RIYADH - Energy giant Saudi Aramco said on Sunday its second-quarter profits plunged a massive 73 percent due to sharply lower oil prices as the coronavirus crisis undercuts global demand.
The behemoth, recently dethroned by Apple as the world's most valuable listed company, posted a net profit of $6.6 billion for the three months to June 30 compared to $24.7 billion for the same period of 2019.
The results are in line with analysts' expectations but stand in contrast to the losses reported by its rival energy giants, which are reeling from a drop in oil demand since the start of the novel coronavirus pandemic.
"Strong headwinds from reduced demand and lower oil prices are reflected in our second quarter results," Aramco's chief executive Amin Nasser said in a statement.
"Yet we delivered solid earnings because of our low production costs, unique scale, agile workforce and unrivalled financial and operational strength."
Aramco's net profit for the first half of the year also slumped by 50.5 percent to $23.2 billion, compared to $46.9 billion in the same period last year.
The results underscore a downbeat oil market as pandemic-driven economic shutdowns crush the global demand for crude.
Five other leading oil firms -- BP, Chevron, ExxonMobil, Royal Dutch Shell and Total -- recently reported combined losses of $53 billion for the second quarter.
By contrast, Aramco's results reflected its "financial resilience", Nasser said, as the company presses ahead with a plan to pay $75 billion in dividends this year.
Nasser also voiced optimism over what he called a "partial recovery in the energy market" amid an easing of virus restrictions in some countries.
But amid low crude prices, Aramco is looking at cutting its 2021 budget by between eight and 10 percent from this year's already reduced levels, the Energy Intelligence group reported last month.
Aramco has said it expects capital expenditure to be at the "lower end of the $25 billion to $30 billion range" this year.
That is significantly lower than its expenditure of $32.8 billion in 2019, according to Energy Intelligence.
"Cutbacks have already caused Aramco to delay plans to expand production from its offshore fields," Energy Intelligence said in a report.
"The offshore program was a core element of a push to raise the company's oil production capacity."
The company has also slashed hundreds of jobs as it seeks to reduce costs, Bloomberg News reported in June.
Saudi Arabia, the world's biggest crude oil exporter, has been hit hard by the double whammy of low prices and sharp cuts in production.
A sharp drop in oil income is expected to hinder Crown Prince Mohammed bin Salman's ambitious plans to overhaul the kingdom's energy-reliant economy.
Oil prices dropped to a two-decade low below $20 a barrel in April and May as the coronavirus dampened demand, before recovering to around $44 a barrel after the OPEC+ producers agreed to record output cuts.
Following the move, Saudi oil production dropped to 7.5 million barrels per day in June, compared to last year's average of 10 million bpd.
Aramco's profits were also impacted by the losses posted by the Saudi Basic Industries Co. (SABIC), the petrochemicals giant it acquired for $69 billion in a deal completed this year.
The energy giant is bracing for a possible further wave of coronavirus infections that could impact a tentative global economic recovery and erode the demand for crude worldwide, analysts say.
Aramco was listed on the Saudi bourse in December following the world's biggest IPO, generating $29.4 billion for 1.7 percent of its shares.
US technology firm Apple last week replaced it as the world's most valuable company after its capitalisation grew to $1.9 trillion, compared to $1.76 trillion for Aramco.
Nasser said Aramco would distribute $18.75 billion in dividends for the second quarter to keep its listing promise of distributing at least $75 billion in annual dividends for five years.
"We are committed to delivering sustainable dividends through market cycles, as we have demonstrated this quarter," Nasser said in a media call, according to Bloomberg News.
"Our intention is to pay $75 billion, subject to board approval, of course, and market conditions."
Agence France-Presse
RIYADH - Saudi Aramco soared on Thursday above the $2 trillion valuation target sought by the kingdom's de facto ruler as the energy giant's share price surged on its second day of trading.
The valuation milestone, which defies widespread skepticism from investors, was coveted by Crown Prince Mohammed bin Salman ever since he first floated the idea of listing the world's biggest oil firm four years ago.
Aramco shares jumped 9.7 percent to 38.60 riyals ($10.3) on Thursday morning -- following a 10-percent rise the previous day -- before paring some gains in the early afternoon.
That boosted the oil giant's market capitalization to over $2 trillion, up from a $1.7 trillion valuation set during its initial public offering, the world's biggest.
Aramco shares on the kingdom's Tadawul stock exchange, which closes at 1200 GMT, are allowed to fluctuate by a maximum of 10 percent each day.
Tadawul witnessed one of its most hectic trading sessions on Thursday, with some 400 million Aramco shares -- worth more than $4 billion -- changing hands.
Thursday is the last weekly trading day in Muslim Saudi Arabia. Trading resumes on Sunday.
Aramco's stock sale is the cornerstone of Prince Mohammed's ambitious strategy to overhaul the oil-reliant economy by raising funds to pour into megaprojects and non-energy industries such as tourism and entertainment.
