Saudi Aramco

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Group.png Saudi Aramco  
(Oil companySourcewatch WebsiteRdf-entity.pngRdf-icon.png
HeadquartersDhahran, Saudi Arabia
Member ofWEF/Strategic Partners

State-owned Saudi Aramco, formerly Saudi Arabian-American Oil Company, is the world's biggest oil and gas company based in Dhahran, Saudi Arabia.[1]

On 11 December 2019, when three billion of Saudi Aramco's 200bn shares were offered for sale to investors on Riyadh’s Tadawul stock exchange, Saudi Aramco became the world’s biggest listed company as its shares rose 10% on the first day of trading, valuing it at $1.87tn.[2]

The float was marketed almost exclusively in Saudi Arabia and across the Middle East having received a tepid response from international investors, who were wary of Aramco’s close ties to the Saudi regime amid human rights concerns after the murder of the dissident journalist Jamal Khashoggi. Middle Eastern state funds and wealthy Saudi families were therefore encouraged to support the initial public offering (IPO). International investment funds are expected to buy Saudi Aramco shares as they start to figure in global emerging markets indices.[3]

Second largest oil reserves

Saudi Aramco has both the world's second-largest proven crude oil reserves, at more than 260 billion barrels (4.1×1010 m3), and second-largest daily oil production. [4]

Headquartered in Dhahran, Saudi Arabia,[5] Saudi Aramco operates the world's largest single hydrocarbon network, the Master Gas System. Its 2013 crude oil production total was 3.4 billion barrels (540,000,000 m3), and it manages over one hundred oil and gas fields in Saudi Arabia, including 288.4 trillion standard cubic feet (scf) of natural gas reserves.

Saudi Aramco operates the Ghawar Field, the world's largest onshore oil field, and the Safaniya Field, the world's largest offshore oil field.[6]

UK's $2bn sweetener

On 14 November 2017, Labour's John McDonnell wrote to UK Chancellor Philip Hammond calling for more transparency over the Government's attempts to secure the listing of Saudi Aramco in London. It comes after it emerged on 9 November 2017 that the UK Government had offered Saudi Aramco a $2bn (£1.5bn) loan guarantee amid a tightening race to host what could be the world's largest IPO.[7]

In the letter, seen by The Daily Telegraph and sent on Tuesday, Shadow Chancellor McDonnell said a "number of questions have arisen from the Government's reported attempts to secure London as the location of the scheduled IPO of 5 percent of that business".

He asked "on what grounds and based on what evidence" had the Treasury assessed that guaranteeing the loan would be in the interests of the British public, and questioned whether the decision to offer the loan guarantee was in any way influenced by attempts to secure the Saudi Aramco offering.

John McDonnell called for all correspondence between Philip Hammond, his cabinet colleagues and Treasury officials and UK Export Finance, the body which provided the credit guarantee, to be published, and asked whether any of the cabinet had made representations to the Financial Conduct Authority (FCA) or London Stock Exchange (LSE) for a loosening of regulations.

This relates to proposals put forward by the FCA to tweak UK listing rules to attract more state-ruled companies to list in London.[8]

The change would allow Saudi Aramco to apply for a special category of premium listing which would have less onerous regulatory requirements, but would not require it to float the 25 percent normally sought for a premium listing.

The Treasury had earlier denied reports the loan was linked to efforts to secure the float, and said it was instead going to be used to enable Saudi Aramco to buy more from the UK.[9]


Related Document

TitleTypePublication dateAuthor(s)Description
Document:The Paradise Papers and HSBC. WhoArticle14 November 2017Nicholas WilsonThe corruption surrounding Theresa May's seduction of Saudi Aramco to hold its stock market launch (IPO) at the London Stock Exchange next year has involved bribes, lobbying for HSBC and changing the rules by the FCA
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