Amin H. Nasser, President and CEO of Saudi Aramko, spoke during a press conference at Plaza Conference Center in Dhahran, Saudi Arabia, November 3, 2019.
Hamad Mohammed | Reuters
Saudi Aramko has set a price range for its list, which suggests the oil giant is worth between $ 1.6 trillion to $ 1.7 trillion, below the $ 2 trillion that the Saudi heir has previously targeted, which makes it potentially the largest IPO in the world. [1
Aramco can simply beat the record $ 25 billion raised by Chinese e-commerce giant Alibaba when it makes its stock market debut in New York in 2014.
Aramco's list is due in December, and the company said last weekend that it will sell up to 0.5% of its shares to individual investors. Speculation and delayed announcements in the public listing of the world's most profitable company have roused investors and market watchers since float plans were first revealed three years ago.
The oil giant has delayed its IPO – originally scheduled for 2018 – repeatedly, according to reports due to Saudi concerns over public control over its finances and the complexity of its corporate structure.
The company's analysts' estimates range from $ 1.2 trillion to $ 2.3 trillion. For comparison, Aramco's closest competitor in the United States, Exxon Mobil, has a market cap of nearly $ 300 billion, and Chevron is valued at about $ 229 billion. When the IPO was first registered in 2016 by Crown Prince Mohammed bin Salman, he said at the time that he believed the company was worth about $ 2 trillion.
Aramco's list will aim to raise money for a government that wants to significantly reduce its budget deficit and diversify its economy beyond oil as part of the Crown Prince's Vision 2030 program.
is still largely dependent on oil exports. Lack of oil prices (a barrel of the Brent crude currently stands at nearly $ 63) pushed the country's budget deficit (the amount by which costs outweigh its revenue).
In 2018, the budget deficit is projected to be around 136 billion riyals (or about $ 36 billion), according to the Ministry of Finance. It is expected to be a similar amount in 2019. And in 2020, the kingdom expects the deficit to widen to $ 50 billion, the king's finance minister said in October, according to Reuters.
– Natasha Turak, CNBC, Holly Elliott and Joanne Tan contributed to this article.