Saudi Arabia's state-controlled oil company, Aramco, is reportedly considering offering $50 billion in shares, which would be the largest offering in the history of global capital markets, according to unnamed sources cited by the Wall Street Journal. No official date has been set yet, but the offering is expected to take place before the end of the year. Interested parties, including multinational oil companies and sovereign-wealth funds, have reportedly expressed their interest to Aramco.
If the offering proceeds, it would be listed on the Riyadh stock exchange to avoid any legal risks associated with an international listing. Aramco, the world's most valuable oil company, has been a significant source of wealth for Saudi Arabia. In March, the company announced a record-breaking $161 billion in profit, making it the highest net income ever recorded by an energy company. The majority of Aramco is state-owned, providing the Saudi Arabian kingdom with substantial revenue streams.
Through Saudi Arabia's Public Investment Fund, the government has utilized Aramco's wealth to invigorate the domestic economy and extend its influence abroad. This has included sports investments, such as the creation of the LIV Golf Tour, which recently merged with the PGA, and attracting international soccer stars like Christiano Ronaldo and Neymar da Silva Santos Jr. to play in the domestic league.
However, there is a high possibility that this deal may be postponed or canceled, as previous attempts to sell shares fell through. In February 2022, Aramco reportedly considered selling shares on the Riyadh stock exchange as well as on international exchanges in London or Singapore. If the sale does proceed, Aramco would surpass its own record for the most money raised through a stock sale, with the current record standing at $29.4 billion raised on the Saudi stock exchange in 2019.
This news brings attention to the potential financial implications for Aramco and Saudi Arabia, as well as the broader global energy market. It remains to be seen whether this deal will come to fruition, and further updates are awaited.