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Saturday, Feb 22, 2025

Aramco reportedly delays planned IPO to allow for earnings update

Aramco reportedly delays planned IPO to allow for earnings update

Company executives had originally said the Saudi oil infrastructure attacks would not change timeline for market debut.

Saudi Aramco has delayed the planned launch of its initial public offering (IPO), as the giant oil company wants to update investors with its latest earnings before proceeding, two sources familiar with the matter said on Thursday.

The world's largest oil firm was to announce plans next week to float a one to two-percent stake on the kingdom's Tadawul market before a possible international listing.

However, after a September 14 attack on the Abqaiq and Khurais plants in Saudi Arabia knocked out half the crude output of the world's top exporter, Aramco evidently wants to reassure investors by presenting results covering the period.

"They want to do all what they can to hit the valuation target, so solid results after the attack will give them a stronger position," said one of the sources.

The second source said the offering had been postponed, and that there was currently no new date set for the listing.

The Financial Times, which initially reported the IPO delay, cited a source as saying the listing has been delayed by "weeks".

Saudi Aramco did not immediately respond to a Reuters News Agency request for comment.


Trudging ahead


Aramco executives had previously insisted the infrastructure attack, which initially knocked out 5.7 million barrels per day (bpd) of production - more than five percent of global oil supply - would have no effect on its plans for listing the company.

Earlier this month, Saudi Energy Minister Prince Abdulaziz bin Salman said the country had fully restored oil output, which allowed it to focus on the IPO.

However, sources familiar with the IPO told Reuters in September that the offering was unlikely to happen this year, given the impact of the attacks.

Aramco's Riyadh listing is thought to be the first step towards an eventual sale of up to five percent.

The prospect of the world's largest oil company selling a piece of itself has had Wall Street on tenterhooks since Crown Prince Mohammed bin Salman first flagged it three years ago.

However, his desired two-trillion-dollar valuation has always been questioned by some financiers and industry experts who note that countries have been accelerating efforts to shift away from fossil fuels to curb global warming, putting oil prices under pressure and undermining producers' equity value.

Initial hopes for a blockbuster international listing were dashed when the share sale was halted last year, amid debate over where to list Aramco's shares overseas.

Saudi investors see the IPO as a chance to own part of the kingdom's crown jewel and an opportunity to show patriotism after the attack.

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