Saudi Aramco chairman says IPO part of diversification efforts

The chairman of Saudi Aramco, Saudi Arabia's state oil giant, said on Monday that plans for a possible initial public offering of the company are part of the kingdom’s strategy to diversify the economy and generate non-oil income.

As oil prices dropped, Aramco took measures to cut cost and expenses, and considered selling a stake in an IPO, he said in remarks during the Global Competitiveness Forum in Riyadh.

The kingdom is keen on job nationalization, creating a knowledge-based economy and value-added manufactories, he said.

Earlier, Al-Falih said that any IPO of Saudi Aramco would not include the kingdom's oil reserves.

He also added that the offering could be open to international markets.

As oil prices collapsed in the past 18 months, the Saudi government projected a budget shortfall of $87 billion in 2016.

The kingdom has started an economic reforms to make up for the loss in oil income, including partial privatization of Aramco and other state-owned firms, introducing taxes and decreasing energy and utility subsidies.