Speculation arises on Aramco’s plans for IPO, China interested in direct deal

Some media reports claimed that the state-owned Saudi Aramco is considering shelving its plans to offer its shares to public for the second half of next year, although the company refused this claim, describing them as entirely speculative. “The IPO process remains on track,” Saudi Aramco said in a statement.

The company had previously announced their plans to sell 5% of the shares to raise as much as $100 billion in return. The money raised was expected to be put in use to realize Saudi Arabia’s economic project Vision 2030.

However, late last week Financial Times put forth that the Saudi government is now considering a private sale of its shares instead of the planned public sale. The company is reportedly mulling over selling its stakes to private investors and wealth funds to avoid facing challenges with public listings.

Upon these speculations, Chinese state-owned oil companies PetroChina and Sinopec expressed their interest in buying the whole 5% of the shares, the media reported early in the week.

According to sources, shelving the plan for the IPO will have advantages and disadvantages. The company is reportedly in the process of evaluating whether to prefer listing in New York or London, with some sources pointing out to the concern that Saudi Arabia might have troubles engaging in coordinated production cuts within OPEC if it listed in New York, a practice that might be considered price fixing, and thus illegal.