Saudi Aramco IPO: Not priceless but peerless? Report

Insight 12 January 2016

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Report summary

Deputy Crown Prince Muhammad bin Salman announced that the Kingdom is considering privatising Saudi Aramco, with a possible listing of downstream assets. The company is the world’s largest oil producer with 12 million b/d (Rosneft is next largest at 4.1 million b/d) and it is also one of the global giants of Downstream (4th largest with refining capacity of 3.1 million b/d). Selling equity in upstream reserves seems a remote possibility – even if oil prices were not at their current lows. Downstream is different, and could provide a vehicle for outside investors for a variety of reasons, among them: a) there would be investor appetite, since Downstream is back in fashion; b) its Downstream businesses are Middle East focussed with a growth story; c) it already has an internationally diversified base of operations, many of which are IOC joint ventures; d) certain majors and NOCs with large deficit domestic markets remain keen to collaborate with Aramco's Downstream businesses

Introduction
Saudi Aramco Upstream
Saudi Aramco Downstream
Conclusion

Tables and charts

This report includes 5 images and tables including:

Figure 1: Total Production Forecast of Aramco Upstream Potential Peers
Figure 2: Total Estimated Commercial Reserve Life of Aramco and Potential Upstream Peers
Figure 3: Refining capacity by region
Figure 4: Refining capacity ownership structure and chemical integration
Figure 5: Refining complexity and net cash margin (weighted average)