Save for later Print Download Share Saudi Aramco has delayed its IPO again, as investors ask tough questions about its financial obligations and its security risks. Aramco could be valued between $1.1-1.3 trillion, according to 博彩对冲 calculations鈥攚ell below the crown prince鈥檚 original target. A listing of at least 2% of Aramco on the domestic Tadawul exchange has been postponed until November or later, as the company makes its pitch to cornerstone investors. The timing is hardly ideal for the giant IPO, given softer oil prices and cooling sentiment toward oil equities, but market conditions seem unlikely to improve anytime soon. Aramco plans to follow the domestic listing with an international IPO, although a New York or London listing would create litigation exposure. Aramco recently promised a base dividend of $75 billion for 2020, seeking to assure investors of a healthy payout ratio. The government also cut the company鈥檚 royalty rate at oil prices below $70/bbl. Still, investors are wary of the company鈥檚 financial obligations to the state, as well as its vulnerability to future attacks on its facilities. In its annual Aramco corporate strategy profile, 博彩对冲 estimates a potential valuation of the company at $1.28 trillion, based on a Brent price of $60/bbl and production at 10 million b/d. The valuation is based on a free cash flow yield average for H1鈥�19 for the supermajors plus Equinor, Rosneft and PetroChina. 鈥淪audi Arabia is determined to push ahead with the IPO, but there is still a disconnect between investor demands and government expectations,鈥� says Ben Cahill, Director with 博彩对冲鈥檚 Research & Advisory division in Washington, D.C. 鈥淎ramco is on the back foot, especially in convincing investors that it should enjoy a premium to the supermajors.鈥� 博彩对冲 is the leading independent provider of news, unbiased analysis and reliable data and research for the global energy industry. The Research & Advisory group at 博彩对冲 has just issued a new corporate strategy profile which examines Aramco鈥檚 core segment strategies, including oil expansion projects, development of domestic natural gas resources, as well as newer ventures in LNG, downstream and petrochemicals.-ENDS-Note to Editors: For more details on 博彩对冲鈥檚 Saudi Aramco analysis, please contact: Ben Cahill Director, Research & Advisory, 博彩对冲 +1 (202) 662-0707 | bcahill@energyintel.com Click here to download a complimentary copy of the Executive Summary on Aramco鈥檚 IPO challenges, earnings forecast and valuation.
