SABIC deal would postpone Aramco's IPO: sources

State-run Saudi Aramco's listing could be postponed until 2020 or beyond on a proposed reshuffle of Saudi state assets, Reuters reported Monday, citing sources familiar with the matter.

Last week, the Saudi company said it was in talks with the Kingdom’s sovereign wealth fund over the acquisition of a potential strategic stake in Saudi Basic Industries Corporation (SABIC), from the Public Investment Fund (PIF).

The deal could pump billions of dollars into the PIF, which would allow it to proceed in its plans, including the establishment of the $500 billion NEOM project in the northwest of the country.

The news agency added that raising money to make the PIF an engine for transforming the Saudi economy was a major objective of Aramco’s IPO.

Industry and banking sources said the SABIC deal would give the Saudi government more time to make a decision regarding Aramco's IPO, including whether the oil giant’s shares should be listed on a foreign market as well as in Riyadh.

"The PIF will have more cash to invest and there is no need to IPO now," one of the sources said.

Aramco president and CEO Amin Nasser said on Friday in an interview with Saudi-owned Al Arabiya TV that the deal would delay the IPO.

Sources added that the final decision concerning the IPO would be taken by Prince Mohammed bin Salman.

Saudi Arabia plans to list up to 5 percent of the world’s largest oil producer on its domestic stock exchange (Tadawul), in addition to one or more international venues in a listing that could raise $100 billion.

Earlier, the Crown Prince predicted that the IPO would value the Aramco at $2 trillion or more, while many oil and gas industry analysts estimated it to be far lower, around $1.0-1.5 trillion, Reuters added.