Saudi Press

Saudi Arabia and the world
Friday, Aug 22, 2025

Saudi Aramco flotation values oil giant at $1.7tn

Saudi Arabia has placed a preliminary valuation on state oil company Aramco of between $1.6tn (£1.22tn) and $1.7tn.

The company has published an updated prospectus for its initial public offering (IPO), seeking more than $25bn for the sale of 1.5% of its shares.

That would make it potentially the world's biggest IPO, coming from the world's most profitable company

It is short of the $2tn valuation that Crown Prince Mohammed bin Salman was reportedly keen to achieve.

"The base offer size will be 1.5% of the company's outstanding shares," the state-owned energy giant said in a statement that set the price range at 30-32 Saudi riyals per share ($8-$8.5).

That could value the IPO at as much as 96bn riyals ($25.60bn) at the top end of the range.

If priced at the top end, the deal could just beat the record-breaking $25bn raised by Chinese e-commerce giant Alibaba in 2014.

Individual retail investors, as well as big institutions, will have a chance to buy shares.

Aramco had initially been expected to sell some 5% of its shares on two exchanges, with a first listing of 2% on the kingdom's Tadawul bourse, and then another 3% on an overseas exchange.

The firm says there are now no current plans for an international sale, with that long-discussed goal now seemingly being put on ice.

The crown prince is seeking to sell the shares to raise billions of dollars to diversify the Saudi economy away from oil by investing in non-energy industries

Analysts S&P Global Ratings said the stock market debut could enable Saudi Arabia to strengthen its financial position.

"If subsequently effectively deployed, the funds raised could be used to support longer-term economic growth in Saudi Arabia," it said.

In its prospectus released last week, the company lists a variety of investment risks ranging from terrorist attacks to geopolitical tensions in a region dominated by Saudi-Iran rivalry.

The 600-page prospectus also includes the government's control over oil output as another potential risk.

After the flotation, Aramco will not list any more shares for six months, the prospectus says. Although one of the attractions for investors is the potential of high dividends, the document said Aramco has the right to change dividend policy without prior notice.

Aramco has hired a host of international banking giants including Citibank, Credit Suisse and HSBC as financial advisers to assess interest in the share sale and set a price. Based on the level of interest.

The sale of the company, first mooted four years ago, has been overshadowed by delays and criticism of corporate transparency at Saudi Arabia's crown jewel.

Aramco last year posted $111bn in net profit. In the first nine months of this year, its net profit dropped 18% to $68bn.

A third of Aramco's shares - about $8bn worth - will be sold to the man and (the prospectus says) even the divorced woman on the street, giving local Saudi Arabians a stake in their nation's cash cow for the first time.

A TV and billboard advertising campaign, as well as social media, is stoking enthusiasm on the ground and demand is expected to be high. For the remaining $16bn, the oil giant is turning to institutional investors.

And a source close to the company says there has been sufficient interest that they're confident they can cover most of this off within the Gulf. But there will be disappointment amongst officials if global demand is not there for the jewel in Saudi Arabia's crown.

A fossil fuels company owned by an absolute monarchy in a volatile region are not an easy sell for many Western firms, pursuing the latest trend in investment policy of "ESG" (Environmental, Social and Governance) criteria.

Norway's sovereign wealth fund is among those to already rule themselves out from investing.

But the promise of sharing the promised annual $75bn cash dividend pot might be too good for some to miss, according to James Bevan, Chief Investment Officer at CCLA Investment Management (one of the UK's largest charity fund managers).

Given his firm's focus, he is not looking to invest in the shares but explains why some are. "It's a 'risk' in the eyes of some investors to be very underweight in oil and gas, and Aramco may be a means of plugging a sector gap with perhaps less worry than associated with holding Gazprom," he says.

Investors follow indixes - such as the FTSE 100 - which are made up of array of types of industries and so some feel oil and gas needs to be correspondingly represented in their portfolio.

As Aramco's big sales pitch road show kicks off, the real test of investor appetite for the company will begin.

Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Cristiano Ronaldo Makes Surprise Stop at New Hong Kong Museum
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
High-Stakes Trump-Putin Summit on Ukraine Underway in Alaska
Iranian Protection Offers Chinese Vehicle Shipments a Cost Advantage over Japanese and Korean Makers
Saudi Arabia accelerates renewables to curb domestic oil use
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Private Welsh island with 19th-century fort listed for sale at over £3 million
Sam Altman challenges Elon Musk with plans for Neuralink rival
Australia to Recognize the State of Palestine at UN Assembly
The Collapse of the Programmer Dream: AI Experts Now the Real High-Earners
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Nine people have been hospitalized and dozens of salmonella cases have been reported after an outbreak of infections linked to certain brands of pistachios and pistachio-containing products, according to the Public Health Agency of Canada
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
Tariffs, AI, and the Shifting U.S. Macro Landscape: Navigating a New Economic Regime
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
OpenAI’s Bold Bet: Teaching AI to Think, Not Just Chat
BP’s Largest Oil and Gas Find in 25 Years Uncovered Offshore Brazil
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
Trump Deploys Nuclear Submarines After Threats from Former Russian President Medvedev
Germany’s Economic Breakdown and the Return of Militarization: From Industrial Collapse to a New Offensive Strategy
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Russia Formally Recognizes Taliban Government in Afghanistan
×