Most Valuable Oil Company Aramco Considers Raising $50B Via Stock Sale

Saudi Arabia's plans to list more shares of Aramco, the world's most valuable oil company, have resurfaced. 

The kingdom is reportedly considering selling up to $50 billion worth of shares, which could be the largest offering in capital market history. 

Saudi Arabia has decided to host this offering on the Riyadh exchange to mitigate legal risks associated with international listings based on consultations with advisors. 

The launch of these shares may occur before the year's end, Wall Street Journal reported, citing insiders.

Aramco has been in talks with potential investors, including multinational oil companies and sovereign-wealth funds. 

In the past year, Aramco had considered additional share sales on the Riyadh stock exchange and secondary listings in locations like London or Singapore. 

However, unfavorable market conditions led to the abandonment of those plans.

Achieving such a substantial offering could be challenging, considering that Aramco's previous record-setting IPO in 2019 raised $29.4 billion on the Saudi stock exchange. 

The Ant Group's IPO exceeded that amount in 2020, raising over $34 billion. 

It's important to note that the 2019 listing was a scaled-back version of Aramco's initial ambitions, which aimed to sell 5% of the company for as much as $100 billion, including on a major international exchange. 

However, governance concerns and share pricing led to caution from international investors, resulting in a domestic-only IPO that listed only 1.5% of the company.

In May, Bloomberg reported Saudi Arabia's consideration of additional share sales, aligning with the kingdom's long-standing strategy to divest portions of the oil giant. 

This strategy is part of Crown Prince Mohammed bin Salman's broader plan to capitalize on the nation's vast oil assets and reinvest the proceeds in non-oil industries.