World's largest oil company: Saudi Arabia approves IPO of Aramco

The IPO was already announced in 2016, now it is officially decided: The Saudi Arabian capital market authority has approved the IPO of the oil company Aramco.

The application to issue shares was granted, the regulator reported on its website. In December, the shares may be traded for the first time. The IPO is part of the country's economic reform program. Among other things, it should make Saudi Arabia less dependent on oil.

AFP

Saudi Crown Prince Mohammed bin Salman is seeking economic reform

Saudi Aramco, Saudi Arabia's state-owned oil company, is the largest oil company in the world - and the most valuable as well: the government is hoping for a valuation of $ 2 trillion and wants to sell a 5 percent stake in the stock market.

Optimistic estimate

The question is whether the group is worth as much as the government claims. Many analysts consider the government's assessment too optimistic. They assume that the market value will be lower. In the meantime, there had been some speculation in the markets as to whether the project might be postponed or even put on hold.

The Saudi Crown Prince Mohammed bin Salman is considered the driving force behind a series of economic reform and modernization efforts. The stock market plans for Aramco are also part of the so-called Vision 2030, with which the kingdom wants to reduce its dependence on oil revenues. These include the creation of a sovereign wealth fund, structural reforms and further privatization.

The state-owned Arabian American Oil Company is responsible for almost all oil deposits in the desert state. It produces several million barrels of oil daily. That's a good one-tenth of the world's production - more than twice as much as the US competitor Exxon. The group had the first time in April look in the books and reveals astronomical gains. Accordingly, the net profit last year totaled $ 111.1 billion.