recruited two investment banks as advisors in its second attempt to IPO.
Standard Oil prospectors, the oil empire run by the Rockefellers, were the first to discover oil in Saudi Arabia in 1938. Later the Arabian American Oil joint venture was established and explored in the region. Ghawar, which is still today the largest land oil field in the world.
In 1980, the Saudi government removed the original shareholders (all of them later became the founders of Exxon Mobil and Chevron) and renamed the company.
Aramco has been the main driving force behind Saudi Arabia’s prosperity over the past few decades. The group contributes nearly 90% of the government’s total income and constructs refineries, petrochemical plants and other infrastructure that forms the backbone of the world’s 17th largest economy. Saudi Arabia has been an unofficial leader of OPEC ever since its inception in 1960.
Any decision to increase or decrease Aramco’s output greatly affected the price of oil. For every nine barrels of crude oil produced in the world, one barrel comes from Saudi Arabia, and the barrel can be refined at a cost of about a third of that of the United States. Saudi Arabia always tries to keep prices low to maintain market share in the global energy market.
Crown Prince Mohammed wants Aramco’s IPO to be the mainstay of Saudi Arabia’s biggest economic reform plan since its founding in 1932. However, listing on major exchanges such as New York or London means Aramco has to disclose a lot of things. It will be a leap forward for a relatively closed nation like Saudi Arabia. However, so far Aramco has taken investment steps to publicize its activities by announcing a limited number of business results.
Aramco’s IPO also raises questions about its ability to protect its role in the world oil market and the influence of the royal family. There is also the possibility that the Saudi government must raise taxes on Aramco in order to finance military and social spending. The trend of investors leaving the carbon-producing industries like oil also created skepticism about the demand for Aramco shares as well as the up and down momentum of this stock after going to the floor.
Source : Nhịp sống kinh tế