The New Arab Logo

Breaking News
Saudi Arabia names new Aramco chief after IPO delays Open in fullscreen

The New Arab

Saudi Arabia names new Aramco chief after IPO delays

Aramco much-touted IPO is due to take place in 2020 or 2021 [Getty]

Date of publication: 3 September, 2019

Share this page:
  • 0

  • twitter
Saudi Arabia's sovereign wealth fund is the cornerstone of Mohammed bin Salman's planned economic vision.

Saudi Arabia on Monday replaced the chairman of its giant state-owned oil company with the head of the sovereign wealth fund, as a bid to part privatise the Aramco continues to stall.

Yasir al-Rumayyan, governor of the Public Investment Fundon Monday was the new head of Aramco, replacing Energy Minister Khalid al-Falih with media claiming that the much-anticipated initial public offering (IPO) is due to be unveiled.

"I congratulate... Yasir al-Rumayyan, governor of the Public Investment Fund, on his appointment as chairman of the board of directors of Saudi Aramco, which is an important step to prepare the company for the public offering," Falih said on Twitter.

Rumayyan is already an Aramco board member+ and head of the vast Saudi sovereign wealth fund, which is key to Saudi Arabia's plans to diversify the kingdom's oil-reliant economy.

The news comes after Falih, who has long headed both Aramco and the energy ministry, saw his responsibilities shrink following years of economic problems for the kingdom.

Saudi Arabia announced the establishment of a new ministry of industry and mineral resources, separating it from the energy ministry as it steps up efforts to boost non-oil revenue.

"All this shows that in Saudi Arabia there has been some dissatisfaction at the highest levels on how things have been going," Olivier Jakob, from the consultancy Petromatrix, told Bloomberg News.

"Falih has not really fully delivered on oil prices. There's speculation that prices and the IPO are linked and they need higher prices to get the valuation they want for the IPO."

Aramco plans to sell off five percent of the state-owned company in 2020 or 2021, in what could potentially be the world's biggest stock sale, hoping to raise $100 billion based on a $2 trillion valuation of the company.

Investors and analysts have debated whether Aramco is worth that much.

Failure to reach a $2 trillion valuation is meant to be a reason for the delays to the Aramco IPO, earlier scheduled for 2018.

Aramco's first half net income for 2019 slipped nearly 12 percent to $46.9 billion on lower crude prices.

It was the first time the company has published half-year financial results, and comes after Aramco opened its secretive accounts for the first time in April, revealing itself to be the world's most profitable company.

The planned IPO is the centre of Crown Prince Mohammed bin Salman's plans to diversify Saudi Arabia's economy.

Saudi Aramco has not announced where the listing will be held, but London, New York and Hong Kong have all vied for a slice of the much-touted IPO.

The Wall Street Journal reported last week that Aramco is considering a two-stage IPO, with a domestic debut and a subsequent international listing possibly in Tokyo.

The New ArabComments

Most Popular

Most Popular

    Read More