Saudi Aramco possible IPO 'is not for cash,' chariman says

RIYADH, Saudi Arabia -- The chairman of Saudi Arabia's state oil giant said on Monday that plans for a possible initial public offering are not being driven by a need for cash amid a global slump in oil prices, but instead signal a desire for greater openness to outside investors.

See Full Article

Speaking at an investment conference in the Saudi capital of Riyadh, Khalid al-Falih said the potential listing of the world's largest oil producer "is not for cash" but a "sign of the times" that the kingdom is open for business.

"If we do it, the percentage will not be such that it's going to move the needle significantly in terms of the government proceeds," al-Falih said, a reference to the potential listing.

He said that despite oil prices recently dipping below $30 a barrel, Saudi Aramco's investments in oil and gas have not slowed down.

Earlier, al-Falih told the Saudi-owned Al-Arabiya news channel that any initial public offering of Saudi Aramco would not include the kingdom's oil reserves.

Saudi Arabia has aggressively kept its production levels high in what analysts say is an attempt to keep its market share and stymie the reach of U.S. shale producers in the global market.

Talking to reporters at the conference, al-Falih said excessively high oil prices "precipitated" the current slump since "everybody wanted to contribute to supply more than the demand that was coming in."

He said Saudi Arabia has the scale and capability to sustain the current slump in prices for "a long, long time" but that "obviously, we don't wish for lower prices."

With around 80 per cent of Saudi government revenues generated from oil, the kingdom has projected a budget shortfall of $87 billion in 2016. To diversify its economy away from oil, Saudi Arabia is undertaking urgent economic reforms, including a privatization initiative that is partly driving the possible listing of some of Saudi Aramco's services.

"The fact that the crown jewel of the kingdom ... the company that has been generating the predominant income to the treasury of the kingdom of Saudi Arabia is being considered to be taken to the stock market, I think is a sign of the confidence the kingdom has in its enterprises," al-Falih said.



Advertisements

Latest Economic News

  • Asian stocks down as multiple trade disputes worry investors

    Economic CTV News
    SEOUL, Korea, Republic Of - Asian stocks fell Friday following Wall Street losses overnight as investors were still wary over trade disputes between China and the U.S. as well as between the U.S. and Europe that could hurt corporate profit and jobs. Source
  • Canada launches second drywall dumping complaint investigation in two years

    Economic CTV News
    CALGARY -- A Canadian drywall manufacturer has launched its second trade complaint in two years alleging that the building panels are being dumped by U.S. competitors at unfair prices. The Canada Border Services Agency says it is investigating the complaint by CertainTeed Gypsum Canada Inc. Source
  • Chinese startup electric automaker picks BlackBerry for key software licences

    Economic CTV News
    WATERLOO, Ont. - A Chinese automaker that wants to bring out a line of electric cars with some self-driving capabilities has selected BlackBerry Ltd. to provide software designed to ensure critical systems can run safely at all times. Source
  • A&W Canada to put plant-based burger on menu

    Economic CTV News
    A&W will become the first national burger chain in Canada to put the much-hyped plant-based burger on its menu. The fast food chain has struck a partnership with Beyond Meat that will bring the plant-based burgers to its 925 locations across Canada starting July 9. Source
  • Doug Ford says he will keep Pickering plant open until 2024 as promised

    Economic CTV News
    PICKERING, Ont. -- Doug Ford says he is delivering on his campaign promise to keep the Pickering Nuclear Generating Station open until 2024. In a news conference at the generating station this morning, the premier-designate said the move would protect thousands of jobs. Source
  • Construction commission seeking order forcing Quebec crane operators back to work

    Economic CTV News
    MONTREAL -- Quebec's construction commission is seeking an order from a labour tribunal that would force the province's crane operators back to work. The tribunal began hearing arguments from both sides of the conflict today. Source
  • Tribunal orders Quebec crane operators ordered back to work

    Economic CTV News
    MONTREAL -- Quebec's crane operators are being ordered back to work. A labour tribunal hearing ruled Thursday evening in favour of an order sought by the province's construction commission, forcing workers to end any work stoppage or slowdown tactics. Source
  • Bombardier pouring millions into creation of GTA aerospace hub

    Economic CTV News
    TORONTO -- Bombardier says it will be pouring millions of dollars into various projects aimed at creating an aerospace hub in the Greater Toronto Area. The aerospace giant says the funding strengthens its partnership with a local consortium whose primary goal is getting the hub established. Source
  • B.C. government intends to crack down on hidden ownership of real estate

    Economic CTV News
    VICTORIA - The British Columbia government is taking steps to end opportunities to anonymously invest and hide wealth in real estate. Finance Minister Carole James says a new, publicly accessible registry is being created to identify the owners of real estate in the province. Source
  • OPEC enters meeting that could set direction of oil prices

    Economic CTV News
    Officials from major oil-producing nations are expected to agree this week to boost output, but just how much they will open the spigot -- and the effect on oil prices -- remain wild cards. Ministers from the Organization of the Petroleum Exporting Countries and non-OPEC nations led by Russia are meeting Friday and Saturday in Vienna, and it could be a difficult and uncomfortable gathering. Source