Saudi Aramco 'weighs' IPO for its trading unit as oil prices soar

Follow us on Google News:
 Saudi Aramco 'weighs' IPO for its trading unit as oil prices soar
Image source: © Rarrarorro | Megapixl.com

Highlights

  • The state-controlled oil giant Saudi Aramco weighs an initial public offering (IPO) for its trading unit. 
  • The company is working with Goldman Sachs Group Inc., JPMorgan Chase & Co., and Morgan Stanley for its offering.
  • Aramco may sell 30% of its stake in the division, making it one of the biggest IPOs this year.

State-controlled oil giant Saudi Aramco is weighing an initial public offering (IPO) for its trading unit, Bloomberg reported on Tuesday, citing people familiar with the matter.

The company is exploring a potential listing of Aramco Trading Co. It could be one of the biggest IPOs this year. Saudi Aramco is working with Goldman Sachs Group Inc., JPMorgan Chase & Co., and Morgan Stanley for its offering, the sources told Bloomberg.

The Aramco Trading Co. could be valued at tens of billions of dollars after the IPO. 

The company may sell up to 30% of its stake in the division. However, it is still considering the plan. The size of the IPO and the timing of the listing are also not immediately known.  

As uncertainties hit the global energy market due to the Ukraine war, Middle East energy firms are weighing possible stock listings to attract foreign investors in a bid to re-energize the sector.

Bloomberg reported that Aramco was considering listing its refining arm Luberef in April. 

Also Read: WM to CWST: 5 recycling stocks to watch as climate takes center stage

Saudi Aramco weighs IPO for its trading unit as oil prices soar

Also Read: NVDA to AMD: Will these 5 semiconductor stocks ride out supply crunch?

Aramco’s trading unit for crude oil, LNG, and other related products was established in 2011. 

With the soaring oil prices, oil companies see the Middle East region as a bright spot for IPOs. However, IPOs haven’t been very successful this year compared to last year in most economies.

Also Read: SND to PVL: Five penny energy stocks to watch in Q2

The Middle East market has been relatively less volatile, and it may have been one of the key factors drawing the attention of global investors. 

Aramco was listed on the Saudi stock exchange in 2019. On May 15, it reported its highest profit since its stock market listing, driven by the skyrocketing oil prices. Its net income rose more than 80% in the first quarter of 2022 to US$39.5 billion.

Also Read: Top metal & mining stocks to explore: FNV, WPM, NEM, VALE, & GOLD

Bottom line:

Last week, Saudi Aramco became the world’s most valuable company after it surpassed the tech giant Apple Inc’s market capitalization to US$2.4 trillion. With the constant increase in oil prices this year, Saudi Arabia saw its fastest economic growth in a decade.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media LLC (Kalkine Media, we or us) and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures/music displayed/used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it, as necessary.

Featured Articles