Aramco on track for IPO, says Saudi energy minister

Saudi Arabia said the schedule for the blockbuster initial public offering of its state-owned oil giant isn’t “slipping,” with the kingdom still targeting a sale by the end of 2018.

The government is “moving right ahead” for an IPO of Saudi Aramco in the second half of next year, the energy minister Khalid Al Falih said on Thursday in Moscow. “There is nothing to indicate that schedule is slipping in any way.”

Bloomberg News reported last month that Riyadh was making contingency plans for a possible delay by a few months into 2019. Several important decisions on the IPO have yet to be taken, including which stock exchanges will list the shares. That may stretch Aramco’s ability to execute the sale before the end of 2018, people familiar with the matter said in September.

Mr Al Falih said on Thursday that the details of the IPO “will be announced in due course”, without elaborating.

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The sale of 5 per cent of Aramco is the cornerstone of the country’s Vision 2030, a much wider plan conceived by Crown Prince Mohammed bin Salman to reshape the economy and diminish its dependence on oil. The government has said the sale could value the company at as much as US$2 trillion, although analysts have tended to give lower estimates.

Oil prices, a key consideration in determining the valuation, have fallen since mid-2014. While a Saudi-led deal between Opec and Russia has curbed crude output this year, prices remain around the mid-$50s a barrel and may not average $60 until 2019, according to analyst forecasts compiled by Bloomberg.

If Saudi Arabia achieves its $2 trillion valuation, the 5 percent stake it plans to sell would raise about $100 billion. That would eclipse the $25bn raised by Alibaba in 2014, the current record.