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Saudi Aramco President Yasir al-Rumayyan at a press conference in Dhahran, Saudi Arabia, November 3, 2019. REUTERS / Hamad I Mohammed

After nearly four years late, Aramco, the Saudi oil giant has just obtained this Sunday, November 3, the green light of the Saudi regulator for a return to the stock market on the local market in December.

The IPO of this jewel of the Saudi kingdom is the mainstay of the reform called " Vision 2030 " Mohammed ben Salman who hoped to raise 100 billion dollars. This money is needed to finance megaprojects, such as NEOM , a $ 500 billion futuristic mega-city on the North Red Sea coast, whose officials refer to flying taxis and talking robots. The Crown Prince wants to diversify the country's economy and get it out of its dependence on oil.

Aramco is the most profitable company in the world . She made a profit of $ 111 billion last year. That's more than the combined profits of Apple, Google and Exxon Mobil, number two. The Saudi company pumps about 10% of the world's oil from its wells in the eastern kingdom, but also in the Southern Desert called the "Empty Quarter" and offshore deposits. Aramco holds the world's largest oil reserves: 260 billion barrels. Its biggest competitor, the American ExxonMobil, owns only $ 20 billion.

This IPO is expected to value between $ 1,500 and $ 1,700 billion, the largest capitalization in the world. However, it is below the $ 2,000 billion of capitalization originally intended by Riyadh.

An IPO in two steps

Aramco is expected to sell a total of 5% of its capital. The first operations are expected to begin in December with a 2% stake in the local Saudi market, Tadawul. Large Saudi families could participate in this first phase. In a second step, another part of the capital, around 3%, should be listed on an international financial center, without knowing which one.

There are several reasons for this two-step listing, explains Francis Perrin, a researcher at the Institute of International and Strategic Relations. A need for transparency, first. "To quote Aramco on large foreign stock exchanges implies transparency commitments that Saudi leaders are not necessarily ready to satisfy from the outset ," says the researcher.

The political aspect is another explanation. " To be listed in the United States, it can be a vulnerability in the case of lawsuits against Saudi Arabia and therefore against Saudi Aramco, " says Francis Perrin. But already entering the Saudi Stock Exchange, Aramco shows that the attacks in September against its facilities have failed to interrupt its partial privatization program and the strategy desired by Prince Mohammed bin Salman.