Is Saudi Aramco Going To Cancel International IPO Plans?

After all of the hype, it appears that Saudi Aramco is now contemplating cancelling its plans for an international IPO. The IPO would be replaced with a private share sale to world sovereign funds and institutional investors — which would allow the state-owned company to get around requirements to fully disclose (publicly) data on oil reserves that it may not wish to disclose.

According to unnamed people “familiar with the matter” quoted by the Financial Times, Saudi Aramco is now in talks with a number of foreign governments as well, including China, about a possible private sale.

Regardless of any possible private sales, though, Saudi Aramco is reportedly still planning on listing shares on Saudi Arabia’s Tadawul stock exchange next year — according to the unnamed sources, that is. (The original plan was to list there and on the London Stock Exchange in 2018.)

In response to a query from Reuters about the matter, a Saudi Aramco spokesman stated: “A range of options, for the public listing of Saudi Aramco, continue to be held under active review. No decision has been made and the IPO process remains on track.”

Reuters provides more: “No final decision has yet been made and an international listing could still occur next year, the FT reported … Saudi Aramco had formally appointed JPMorgan Chase & Co, Morgan Stanley and HSBC as international financial advisers for its initial public offering, sources familiar with the matter had told Reuters in March.

“Both JPMorgan and Morgan Stanley declined to comment. A plan to list Aramco in 2018 was on track, senior Saudi officials had said in Moscow earlier this month.”

Even if the Saudi Aramco stock is not listed on the London Stock Exchange in 2018, the plan could shift to doing that in a later year. However, the further out an IPO plan goes, the less likely it seems.

It’s hard at this point to say what’s going on exactly, but I can’t help but wonder if Saudi Aramco officials simply aren’t keen to disclose how much of its reserves actually remain and/or are viable. Maybe it was supposed that certain aspects of the business and figures could be glossed over, and now it’s become apparent that that isn’t possible?

Related: Saudi Arabia: Fossil Fuels Are Cleaner … Wait, What? (Exclusive Video)