Saudi: “The Changing Scope Of Aramco”

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Crown Prince Mohammed bin Salman has revealed that Riyadh is undertaking a merger of its oil interests ahead of the anticipated flotation of Aramco.

In an interview with Bloomberg News, Prince Mohammed said the acquisition of petrochemical company Sabic by Aramco had knock-on effects on Aramco’s planned debut on the stock market.

“You cannot do the IPO of Aramco and then give the shareholders a surprise a year later with a new deal that wasn’t on the roadmap then,” he said. “So it has to be clear. It has to be clear IPO, clear strategy. So that’s why we have to do that before.”

Prince Mohammed said that it made no sense to have Sabic as a standalone entity if the two companies were plunged into direct competition in a scenario that Aramco invested heavily in petrochemicals in the future. The Sabic deal with Aramco is expected to be completed in early 2019.

Saudi Arabia was determined to follow through on the pledge of a sale, which Prince Mohammed expects to take place in “late 2020, early 2021”. The deputy prime minister projected the company would be valued over $2 trillion.

“We believe the higher price … is not definitely because of Iran,” he added. “It’s mostly because of things happening in Canada, and Mexico, Libya, Venezuela and other countries that moved the price a little bit higher. Oil demand will continue raising until 2030 by above one per cent, one to one and a half per cent, maybe more, and some believe that after 2030, it will decline.”


Source: The National 


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