According to local sources in the Middle East, financial difficulties in Saudi Arabia may see a cash injection coming for its oil industry – Aramco. The Saudis are considering a private placement of its shares instead of a traditional float of shares on the stock exchange. The buyer is of course China.
Saudi Aramco has been considering the international public offering but it has been pushed beyond its 2018 target according to sources. The initial public offering was expected to be the world’s largest stock sale, which would then be a major component of the Saudi government’s economic reform program which aims to diversify the desert kingdom away from its reliance on oil exports.
Selling shares in Aramco would raise billions for a government that it will really need because of budget problems. However, such an asset is never just about the money. The Saudis were looking for prestige with trillions of dollars trading in the world with Aramco becoming the cornerstone of a public investment designed to help pull Saudi Arabia’s economy into the 21st century.