Saudi Aramco restarts talks on new stock offering

The fresh share sale could raise more money than Aramco’s landmark 2019 initial public offering listing.

The logo of Aramco is seen as security personnel walk before the start of a press conference
Aramco has held talks with advisers on the potential share sale that may bring in more than the $29.4bn Aramco raised from its 2019 IPO, sources told Bloomberg News [File: Hamad I Mohammed/Reuters]

Saudi Arabia has started preliminary discussions on a fresh Aramco stock offering that could raise more money than its landmark listing two years ago, people familiar with the matter said.

The oil giant’s fortunes have shifted dramatically since its record-breaking 2019 initial public offering, which brought more than the $29.4 billion into the kingdom’s coffers. After enduring a painful oil-price slump in the initial stages of the Covid-19 pandemic, producers are now enjoying surging profits as fears of supply scarcity drives crude higher.

The Saudi government, which still owns the majority of Aramco, has held talks with advisers on the potential share sale, which could bring in more than than its initial IPO, the people said, asking not to be named because the matter is private. However, discussions are at an early stage and it hasn’t yet been decided whether to proceed with a listing and no timetables have been set, they said.

Dow Jones reported earlier that Aramco may sell as much as a $50 billion stake, or 2.5% of the company at current prices.

The kingdom’s internal deliberations come as oil trades at a seven-year high above $90 a barrel — an increase of about $30 a barrel since Aramco first offered its shares. But while rallying crude prices have buoyed the company’s financial performance, it hasn’t resulted in higher dividends which may dampen interest among international investors.

When Saudi Arabia first proposed an IPO of Aramco, it had hoped to attract tens of billions of dollars of foreign capital into the kingdom. However, the share sale ended being a local affair, with the company relying on ultra-wealthy Saudis to buy its stock.

Aramco and the Saudi government’s Centre for International Communications didn’t immediately respond to requests for comment.

Source: Bloomberg