The $25.6 billion proceeds from the Aramco IPO are expected to be channeled into the coffers of the Public Investment Fund, the Saudi sovereign wealth fund, which will invest it in mega projects.
'PATRIOTIC DUTY'
Wealthy Saudi families are reportedly under pressure from the government to invest in the Aramco stock, with nationalists calling it a patriotic duty.
Aramco also dangled sweeteners for investors, including guarantees that it will distribute dividends of at least $75 billion a year until 2024 and the possibility of bonus shares if they hold on to the stock.
Once one of the most secretive companies in the world, Aramco opened its accounts this year and announced that it posted $111 billion in net profit in 2018, making it the most profitable company in the world.
The energy giant's valuation was declared to be $1.7 trillion during the IPO process, putting it far ahead of other firms in the trillion-dollar club, including Apple and Microsoft.
And the listing of Aramco, with its huge capital value, boosts the Saudi bourse to the ranks of the world's top 10.
But the scaled-down offering is still a far cry from the blockbuster originally planned by Prince Mohammed.
The much-delayed stock sale, first announced in 2016, was initially expected to raise as much as $100 billion from the listing of up to five percent of the company.
The government's plans to raise additional funds by listing on a major international market are also on hold.
source: news.abs-cbn.com
NEW YORK -- Global equity markets rose on Wednesday after the Federal Reserve indicated interest rates would remain on hold for some time - a positive for risk assets - while oil prices fell after data showed an unexpected increase in US crude inventories.
New projections showed 13 of the US central bank's 17 policymakers foresee no change in rates until at least 2021 as moderate economic growth and low unemployment are expected to continue through next year's presidential election.
That outlook nudged stocks on Wall Street higher as investors await a decision on whether US President Donald Trump would allow his promised new tariffs on almost $160 billion of Chinese goods to go forward on Sunday.
The projection of no rate hikes for the foreseeable future is phenomenal when US monetary policy over the last few decades is considered, said Kristina Hooper, chief global market strategist at Invesco in New York.
"We shouldn't treat that as boring or uneventful; this is actually very important. The bar is very high for any rate hikes," she said.
Hooper said the Fed is the key factor that has been driving the stock market, in addition to US-China trade relations that have been center stage for markets in recent weeks as negotiators try to hammer out a "phase one" deal.
"The Fed decision to sit on its hands and its outlook for 2020 should be positive for the stock market," she said.
MSCI's gauge of stocks across the globe gained 0.41 percent, climbing to within two points of its all-time high of 550.63. The pan-European STOXX 600 index rose 0.22 percent.
On Wall Street, the Dow Jones Industrial Average rose 29.58 points, or 0.11 percent, to 27,911.3. The S&P 500 gained 9.11 points, or 0.29 percent, to 3,141.63 and the Nasdaq Composite added 37.87 points, or 0.44 percent, to 8,654.05.
The 17-month trade war has roiled capital markets and crimped global growth, noticeably in China. Paramount in investors' minds is the looming Dec. 15 US deadline on tariffs, with no immediate clarity on what the decision will be.
After US stocks set new highs two weeks ago and MSCI's global gauge of equity performance neared its all-time peak, stocks have since trended downward as investors await news on the trade front.
"The market's waiting for Godot, waiting on the tariffs," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
Confidence has grown as Sunday approaches that Trump will do something to keep the trade talks on track, which has increased risk-on sentiment in the market, Ghriskey said.
The White House's top economic and trade advisers are expected to meet with Trump in coming days on a decision, a source told Reuters.
Jamie Dimon, chief executive at JPMorgan and chairman of the Business Roundtable, a trade group of top US CEOs, said he expected a phase-one trade deal to be finalized and said not doing so would be "negative" for markets.
Gold rose and extended gains during comments by Fed Chair Jerome Powell, while the US dollar trended lower.
US gold futures settled 0.5 percent higher at $1,475 an ounce.
Investors also await the first European Central Bank meeting with Christine Lagarde as president on Thursday, as well as a general election in Britain that could determine the fate of the country's exit from the European Union.
The dollar index fell 0.3 percent, with the euro up 0.39 percent to $1.1135. The Japanese yen strengthened 0.14 percent versus the greenback at 108.57 per dollar.
The British pound, a high-flier of late, dropped from a seven-month peak after an opinion poll projected a narrower-than-expected victory for the Conservative party in the UK election.
Benchmark 10-year US Treasury notes rose 10/32 in price to yield 1.7983 percent.
In the Middle East, Saudi Aramco shares surged 10 percent above their initial public offering price on their first day of trading. That gave the state-controlled oil company a market value of about $1.88 trillion, making it the world's most valuable listed company.
Oil prices fell after US crude stocks clocked a surprise rise in the most recent week while gasoline and distillate inventories also rose, data from industry group the American Petroleum Institute showed.
Brent futures settled down 62 cents at $63.72 a barrel. West Texas Intermediate crude slipped 48 cents to settle at $58.76 a barrel.
source: news.abs-cbn.com
RIYADH - Saudi Aramco's shares soared on their debut on the domestic stock exchange Wednesday, becoming the world's biggest listed company worth $1.88 trillion after a record-breaking IPO.
