Save for later Print Download Share At current prices and production volumes, Saudi Aramco could be valued at $1.3 trillion, according to 博彩对冲 calculations鈥攚ell below Crown Prince Mohammed bin Salman鈥檚 original target, but perhaps enough to satisfy skeptics at home. Even $100 oil would not deliver a $2 trillion valuation. The Saudi Aramco IPO signals Saudi Arabia鈥檚 intent to modernize the Kingdom, as outlined in the Vision 2030 plan spearheaded by Crown Prince Mohammed bin Salman (MBS). Compared with this strategic goal, raising cash for the state is an important but secondary driver. IPO preparations have been an overwhelming focus for the company, but the domestic listing has been pushed back to 2019. There is speculation that an international listing may not happen. Disclosure requirements, litigation risks and broader strategic issues could convince MBS that the drawbacks of an international listing outweigh the rewards. The critical question is how much Saudi Aramco is worth. In its Business & Competitive Intelligence (BCI) strategy profile of Saudi Aramco, 博彩对冲 calculates that with oil at $80/bbl and production at 10 million b/d, net income for this year could be $73 billion. A conservative earnings multiple suggests a potential valuation of $1.31 trillion. Even at $100/bbl, the valuation would fall far short of MBS鈥檚 original $2 trillion target, which has now been set aside. 鈥淭here are important political and strategic drivers for the IPO, but it faces challenges鈥攊ncluding the perception that the Saudis are giving away the crown jewels,鈥� says Ben Cahill, Manager with 博彩对冲鈥檚 Research & Advisory division in Washington, D.C. 鈥淐learly the IPO could deliver a windfall for the state, but skeptics argue that the tradeoffs are too great.鈥� Leaked financial data revealed by Bloomberg show impressive profitability for Saudi Aramco even at lower oil prices. Its net income last year may have reached $70 billion鈥攁 figure that dwarfs the Supermajors and listed NOCs. 博彩对冲 is the leading independent provider of news, unbiased analysis and reliable data and research for the global energy industry.-ENDS-Note to Editors: For more details on 博彩对冲鈥檚 Saudi Aramco analysis, please contact: Ben Cahill Manager, Research & Advisory, 博彩对冲 +1 (202) 662-0707 | bcahill@energyintel.com Click here to learn more about our views on what鈥檚 driving Saudi Arabia鈥檚 oil policy:
