Aramco, the Saudi Arabian oil super giant has managed to obtain a multi-dollar listing through only a part of its total corporate heft. The oil super giant is now all set to become the largest oil company in the world.
New York, NY, USA, May 21, 2016 — More recently, the Saudi government also declared that it is planning to sell out a 5% stake in its state oil company. The government is doing this with the intention of boosting its staggering economy. It plans to dedicate its $3 trillion sovereign fund for this purpose.
The Saudi economy will get a major boost from the Aramco deal which will produce anywhere between $2 trillion to $2.5 trillion. This is being hailed as the biggest stock market flotation in history.
Armaco is the only oil producer in Saudi Arabia, a country which is the biggest producer of oil in the world. For this very reason, Aramco exerts huge influence in the global oil markets.
According to statistics, Aramco produces 12 million barrels a day — one in every nine barrels is produced by Aramco. Aramco’s crude oil production capacity is unmatched by any other company in the world. It is believed that in a situation of hypothetical supply disruption, the Saudi Arabian oil giant is capable of solely stabilizing the global oil market.
However, global investors are already pondering over the actual worth of this Saudi Arabian oil giant. If economists and analysts go by the words of Mohammad bin Salman, the deputy crown Prince of Saudi Arabia, Aramco will easily rout Exxon Mobil, another oil giant who’s estimated worth is close to $350 billion. As a matter of fact, the net value of Aramco will leave behind the combined net value of Apple, Exxon, Berkshire Hathaway and Google.
The net value figures of Aramco are mind-blowing. If the company plans to sell 20 percent of its shares, it will raise $400 billion. This figure is capable of changing the face of Saudi stock market.
Stuart Poulson, Head of Corporate Trading at Nikko Desjardins Asset Management says, “Aramco might actually be worth all that money. It is a well-known fact that the company’s oil reserves are vast. Aramco’s 5 percent may be worth around $2 trillion because the cost of oil production is quite low in Saudi Arabia. Aramco spends only about $2 to produce a barrel of oil.”
Saudi Arabia is the one of the few countries that have managed to drive profits from oil production even after prices fell.
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Nikko-Desjardins Asset Management