Aramco had priced the initial public offering at 32 riyals ($8.53) per share, raising $25.6 billion and eclipsing Alibaba's $25 billion IPO of 2014 to become the world's largest.
Aramco shares rose 10 percent to 35.2 riyals just seconds after trading began on Riyadh's Tadawul exchange, the maximum allowed on any trading day, further boosting the energy giant's valuation.
"Today is a day of immense pride for Aramco," company chief executive Amin Nasser said at a glitzy launch ceremony.
"Today we make history as Saudi Aramco marks the beginning of an important new chapter in our company's journey of prosperity," he added.
The stock sale is the bedrock of de facto ruler Crown Prince Mohammed bin Salman's ambitious strategy to overhaul the oil-reliant economy.
Wealthy Saudi families are reportedly under pressure from the government to invest in the Aramco stock, with nationalists calling it a patriotic duty.
Aramco also dangled sweeteners for local investors, including promises of higher dividends and the possibility of bonus shares if they hold on to the stock.
The IPO process had put the energy giant's value at $1.7 trillion, far ahead of other firms in the trillion-dollar club including Apple and Microsoft.
The listing of Aramco, with its huge capital value, boosts the Saudi bourse -- known as Tadawul -- to the ranks of the world's top ten.
But the scaled-down offering is still a far cry from the blockbuster originally planned by Prince Mohammed who had eyed a $2.0 trillion valuation.
The much-delayed stock sale, first announced in 2016, was initially expected to raise as much as $100 billion from the listing of up to five percent of the company.
The government's plans to raise additional funds by listing on a major international market are also on hold.
The government is now trying to persuade wealthy families and institutions to buy Aramco shares after trading begins, in a last-ditch effort to reach the $2 trillion mark, the Financial Times reported on Tuesday.
The Saudi government itself has pumped in huge funds to boost the IPO, which was originally intended to raise external funding for the kingdom's diversification plan.
Two-thirds of the shares were offered to institutional investors. Saudi government bodies accounted for 13.2 percent of the institutional tranche, investing around $2.3 billion, according to lead IPO manager Samba Capital.
"It's likely that we will see Aramco bid up to $2 trillion or higher in the first days of trading, and potentially to trade limit up on the first day," Zachary Cefaratti, chief executive officer at Dalma Capital Management -- which bought shares in the IPO -- told Bloomberg News.
The IPO is a crucial part of Prince Mohammed's plan to wean the economy away from oil by pumping funds into megaprojects and non-energy industries such as tourism and entertainment.
But skeptics say the proceeds will barely cover the kingdom's budget deficit for a year.
The IPO was heavily focused on Saudi and other Gulf traders. International investors have remained skeptical about the secretive company's targeted valuation.
The market debut also comes with oil prices under pressure due to a sluggish global economy hit by the US-China trade war and record output by non-OPEC crude exporters.
source: news.abs-cbn.com
NEW YORK -- Saudi Arabia's state oil company Aramco launched its initial stock offering on Thursday, pricing at the high end of the target range and raising $25.6 billion, two sources told AFP.
The sum raised by the oil giant surpasses the $25 billion garnered by the Chinese online trading group Alibaba in 2014 when it entered Wall Street.
The market debut also puts the Saudi oil behemoth's value at $1.7 trillion, far ahead of other corporate giants in the trillion-dollar club: Apple ($1.2 trillion), Microsoft and Alibaba ($1.1 trillion).
Aramco is expected to begin trading Dec. 12 on the Tadawul exchange in Riyadh at 32 riyals, or $8.53, the sources said.
That is on the upper end of the range of 30-32 riyals the company set last month even though major banks advising it called for caution to reduce volatility in the first days of trading.
The IPO has been underwritten mainly by the Saudis themselves, as major foreign investors raised questions about corporate governance, the company's ability to protect its oil installations and its profit outlook as global climate policies become stricter.
Aramco's market debut is intended to help diversify Saudi Arabia's economy away from its overwhelming reliance on petroleum.
The company expects to sell 1.5 percent of its capital during the initial public offering.
Agence France-Presse
LONDON/RIYADH - Saudi Aramco is looking to buy insurance against war and terror attacks after a damaging drone and missile attack on some of its oil facilities in September, two sources told Reuters.
Aramco, the world's largest oil company, has been looking for cover from insurers including those based at Lloyd's of London and elsewhere in the London market, they added.
The firm is seeking cover for facilities in Saudi Arabia's Eastern Province, its oil heartland, where it suffered the September attacks, one of the sources said.
Aramco said in the prospectus of this month's planned listing that it did not insure against all risks and its cover may not protect it from terrorism or acts of war.
At the launch of the IPO, which could be the world's biggest and raise up to $25.6 billion, Aramco said that it did not expect the Sept. 14 attack to have a material impact on its finances and operations.
