Amin H. Nasser, President and CEO of Saudi Aramco, speaks during a news conference at the Plaza Conference Center in Dhahran, Saudi Arabia, November 3, 2019.
Hamad Mohammed | Reuters
Saudi Aramco has set a price range for its listing that suggests the oil giant is worth between $ 1.6 trillion to $ 1.7 trillion, below the $ 2 trillion previously targeted by the Saudi crown prince, making it the world's largest IPO. [1
Aramco could only beat the record-breaking $ 25 billion raised by Chinese e-commerce giant Alibaba when it debuted on the New York stock market in 2014.
Aramco's listing will take place in December and the company said last weekend that it will to sell up to 0.5% of its shares to individual investors. Speculation and delayed announcements on the public listing of the world's most profitable companies have riveted investors and market watchers since plans for the float were first disclosed three years ago.
The oil giant has delayed the IPO – originally scheduled for 2018 – several times, citing Saudi concerns about public scrutiny of its finances and the complexity of its corporate structure.
The company's valuations of the company have ranged from $ 1.2 trillion to $ 2.3 trillion. By comparison, Aramco's closest US rival, Exxon Mobil, has a market value of nearly $ 300 billion and Chevron is valued at about $ 229 billion. When the IPO was first flagged in 2016 by the now Crown Prince Mohammed bin Salman, he then said that he believed the company was worth about $ 2 trillion.
The Aramco listing would aim to drum up cash for a government that wants to reduce the budget deficit and diversify its economy beyond oil as part of the Crown Prince's Vision 2030 program.
The country's economy is still largely dependent on oil exports. Lack of oil prices (a barrel of Brent crude oil is currently priced close to $ 63) has caused the country's budget deficit (the amount its spending exceeds its revenues) to increase.
In 2018, the budget deficit was estimated to be about SEK 136 billion (or about $ 36 billion), according to the UK's Ministry of Finance. It is expected to be a similar amount in 2019. And by 2020, the UK expects the deficit to increase to $ 50 billion, the Kingdom's finance minister said in October, according to Reuters.
—NBC's Natasha Turak, Holly Ellyatt, and Joanna Tan contributed to this article.