As the launch date for Saudi Aramco’s initial public offering (IPO) approaches, officials in Riyadh are reportedly making a last-ditch effort to secure a valuation of $2 trillion for the company. Reuters reported on November 1 that representatives of the Saudi national oil company (NOC) and its advisors were in talks with investors with the aim of reaching that target figure.
Crown Prince Mohammed Bin Salman has been insistent that Saudi Aramco is worth a total of $2 trillion. Other observers have argued, though, that $1.5 trillion is a more realistic figure.
Since the NOC is the biggest single oil producer in the world, the stakes in this argument are high. If the prince’s $2 trillion estimate is correct, the IPO could raise $20-40 billion through the sale of 1-2% of stock in Saudi Aramco, but if the lower figure were more accurate, the proceeds of the stock issue would be $15-30 billion.
This is why company officials are so eager to make their case to investors ahead of the IPO, sources told Reuters anonymously. “Aramco’s officials and advisers are still on the road,” said one source, who was identified only as a major institutional investor.