Aramco declined to comment.
Available insurance options range from cover against a terror attack or sabotage through to full coverage, which includes war or civil war, along with compensation for the cost of business interruption.
An initial loss estimate from the strikes on Aramco's plants was 2 billion riyals ($533 million), a third source said.
Aramco insures much of its property itself through a so-called captive insurer, Bermuda-based Stellar Insurance.
Although one of the sources said Aramco also has an "excess of loss" cover with international insurers for any property damage above $200 million, this does not cover war or terror attacks, or revenue losses due to business interruption.
Aramco, which said in October it had fully restored oil output after the September attacks on its facilities, did have war cover around five years ago, the source added.
'WAKING UP'
Companies have become nervous about attacks on their property in Saudi Arabia, the world’s top crude exporter, after the strikes which temporarily shut down 5.7 million barrels per day (bpd) of Aramco's output, more than 5% of global oil supply.
As well as Aramco, a Saudi petrochemical company is also looking for terror and war insurance in Eastern Province where the attacks took place, a fourth source said.
"We have received more enquiries," said Scott Bolton, director, crisis management at insurance broker Aon, adding that both domestic and international companies were checking whether they were covered for such attacks.
Saudi Basic Industries Corp (SABIC), which Aramco agreed to buy in a $69.1 billion deal this year, already has war insurance, one of the sources said.
SABIC did not immediately respond to a request for comment, but said in its 2018 annual report that it "kept a close eye on emerging geopolitical interruption risks" and had added cyber insurance to its global insurance programme.
Riyadh and Washington have blamed the September strikes on Iran, which denies involvement. The United States has sent troops to Saudi Arabia, which it says is aimed at deterring further attacks amid heightened regional tensions.
The cost of war and terror policies in Saudi Arabia has risen by "multiples" since the attacks, one of the sources said without giving more detail on pricing. Another added that companies in the region were "waking up" to the idea.
Aramco's captive insurer, Stellar, offers energy onshore and offshore property, general liability and associated business interruption cover, insurance ratings agency AM Best said.
AM Best confirmed Stellar's financial strength rating of A (excellent) with a stable outlook in October, adding that the insurer had indicated its property programme had "no exposure" to the strikes.
The captive has a "diversified panel of financially strong reinsurers", AM Best said.
Global reinsurers Hannover Re, Munich Re and Swiss Re, which help insurers cover large risks, declined to comment, while Aon said it did not have "visibility" into whether Aramco was seeking insurance.
source: news.abs-cbn.com
MANAMA, Bahrain - The United States and France are boosting Saudi Arabia's radar systems following crippling drone and cruise missile attacks on Saudi oil infrastructure in September, which Washington blames on Iran.
The chief of the US Central Command and France's defense minister, whose countries have taken divergent approaches to Iran, also touted rival versions of maritime missions to protect Gulf waters at a Bahrain security forum on Saturday.
More than two months after the biggest assault on Saudi oil facilities, Riyadh and Washington have yet to provide concrete proof linking Iran to the attack while Saudi Arabia has provided few details about how it is addressing gaps in its air defenses.
Tehran denies involvement in the strikes that initially halved the crude output of the world's top oil exporter and led the United States to send thousands of troops and military hardware to the kingdom.
"We continue to refine information on the attack against (Saudi state oil firm) Aramco and that will be released principally through the Saudis," said General Kenneth McKenzie, who oversees operations in the Middle East and South Asia.
"We are working with the Saudis to increase the networking of their systems. That will make them better able to defend against this type of threats," he told reporters.
McKenzie said boosting the US military presence at Prince Sultan Air Base south of Riyadh, in addition to large bases in Qatar and Bahrain, would "complicate an adversary's ability to target you".
French Defense Minister Florence Parly said Paris was separately sending Riyadh "a robust package of advanced warning", including radars, to confront low-altitude attacks.
"It will be in Saudi Arabia in the coming days so it will be operational very, very rapidly. But there is an analysis to be done in order to better identify how to fill the gap," she later told reporters.
"COOLING TEMPERS"
The Sept. 14 strikes heightened regional tensions following attacks on tankers in Gulf waters and other Saudi energy assets in the summer that Washington also blamed on Iran, a charge Tehran denies.
Saudi Minister of State for Foreign Affairs Adel al-Jubeir told the IISS Manama Dialogue that Riyadh was consulting with its allies about what measures would be taken against Iran after the investigation concluded. He gave no timeframe.
The event focused mostly on the Iranian threat but included no representatives from Tehran. It underscored differences between Western allies over how to deal with Iran since the United States quit a 2015 international nuclear pact.
France wants to salvage the agreement, which Saudi Arabia and other US-allied Gulf states oppose for failing to address Iran's ballistic missiles program and regional interference.
"We have seen a deliberate, gradual US disengagement," Parly said, citing also US inaction over a 2013 chemical attack in Syria and this year's downing of an American drone by Iran.
