Saudi Aramco, the world’s biggest oil producer, is studying plans to privatise some of its subsidiaries as well as offering shares in the main business.
The news follows comments made by Deputy Crown Prince Mohammed bin Salman on Thursday that he supported the trillion-dollar company being prepared for an initial public offering (IPO). If the float goes ahead it will be the world’s most valuable quoted company, dwarfing Apple, Exxon and Google.
The moves have astonished the oil sector and led to speculation about whether a share float would change the Saudi strategy of driving down oil prices by refusing to cut back on production.
Analysts believe the world’s most valuable business will attract a lot of interest from potential investors, but warn that the Saudis could underestimate western concerns about Aramco’s traditional secrecy and the impact of falling oil prices.
A statement from the oil group said: “Saudi Aramco confirms that it has been studying various options to allow broad public participation in its equity through the listing in the capital markets of an appropriate percentage of the company’s shares and/or the listing of a bundle its downstream subsidiaries.
“This proposal is consistent with the broad and progressive direction pursued by the Kingdom for reforms, including privatization in various sectors of the Saudi economy and deregulation of markets.’’
Prince Mohammed expected a review of the business, which has reserves of 260bn barrels and 60,000 staff, to be completed within months. Any float could take place after that.
The Saudis have recently introduced a raft of changes to the economy, not least has been a decision to cut subsidies on domestic energy bills and a plan to introduce VAT taxes. Both are considered risky in a conservative country with such fragile democratic credentials.
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