Saudi Aramco 'Optimistic' 2018 Right Time for IPO

Saudi Arabia's state-run energy giant Saudi Aramco is optimistic 2018 will be the right time for its IPO in what will likely be the biggest share offering in history, its chief executive said on Tuesday.

Speaking to the World Energy Congress in Istanbul, Amin Nasser confirmed that around five percent of Saudi Aramco's share capital is expected to be sold in the Initial Public Offering (IPO) but emphasized the final decision lay with Deputy Crown Prince Mohammed Bin Salman.

He said that, despite the current period of low oil prices, markets had started to recover, emphasizing Saudi Aramco took a long term view with $300 billion (270 billion euros) of investment planned in the next decade focused on gas.

"We are optimistic that the markets started to recover and we expect them to recover even more in 2017," said Nasser.

"I think the time in 2018 will be almost just right (for the IPO)," he added.

The partial privatization and reform of Saudi Aramco is a centerpiece of Prince Mohammed's 2030 vision aimed at modernizing the kingdom and diversifying its economy.

Without giving any valuation, Nasser said even a five-percent sale would be by far the biggest IPO in history, easily outstripping the $25 billion raised by Chinese e-commerce firm Alibaba in 2014.

"Five percent of the whole of Aramco will be a big listing. I don't think there will be a listing of that size in the future," he said.

He said that Prince Mohammed had evoked five percent as the likely portion to be sold off but emphasized that the final decision would be taken by the company's supreme council which the powerful prince heads.

- 'Listing location undecided' -The chief executive acknowledged that "the (industry) environment has never been more challenging or more dynamic" and expressed concern over the long-term effects of companies delaying investments due to the low oil price.

"I fear supply growth will fall behind demand over time," he said. "We must continue making adequate and timely investment."

But referring to a pick-up in oil prices in the last days, he added: "The market started to recover and we hope it will continue to do that."

Nasser said the massive company would be "more than happy" to share all its financial details with investors after going public.  

He said all options were still on the table for the location of the listing, including New York, despite the current difficulties in US-Saudi ties.

The US Congress last month voted to override President Barack Obama's veto of a bill allowing 9/11 victims to sue Saudi Arabia, infuriating the kingdom.

"We did not finalize yet our listing destination. We are reviewing all markets... nothing is off the table as of yet," he said, adding it would again be up to the supreme council to make the final decision.