She said it was time to "reinvent deterrence", mentioning France's efforts to form a European-led maritime mission, unassociated with the US maximum pressure campaign on Iran, to help "cool down tempers".
Parly told reporters the initiative could start early next year and around 10 European and non-European governments would join pending parliamentary approval.
Only Albania, Australia, Bahrain, Saudi Arabia, the United Arab Emirates and the United Kingdom have so far joined the US-led International Maritime Security Construct (IMSC), which McKenzie said would "shine a spotlight on nefarious activity".
source: news.abs-cbn.com
RIYADH - Saudi Arabia on Sunday put a value of up to $1.71 trillion on energy giant Aramco in what could be the world's biggest IPO, but missed Crown Prince Mohammed bin Salman's initial target of $2 trillion.
Aramco said it would sell 1.5 percent of the company in a blockbuster initial public offering worth $24-25.6 billion, scaling down Saudi Arabia's original plan to sell up to five percent of the firm.
"The base offer size will be 1.5 percent of the company's outstanding shares," the state-owned energy giant said as it began taking bids from investors in a price range of 30-32 Saudi riyals per share ($8-8.5).
The much-delayed offering, a cornerstone of de facto ruler Prince Mohammed's ambitious plan to diversify the oil-reliant economy, could exceed the world's biggest listing -- the $25 billion float of Chinese retail giant Alibaba in 2014.
But the plans are a long way from the crown prince's initial aim to raise as much as $100 billion from a dual listing -- a first flotation of two percent on the kingdom's Tadawul bourse, followed by a further three percent on an overseas exchange.
The firm has said there are no current plans for an international stock sale and the IPO seems to be banking on local demand, with one-third of the offering reserved for Saudi retail investors.
Aramco kicks off its investor road show on Sunday, but a source close to the company told AFP it will not be marketing the shares overseas, including the United States, as originally planned.
The source did not offer an explanation but analysts said it was because the listing was not compatible with US regulatory requirements.
Aramco has also shied away from plans to list on foreign exchanges such as New York owing to litigation risks.
The launch has been dogged by delays since the idea was first announced in 2016, with Prince Mohammed's desired valuation of $2 trillion meeting with skepticism from investors and analysts.
Tarek Fadlallah, chief executive officer of the Middle East unit of Nomura Asset Management, called the company's valuation of between $1.6-1.71 trillion a "sensible compromise".
If priced at the top end of the range, it could eclipse Alibaba to become the world's biggest IPO, Fadlallah added on Twitter.
BOOSTING STATE COFFERS
Saudi Arabia is pulling out all the stops to ensure the success of the IPO, a crucial part of Prince Mohammed's plan to wean the economy away from oil by pumping funds into mega projects and non-energy industries.
"If subsequently effectively deployed, the funds raised could be used to support longer-term economic growth in Saudi Arabia," said S&P Global Ratings.
The government has reportedly pressed wealthy Saudi business families and institutions to invest, and many nationalists have labeled it a patriotic duty.
Among those considering a sizeable investment is Prince Al-Waleed bin Talal, a billionaire tycoon who was held in Riyadh's palatial Ritz-Carlton hotel in 2017 during a crackdown on corruption, Bloomberg News reported.
Last week senior cleric Abdullah al-Mutlaq sought to drum up support for the IPO among ordinary Saudis, saying in a local television program that it was permissible in Islam and even religious scholars were likely to participate.
Even for the domestic listing though, there are reports the firm is struggling to attract foreign institutional investors, amid uncertainties in energy markets and questions over company disclosures and governance.
Investment research firm Bernstein, which earlier said Aramco was valued between $1.2 and $1.5 trillion, said the company's declared valuation was "higher than most institutional investors would consider attractive".
In its prospectus released last week, the firm listed a variety of risks ranging from the possibility of anti-trust legislation to "terrorist" attacks and geopolitical tensions in a region dominated by Saudi-Iran rivalry.
It also acknowledged that climate change concerns could reduce demand for hydrocarbons and warned global oil demand may peak within the next 20 years.
But Aramco, a cash cow that catapulted the kingdom to become the Arab world's biggest economy, does appear to hold enormous appeal for local retail investors, some of whom are taking loans to fund share purchases.
source: news.abs-cbn.com
DUBAI - Saudi state oil giant Aramco will sell 0.5 percent of its shares to individual retail investors and the government will have a lockup period of a year on further share sales after the initial public offering, its prospectus said on Saturday.
The more than 600-page prospectus did not include details of how much of the company would be floated in total or of any commitments from anchor investors.
Sources have said the company could sell 1 to 2 percent on the Saudi stock market in what could be the world's largest listing.
Offering for the shares will begin on Nov. 17, the prospectus said.
Aramco fired the starting gun on the initial public offering (IPO) on Nov. 3 after a series of false starts. Crown Prince Mohammed bin Salman is seeking to raise billions of dollars to diversify the Saudi economy away from oil by investing in non-energy industries.
Among the risks highlighted in the prospectus were the potential for terrorist attacks and the potential for encountering antitrust legislation, as well as the right of the Saudi government to decide maximum crude output and direct Aramco to undertake projects outside its core business.
