S Arabia approves listing of energy giant Aramco

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. 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.