Oil Price: Is it the end of Aramco's IPO?

All indications are that things are not going well for the Saudi oil giant, Saudi Aramco, and that the risks are rising as many pressures mount, a report by Oil Price said.

Aramco's IPO has become a headache for many investors after it was postponed again this weekend, especially as many banks and analysts are worried that it will be delayed until the end of 2019.

According to a report by Dr. Cyril Wiedershoven, the global energy market observer and consultant at several international research centers, there are no clear signs of canceling the IPO completely.

Anxiety
Some things are worrying in light of the flood of positive news, perhaps the most prominent and most urgent increase in the risks surrounding the company significantly in recent weeks.

Some risks have already been identified, such as transparency, accountability, and possible intervention by the Saudi government.

Although Aramco has dealt with these problems legally, analysts remain very wary of the potential impact of buying a stake in an entity still owned and heavily influenced by the Saudi government, and this listing cannot remove this, the writer said. Concerns.

"The opaque nature of the IPO decision-making process has caused many investors and banks to be cautious about what might happen."

"It can be said that the lack of transparency within the oil kingdom will be a permanent problem for this company."

Attacks
Another problem not fully addressed is the geopolitical problems associated with the attacks on the Abqaiq oil facility.

Investors have long been shocked by the Houthis' ability to "kneel" and weaken the world's largest oil company, according to the Oil Price report.

Accordingly, political risks can be easily addressed, but large-scale military threats are recent for most investors.

Although Aramco was able to reproduce and export to their previous levels, Aramco's indomitable image has begun to decline, he says.

Aramco Rating
For the IPO to be successful, Aramco must be worth between $ 1.5 and $ 2 trillion, but Aramco's problems have left it below that level.

It is noteworthy that talk that OPEC intends to target the new severe production cuts at the next meeting, will not serve the IPO of Aramco in any way.

Activists' pressure
Climate change activists are pressing Western and Asian financial groups to pull themselves out of Aramco's IPO, while Wall Street investors are under pressure from Western environmental groups.

American, British and Dutch activists have asked many banks not to participate in the IPO, such as Bank of America, Goldman Sachs, Citigroup and others.

After years of bargaining with the New York Stock Exchange and London, Aramco should now look at places where there is less willingness to participate in the IPO, as the global oil market weakens, he added.

The division of the IPO by many parties is a sign of weakness, and the listing of Aramco on the Tokyo Stock Exchange and other inferior exchanges is not a positive thing for the company.