Despite the company's efforts to assure traders it's on the road to a rapid recovery, Reuters sources claim the launch of Saudi Aramco's IPO is a way off
Saudi Aramco will likely delay the release of its initial public offering (IPO) following the drone attacks on two of its key oil facilities earlier this month, according to Reuters sources.
The global oil and gas sector has been anticipating the state-owned giant going public for some time, with the release of its debut bond in April this year confirming its status as the world’s most profitable company.
Its chairman Yassir al-Rumayyan said publicly after the attacks on the Abqaiq and Khurais projects, that the IPO would launch within one year. It had previously been slated for 2020 or 2021, but Reuters’ sources now suggest it could be later still.
Reportedly armed with a “direct knowledge of the company’s thinking”, the sources told the news agency that Saudi Aramco “needs to build confidence — in addition to restoring production”.
Saudi Aramco IPO contingent on production recovery
Saudi Arabia’s energy minister last week assured traders his country’s oil production will be back to normal by the end of September, after drone strikes on two key facilities created uncertainty across the Asian oil market.
Prince Abdulaziz bin Salman said half the production lost as a result of the attacks had already been recovered, with a statement that provided relief for global oil markets, which saw price dips of up to 7% on 17 September.
Speaking alongside the 59-year-old prince, Saudi Aramco’s CEO Amin Nasser also looked to quell fears over potential supply issues and assure the increasingly anxious industry his firm will recover.
He said: “These synchronised attacks were timed to create maximum damage to our facilities and operations.
“The rapid response and resilience demonstrated in the face of such adversity shows the company’s preparedness to deal with threats aimed at sabotaging Aramco’s supply of energy to the world.
“We have a hard-earned reputation for nearly 100% reliability in terms of meeting our international customers’ requirements and we have defended that.
“Not a single shipment to an international customer has been or will be missed or cancelled as a result of these attacks.
“We have proven that we are operationally resilient and have confirmed our reputation as the world’s leading supplier.”
Debut bond creates anticipation for IPO
Saudi Aramco took its place as the world’s most profitable company on 1 April, when it released its debut bond, and has been expanding ever since with a flurry of acquisitions.
The oil and gas giant generated a gargantuan $111bn (£85bn) last year, comfortably topping second-placed Apple ($59.5bn – £45.6bn), which became the first company to be valued at more than $1tn (£770bn) in August.
Samsung, Google’s parent company Alphabet, and JP Morgan Chase came third, fourth and fifth with $35.1bn (£26.9bn), $30.7bn (£23.5bn) and $30.7bn (£23.5bn), respectively, while Aramco’s industry rivals Shell and Exxon Mobil took home little over $20bn (£15.4bn) apiece.