Aramco may also change its dividend policy without prior notice to its minority shareholders, it said. For a factbox on risk factors, click
Aramco's oil facilities were targeted on Sept. 14 in unprecedented attacks that temporarily shut 5.7 million barrels per day (bpd) of output - more than 5 percent of global oil supply.
LOCKUP PERIOD
The prospectus said the government will have a "statutory lockup period" for disposing of any shares after the listing for six months, and a contractual lockup period for 12 months.
Aramco cannot list additional shares for a period of six months after trading starts, and will also be restricted from issuing additional shares for 12 months.
The offering for institutional investors will begin on Nov. 17 and end on Dec. 4, while retail investors will be able to bid for the shares from Nov. 17 to Nov. 28, the prospectus said.
"Aramco IPO is an opportunity that shouldn't be missed, the largest company in the world....holding Aramco shares is an absolute gain," a Saudi with a twitter handle named Abdulrahman wrote.
Aramco has been in talks with Gulf and Asian sovereign wealth funds and wealthy Saudi individuals to secure top investors of the IPO, but no anchor investor is yet to formally agree to a deal.
The Russia-China Investment Fund is working to attract Chinese investors for Aramco's planned IPO, the head of Russia's RDIF sovereign wealth fund said on Thursday.
Bankers have told the Saudi government that investors will likely value the company at around $1.5 trillion, below the $2 trillion valuation touted by Prince Mohammed when he first floated the idea of an IPO nearly four years ago.
Initial hopes for a 5 percent IPO on domestic and international bourses were dashed last year when the process was halted amid debate over where to list Aramco overseas.
Aramco said the timetable was delayed because it began a process to acquire a 70 percent stake in petrochemicals maker Saudi Basic Industries Corp.
The prospectus said Goldman Sachs was named as stabilizing agent for the deal.
Analysts from banks working on the Riyadh bourse have projected a wide valuation range between $1.2 trillion to $2.3 trillion.
At the top valuation of $2 billion, Aramco could potentially raise $40 billion, topping the record-breaking $25 billion raised by Chinese e-commerce giant Alibaba in 2014.
The valuation would be almost twice that of Microsoft, currently the world's most valuable listed company, and seven times that of Exxon Mobil Corp, the biggest listed oil major by market capitalization.
"Due to its size and likely free float, Aramco should be eligible for fast-track inclusion in both the FTSE and MSCI Emerging Market indices within 10 days of the IPO," said Dominic Bokor-Ingram, senior portfolio manager, frontier markets, Fiera Capital (Europe).
source: news.abs-cbn.com
RIYADH -- Saudi regulators on Sunday approved state energy giant Aramco's request to make its stock market debut, firing the starting gun on the highly anticipated offering which could be the world's largest.
The announcement paves the way for a domestic stock listing of Aramco, with share trading expected to begin in December, while its plans to launch on an international bourse remain unclear.
The listing of the world's most profitable company forms the linchpin of Crown Prince Mohammed bin Salman's ambitious plans to overhaul the oil-reliant economy, with tens of billions of dollars needed to fund megaprojects and new industries.
The Capital Markets Authority "has issued its resolution approving the Saudi Arabian Oil Company (Saudi Aramco)... application for the registration and offering of part of its shares," the regulator said in a statement.
Sources close to the initial public offering (IPO) have told AFP that Aramco is expected to sell a total of five percent on two exchanges, with a first listing of two percent on the Tadawul Saudi bourse in December.
That would be followed next year by a three percent listing on an overseas exchange, which has yet to be picked, they said in recent days.
'Integral component'
First suggested by Prince Mohammed in 2016, the IPO was delayed several times reportedly due to his dissatisfaction with the valuation of the firm, which fell short of the hoped for $2 trillion.
Aramco was expected to launch the first part of a two-stage IPO in October.
Last week, Energy Intelligence cited sources as saying they expect the Saudis to settle on a valuation of $1.6 trillion to $1.7 trillion for the firm.
If confirmed, that would imply the kingdom is ready to accept a compromise of less than the $2 trillion that the crown prince has long insisted the state oil giant is worth.
It remains to be seen whether Saudi authorities are able to find "a compromise between the crown prince's stated preference and market realities in their valuation of Aramco," said Kristian Ulrichsen, a fellow at Rice University's Baker Institute in the United States.
"As the process has been delayed repeatedly and built up as such an integral component of the crown prince's plan to transform Saudi Arabia, international investors will pay very close attention to how Aramco performs on the domestic exchange," Ulrichsen told AFP.
Aramco, which pumps around 10 percent of the world's oil, is the most profitable company globally and is seen as the kingdom's crown jewel and the backbone of its economic and social stability.
Saudi Arabia has boosted efforts to woo investors to the long-awaited stock market debut by announcing an annual dividend of $75 billion, according to the company's website.
