Saudi oil minister vows transparency in run up to Aramco IPO

Published November 17th, 2016 - 08:30 GMT
Since the nationalization of Aramco in the 1980s, Saudi Arabia has consistently said the country’s proven oil reserves stand at 260 billion barrels. (File photo)
Since the nationalization of Aramco in the 1980s, Saudi Arabia has consistently said the country’s proven oil reserves stand at 260 billion barrels. (File photo)

The planned listing of state-owned oil giant Saudi Arabia will include information on the extent of the kingdom’s oil reserves, according to reports.

Saudi energy minister Khalid al-Falih told the Financial Times the initial public offering (IPO) would be the “the most transparent national oil company listing of all time.”

Since the nationalisation of Aramco in the 1980s, Saudi Arabia has consistently said the country’s proven oil reserves stand at 260 billion barrels.

But a lack of independent verification has left many to wonder if the country is sitting on significantly more or less oil than stated.

Speaking to the publication, Al-Falih said third parties would independently verify everything disclosed by Aramco during the IPO, including “reserves, costs, profitability indicators”.

The 5 per cent listing, which is planned for 2018, is expected to value the company at more than $2tn.

However, Saudi’s oil reserves are not expected to be part of the sale and the state will maintain sovereign right over their management.

Al-Falih indicated the funds could transform Saudi Aramco into a company similar to US industrial conglomerate General Electric covering multiple sectors such as aerospace, healthcare and lighting.

Saudi Aramco can be multiples of GE if we put our mind to it,” he said indicating the listing could help the firm enter other sectors including robotics and the internet of things.

Separately the energy minister said the country was close to finalising a tender to significantly increase its use of renewable energy.

Saudi Arabia plans to install nearly 10GW of solar, wind and other clean power by 2023 to meet 10 per cent of peak demand.

This could rise to 30 per cent through a mix of renewables and nuclear power, he said, but suggested there were no imminent plans to build a nuclear plant.

 

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