NEW YORK: Only Wall Street can offer Saudi Aramco the exposure to capital that it needs for a successful public listing, according to a top New York Stock Exchange (NYSE) executive.
Alex Ibrahim, head of international capital markets for the New York Stock Exchange (NYSE), told Arab News that all the world’s other major oil firms had opted for NYSE.
It comes as Saudi Arabian officials eye several global bourses to sell 5 percent of the national oil company via an initial public offering (IPO) expected later this year.
“If you look at the US capital markets and compare it to London Hong Kong, look at the size of this market and how many companies in the oil center are listed here,” Ibrahim told Arab News at the 225-year-old Wall Street institution.
“The two largest oil companies from the United Kingdom are listed here. We trade them more here than in the local market. This is a very deep market for the oil sector and (Aramco) should take that into consideration when they decide.”
London, Hong Kong and other bourses have less experience with “very large complex transactions” like the looming Aramco share sale, which could raise some $100 billion or more in what would likely be the world’s biggest IPO, added Ibrahim.
He spoke as Crown Prince Mohammed bin Salman concluded a three-day visit to Britain, which is also fighting to win the prize listing.
New York and London have long been the front runners to host a potential international leg of the flotation, alongside a Riyadh listing.
On Thursday, Saudi Energy Minister Khalid Al-Falih expressed fears about the risks Aramco would run by choosing New York as the venue for its market offering, saying that “litigation and liability are a big concern in the US.”
Companies face a heavy regulatory burden when they list publicly in the US. Saudi oil chiefs are understood to be anxious about law suits over everything from climate change to anti-terror financing rules.
Saudi Arabian Oil Co, known as Saudi Aramco, has prepared for the IPO to take placeas early as this year.
Saudi Aramco has been valued at as much as $2 trillion — more than six times the value of Exxon Mobil.
A deal of that size would be a prize for the world’s leading stock markets, and they’re lobbying fiercely for the business.
Chris Taylor, NYSE’s vice president of listings and services, said:
“Over the last four years, there have been 38 IPOs in the US that have raised $700 million or more. Every single one of them chose the NYSE as its bourse.”
The IPO is a cornerstone of the Kingdom’s Vision 2030 social and economic transformation blueprint,
Proceeds from the sale will be pumped into technology, tourism and other sectors.
NYSE looks to allay Saudi Aramco fears ahead of listing
NYSE looks to allay Saudi Aramco fears ahead of listing
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Saudi minister at Davos urges collaboration on minerals
- The reason of the tension of geopolitics is actually the criticality of the minerals
LONDON: Countries need to collaborate on mining and resources to help avoid geopolitical tensions, Saudi Arabia’s minister of industry and mineral resources told the World Economic Forum on Tuesday.
“The reason of the tension of geopolitics is actually the criticality of the minerals, the concentration in different areas of the world,” Bandar Alkhorayef told a panel discussion on the geopolitics of materials.
“The rational thing to do is to collaborate, and that’s what we are doing,” he added. “We are creating a platform of collaboration in Saudi Arabia.”
The Kingdom last week hosted the Future Minerals Forum in Riyadh. Alkhorayef said the platform was launched by the government in 2022 as a contribution to the global community. “It’s very important to have a global movement, and that’s why we launched the Future Minerals Forum,” he said. “It is the most important platform of global mining leaders.”
The Kingdom has made mining one of the key pillars of its economy, rapidly expanding the sector under the Vision 2030 reform program with an eye on diversification. Saudi Arabia has an estimated $2.5 trillion in mineral wealth and the ramping up of extraction comes at a time of intense global competition for resources to drive technological development in areas like AI and renewables.
“We realized that unlocking the value that we have in our natural resources, of the different minerals that we have, will definitely help our economy to grow to diversify,” Alkhorayef said. The Kingdom has worked to reduce the timelines required to set up mines while also protecting local communities, he added. Obtaining mining permits in Saudi Arabia has been reduced to just 30 to 90 days compared to the many years required in other countries, Alkhorayef said.
“We learned very, very early that permitting is a bottleneck in the system,” he added. “We all know, and we have to be very, very frank about this, that mining doesn’t have a good reputation globally.
“We are trying to change this and cutting down the licensing process doesn’t only solve it. You need also to show the communities the impact of the mining on their lives.”
Saudi Arabia’s new mining investment laws have placed great emphasis on the development of society and local communities, along with protecting the environment and incorporating new technologies, Alkhorayef said. “We want to build the future mines; we don’t want to build old mines.”