Riyadh is also reportedly seeking to get wealthy Saudi families to buy a stake in the company while some Saudi commentators have sought to promote investment in the stock as a patriotic duty.
However, Aramco executives have encountered scepticism among institutional investors in London and New York on questions about the firm's transparency, governance practices and targeted valuation, sources have told AFP.
"An important function of the domestic IPO is to project confidence in the company towards the international market, but doing it domestically encounters no meaningful obstacle, comparable to doing an international listing," said Cinzia Bianco, Gulf research fellow at the European Council on Foreign Relations.
"It allows Prince Mohammed to show he keeps his promises and gets things done, another step to reassure international investors that the IPO will happen after all," Bianco said.
source: news.abs-cbn.com
RIYADH, Saudi Arabia - Saudi Aramco has emerged from attacks on its oil facilities "stronger than ever," Chief Executive Amin Nasser told employees in a message, adding that full oil production would resume by the end of this month.
The Sept. 14 attacks on the Abqaiq and Khurais plants, some of the kingdom's biggest, caused raging fires and significant damage that halved the crude output of the world's top oil exporter, by shutting down 5.7 million barrels per day of production.
"The fires that were intended to destroy Saudi Aramco had an unintended consequence: they galvanized 70,000 of us around a mission to rebound quickly and confidently, and Saudi Aramco has come out of this incident stronger than ever," Nasser said in the internal message, on the occasion of the Saudi national day, to be celebrated on Sept. 23.
"Every second counts in moments like these, and had we not acted quickly to contain the fires and undertake rapid restoration efforts, the impact on the oil market and the global economy would have been far more devastating."
Six days after the assault, which hit at the heart of the Saudi energy industry and intensified a decades-long struggle with arch-rival Iran, the state oil giant invited reporters on Friday to observe the damage and the repair efforts.
Thousands of employees and contractors have been pulled from other projects to work around the clock to bring production back. Aramco is shipping equipment from the United States and Europe to rebuild the damaged facilities, Aramco officials told reporters.
Aramco already brought back part of the lost production and will return to pre-attacks level end of September, Nasser said.
"Not a single shipment to our international customers has been missed or canceled as a result of the attacks, and we will continue to fulfill our mission of providing the energy the world needs," he said in the message seen by Reuters.
Energy Minister Prince Abdulaziz bin Salman said on Tuesday that Saudi Arabia had used its reserves to maintain oil supply flows to customers abroad and inside the kingdom.
Yemen's Houthi group claimed responsibility for the attacks but a US official said they originated from southwestern Iran. Tehran, which supports the Houthis, has denied any involvement in the attacks.
Saudi Arabia says 18 drones and three missiles were fired at Abqaiq, the world's largest oil processing facility, while the Khurais facility was hit by four missiles.
No casualties were reported at either site even while thousands of workers and contractors work and live in the area.
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JEDDAH/DUBAI - The United States has discussed with Saudi Arabia and other Gulf allies possible responses to an attack on Saudi oil facilities they blame on Iran and which US Secretary of State Mike Pompeo described as an act of war on the kingdom.
US President Donald Trump on Wednesday struck a cautious note, saying there were many options short of war with Iran, which denies involvement in the Sept. 14 strikes that initially halved Saudi oil output. He ordered increased sanctions on Tehran.
"This is an attack of a scale we’ve just not seen before," Pompeo told reporters before landing in Jeddah for talks with Crown Prince Mohammed bin Salman. "The Saudis were the nation that were attacked. It was on their soil. It was an act of war against them directly."
The Saudi ambassador to Berlin said "everything is on the table," telling Deutschlandfunk radio that options need to be discussed carefully.
Riyadh, which described the assault as a "test of global will," on Wednesday displayed the remnants of 25 Iranian drones and missiles it said were used in the strike as undeniable evidence of Iranian aggression.
The United Arab Emirates on Thursday followed its main Arab ally Saudi Arabia in announcing it was joining a global maritime security coalition that Washington has been trying to build since a series of explosions on oil tankers in Gulf waters in recent months that were also blamed on Tehran.
Yemen's Iran-aligned Houthi movement, which is battling a Saudi-led military coalition, claimed responsibility for the assault on two Saudi oil plants, including the world's largest processing facility. US and Saudi officials rejected the claim, saying the attack had not come from the south.
The Houthis on Wednesday said they had listed dozens of sites in the UAE, the Middle East's financial and tourism hub, as possible targets, a threat that could further strain a tense political atmosphere in the region.
Fellow Gulf OPEC producer Kuwait, which said earlier this week it was investigating the detection of a drone over its territory, has put its oil sector on high alert and raised security to the highest level as a precautionary measure.
Pompeo headed to the UAE on Thursday for talks with Abu Dhabi's crown prince after meeting Saudi Arabia's de facto ruler Crown Prince Mohammed on Wednesday.
"These subversive attacks aim to destabilize the region's security and damaging the global energy supply and the global economy," state media quoted Prince Mohammed as telling Pompeo.
