Saudi Arabia will retain full ownership of its oil and gas reserves and sole decision-making authority on production levels after Saudi Arabian Oil Co’s long-awaited initial public offering, Deputy Crown Prince Mohammed bin Salman said in interview Tuesday on state-run television.
Aramco, the world’s largest oil-exporting company, holds a concession to pump the kingdom’s oil and gas, and a stake in that venture is what will be sold in the offering of “not far from 5 percent” of its shares in 2018, the prince said. Analysts at Sanford C Bernstein & Co and Rystad Energy AS in March said the offering had a potential market value above $1 trillion.
“The wells will still be owned by the government,” said the deputy crown prince, the son of King Salman bin Abdulaziz. “The company only has the right to benefit from the wells. This is the same as before and there are no changes to that.”
Production decisions will remain subject to OPEC policies and the global supply and demand balance, the prince said.
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Proceeds from the offering will enlarge the kingdom’s sovereign wealth fund, and at least half have been earmarked to develop local industries such as mining, he said. The prince said last year that he expects the company to have a value of at least $2 trillion, but Sanford Bernstein put it at $1 trillion to $1.5 trillion in March, and Rystad estimated it at $1.4 trillion, assuming a long-term oil price of $75 a barrel.
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The prince said plans to sell shares in state-owned Aramco date back to the time of his grandfather, the founder of modern Saudi Arabia.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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