Aramco IPO will be more successful in 2021 than in 2018: Al-Falih

The potential listing of shares in state-owned Saudi Aramco will be more successful in 2021 than if the IPO had taken place in 2018, Saudi energy minister Khalid Al-Falih told Russia's TASS news agency in an interview published on Monday.

“We are looking at 2021 as potentially the year of IPO. If all goes well, IPO will be more successful in 2021 compared to 2018,” TASS quoted him as saying.

The minister said Aramco’s listing was deferred because the company is “overly weighted on the upstream and it has to be re-balanced by building in its downstream, which is less developed”.

Aramco is currently the world’s largest upstream company, and its reserves are also by far the largest of any company in the world, with 260 billion barrels of low-cost conventional oil, the minister said.

While its downstream operations are also significant, they are not at the same level as upstream, he added.

“So the decision was made that Aramco needs to balance its portfolio, such that it also gives us more revenues from the downstream. If in the next oil cycle the prices for the upstream go down, the downstream will be able to create a very healthy return,” Al-Falih said.

Aramco continues to grow in downstream, particularly the petrochemicals sector. The recent move to acquire a 70 percent stake owned by Public Investment Fund (PIF) in Saudi Basic Industries Corp. (SABIC) is an example of this, he added.

“SABIC will not be the last deal that Aramco does in chemicals. Aramco continues to look for the right companies. We are doing a lot of projects in many countries – Malaysia, China, and recently in India,” he said.

Aramco is also planning to invest in some Russian oil and gas companies, Al-Falih added.

The Kingdom’s wealth fund PIF has allocated $10 billion for investment in Russia, of which $1 billion has been earmarked for oil and gas fields services.

“We are very close to invest into Novomet. And we are also looking to EDC. These are two companies we hope to invest. But this is not final,” he told TASS.