Oil prices, which soared following the attack, steadied after Saudi Arabia pledged to restore full production by the end of the month.
INTERNATIONAL INVESTIGATION
Proof of Iranian responsibility, and evidence that the attack was launched from Iranian territory, could pressure Riyadh and Washington, which want to curb Iranian influence in the region, into a response. Trump has previously said he does not want war and is coordinating with Gulf and European states.
Pompeo said the attacks would be a major focus of next week's annual UN General Assembly meeting and suggested Riyadh could make its case there.
"There is an international investigation, let's wait for its results," France's foreign minister Jean-Yves Le Drian told C News television, adding that the General Assembly meeting presented an opportunity to de-escalate tensions.
The French army spokesperson said it sent 7 experts to Saudi Arabia to join the investigation. UN officials monitoring sanctions on Iran and Yemen are also helping probe the attack, which exposed gaps in Saudi air defenses despite billions spent on Western military hardware.
US efforts to bring about a UN Security Council response looked unlikely to succeed as Russia and China have veto powers and were expected to shield Iran.
Tehran has said the US accusations were part of Washington's "maximum pressure" policy on the Islamic Republic to force Iran to renegotiate a 2015 nuclear deal with world powers, which Trump exited last year, reimposing sanctions.
Washington and its Gulf allies want Iran to stop supporting regional proxies, including in Yemen, Iraq and Lebanon, as well as to put more limitations on its nuclear and missile programs.
The UAE, Saudi Arabia's main partner in the Western-backed, Sunni Muslim coalition fighting in Yemen, has scaled down its military presence there as rising Iran tensions risk a war in the Gulf and as Western allies pressed for an end to the war.
The conflict, seen as a proxy war between Saudi Arabia and Iran, has killed tens of thousands and pushed millions to the brink of famine. Some Western countries such as Germany have halted weapons sales to Saudi Arabia over the ruinous war.
source: news.abs-cbn.com
WASHINGTON - US Secretary of State Mike Pompeo on Saturday accused Iran of leading attacks on Saudi oil plants that have cut the kingdom's output roughly in half, as he ruled out Yemeni involvement and denounced Tehran for engaging in false diplomacy.
Yemen's Iran-aligned Houthi group claimed credit for the attacks on two plants at the heart of Saudi Arabia's oil industry, including the world's biggest petroleum processing facility.
Pompeo, however, said on Twitter that there was no evidence the attacks came from Yemen.
"Tehran is behind nearly 100 attacks on Saudi Arabia while Rouhani and Zarif pretend to engage in diplomacy," Pompeo said, referring to Iran's President Hassan Rouhani and Foreign Minister Mohammed Javad Zarif.
"Amid all the calls for de-escalation, Iran has now launched an unprecedented attack on the world's energy supply," he added. The State Department declined to provide any evidence to bolster Pompeo's claim.
"We call on all nations to publicly and unequivocally condemn Iran’s attacks," Pompeo said, warning that the Trump administration would work with its allies to make sure Iran was "held accountable for its aggression."
The tweets signaled a more hawkish stance in Washington towards Tehran, following signs of a possible thaw in relations between the two nations after months of escalation.
Last year, U.S. President Donald Trump withdrew the United States from a 2015 pact that aimed to keep a lid on Tehran's nuclear ambitions and he has imposed a series of sanctions that have crippled Iran's economy.
But in recent weeks, Trump has said he would be open to meeting with Rouhani, perhaps on the sidelines of the United National General Assembly in New York later this month. Pompeo has said such talks could take place without any preconditions.
Rouhani, for his part, has said that Tehran, which denies seeking nuclear weapons, would not talk to the United States until Washington lifts the sanctions.
Republican Senator Lindsay Graham, a close Trump ally and a member of the Senate Foreign Relations Committee, said Saturday's attacks showed Iran was not interested in peace and was instead pursuing nuclear weapons and regional dominance.
"It is now time for the U.S. to put on the table an attack on Iranian oil refineries if they continue their provocations or increase nuclear enrichment," Graham said on Twitter.
Others cast doubt on Pompeo's allegations.
"This is such irresponsible simplification and it's how we get into dumb wars," Democratic Senator and committee member Chris Murphy tweeted. "Iran is backing the Houthis and has been a bad actor, but it's just not as simple as Houthis=Iran."
Saturday's attacks follow earlier cross-border attacks on Saudi oil installations and on oil tankers in Gulf waters.
Saudi Arabia, which leads a Sunni Muslim coalition that intervened in Yemen in 2015 against the Houthis, has blamed regional rival Shi'ite Iran for previous attacks. Tehran has denied the allegations. Riyadh also accuses Iran of arming the Houthis, a charge denied both by the group and Tehran.
The White House said the United States was committed to keeping oil markets well-supplied in the wake of the attack and the U.S. Energy Department said the administration could release oil from strategic reserves if necessary.
The attacks on the two facilities cut Saudi Arabia's crude oil supply by around 5.7 million barrels per day or about 50 percent of its output.
source: news.abs-cbn.com
