Saudi mulling IPO for Aramco: report


AFP

RIYADH, Saudi Arabia — Saudi Arabia is considering issuing shares in state-owned oil giant Saudi Aramco, the kingdom’s powerful deputy crown prince told The Economist in a rare interview published Thursday. “That is something that is being reviewed, and we believe a decision will be made over the next few months,” Mohammed bin Salman told the London-based publication after the country posted a record budget deficit due to falling oil prices. “Personally I’m enthusiastic about this step,” which would be in the interests of the market, the company and greater transparency, said the prince. Aramco could not immediately respond to an AFP request for comment. The 30-something son of King Salman chairs the Supreme Council, which has overseen the company since it was separated from the oil ministry last year. He is also defense minister and heads the kingdom’s main economic coordinating council. Saudi Aramco is the world’s largest oil company in terms of crude production and exports. Saudi Arabia, the largest crude exporter, last week reported a record deficit of US$98 billion (90 billion euros) for 2015.

It projected a shortfall of US$87 billion in this year’s budget, with crude prices currently around US$32 a barrel, down from more than US$100 early in 2014. In an unprecedented departure from its decades-old generous welfare system, Riyadh’s budget last week announced rises in fuel, electricity, water and other prices. But Mohammed told The Economist the kingdom is “far” from an economic crisis, because it still has ample reserves and growing non-oil revenues. The dive in oil prices is largely due to Saudi Arabia’s own policies and those of other members of the Organization of the Petroleum Exporting Countries (OPEC). They refuse to cut crude production as they seek to drive less-competitive players, including U.S. shale producers, out of the market.