‘Impossible to proceed’ with Aramco IPO as investors fear ongoing attacks on Saudi oil facilities
- Aramco officials are growing less optimistic about a rapid recovery in oil production, sources say
- Analysts now see a US$1.5 trillion valuation for Aramco as more realistic, down from US$2 trillion as desired by Saudi Crown Prince Mohammed bin Salman
As Saudi Aramco presses on with plans to pitch its initial public offering to analysts, strikes on key oil facilities has heightened investor fears about the prospect of more attacks in the future.
“They are the best assets in the world but I have no interest in owning Aramco given the security risks,” said Ben Cleary, Asia chief executive officer at Tribeca Investment Partners. “The issues in the Gulf don’t seem like they are going any time soon.”
In an attack blamed by the US on Iran, a swarm of drones laden with explosives set the world’s biggest crude-processing plant ablaze, cutting the kingdom’s oil production in half. Iran denied responsibility, which was instead claimed by Iranian-backed Houthi rebels in Yemen. Houthis on Monday threatened more attacks on oil installations in Saudi Arabia.
The sprawling state-owned company controls one-fifth of the globe’s petroleum reserves and pumps more crude than the top four publicly-traded oil companies combined. Aramco officials are growing less optimistic about a rapid recovery in oil production, a person with knowledge of the matter said.
Crown Prince Mohammed bin Salman, the architect of the IPO, said he expects Aramco to be valued at over US$2 trillion.
