Saudi Aramco says it’s ‘ready’ for IPO as it reports earnings

Oil giant Saudi Aramco is prepared for an initial public offering, its chief financial officer said Monday, reviving the prospects for a longawaited listing that could be a major step toward diversifying Saudi Arabia’s economy.

The stateowned company has been moving toward greater financial transparency as it courts international investors, and the suggestion that it was ready for a public offering came during its first earnings call. The company, the world’s largest oil producer, said earlier in the day that it had generated net income of $46.9 billion in the first half of the year.

Khalid alDabbagh, Saudi Aramco’s senior vice president for finance, strategy and development, said the timing of a public offering would be up to the “shareholder” — the Saudi government — and offered scant insight into when such a listing would happen.

“The company is ready for the IPO,” alDabbagh told analysts, adding that Saudi officials would “announce it depending on their perception of what will be the optimum market conditions.”

He also discussed a newly signed memorandum of agreement with Reliance Industries of India, saying that it would enable Aramco to examine Reliance’s books and that a potential deal between the two companies was “at the very, very early stages.”

“India is a large country with large demand, and it’s a growing demand,” alDabbagh added.

Reliance announced earlier in the day that Aramco was set to buy a 20% stake in its refining and petrochemical business. The stake in Reliance, estimated to be worth $15 billion, would create a partnership between the Saudi kingdom and India’s powerful Ambani family.

AlDabbagh’s comments about the IPO appeared to confirm that Saudi leaders are eager to move ahead, although key decisions remain. Earlier preparations for a share sale were set aside last year as the price of oil fell and the Saudis struggled with questions of valuation and which exchange the company would be listed on.

But after a bond issue this year attracted significant interest from investors, Mohammed bin Salman, the Saudi crown prince and the kingdom’s key policymaker, appears to have decided that officials should resume their preparations for a public offering.

The Saudis also seem to be calculating that international outrage is fading after the killing of journalist Jamal Khashoggi in Turkey last year by Saudi operatives associated with the crown prince.

In the financial disclosure it released Monday, Aramco said its net income had fallen 12%, from $53 billion in the same period a year earlier, when oil prices were higher. The company also said it had earned $66 a barrel for its oil, 4% less than a year earlier.