Saudi Aramco announces IPO on domestic stock exchange

Saudi Arabias state-run oil giant Aramco started its initial public offering on Sunday and announced that it would begin trading on the domestic stock exchange, the Tadawul, in early December.

"Saudi Aramco confirms its intention to list on Tadawul, the Saudi National Stock Exchange," the oil company tweeted.

The final price offering remains unknown but Aramco Chairman Yasser al-Rumayyan said that reports from national and international analysts were to be prepared to determine a price range.

The President and Chief Executive of Aramco Amin Nasser said that the board intended to pay $75 billion in dividends for investors in 2020.

The Saudi Capital Market Authority (CMA) announced its approval for Aramco's share offering earlier in the day and added that the application will be valid for six months from its Board resolution date.

Aramco pointed out that it achieved a net income of $68 billion during the past nine months, ending on September 30.

Aramco's IPO is one of the main elements of the Vision 2030 launched by Crown Prince Mohammed bin Salman to diversify the Saudi economy.

He first suggested the share sale in 2016 but it has been delayed several times since then.

Aramco, which pumps 10 per cent of the world's oil, has been the backbone of the Kingdom's economic stability since it was nationalized in the 1970s.

The oil giant disclosed its financial results for the first time in history in August, saying it achieved a net profit income of $46.9 billion during the first half of 2019, 11.3 per cent less compared to the same period last year.

Saudi Aramco traces its roots to 1933 when a deal was struck between Saudi Arabia and the Standard Oil Company of California, which later became Chevron, to survey and drill for oil, creating a new firm to do so, the BBC reported.

Between 1973 and 1980, Saudi Arabia bought the whole company.

Saudi Arabia has the second-biggest oil reserves after Venezuela, according to the Energy Information Administration.

It is also second in production, after the US. But Aramco gets its prominence because it has the monopoly on all that oil in the country, and because of how cheap it is to extract.

( With inputs from IANS )