BICOM

Saudi Arabia has postponed both the domestic and international stock listing of its state oil company Saudi Aramco.

The financial advisors working on the proposed listing have been disbanded, according to two industry sources. They told Reuters that the decision was taken some time ago but not made public. Instead, the financial advisers are now focusing on the proposed acquisition of a “strategic stake” in local petrochemicals company, Saudi Basic Industries.

Saudi Arabia’s energy minister denied that Aramco’s initial public offering would be called off. “The government remains committed to the IPO [initial public offering] of Saudi Aramco at a time of its own choosing when conditions are optimum,” Khalid al-Falih said in a statement Thursday.

He added that the Saudi Government had taken measures to prepare for the listing and that the timing would depend on factors including favourable market conditions, and a planned downstream acquisition in the next few months.

Saudi Aramco is the world’s largest oil and gas business, generating up to $1bn a day in revenues. Its businesses cover management of the world’s biggest oil fields, as well as extensive refining and chemicals operations.

In 2016 Crown Prince Mohammed Bin Salman announced that Saudi Arabia was considering selling shares in Aramco. The move was as part of his economic reform agenda, to bring Western regulation and scrutiny to the company, as well as raising cash to reduce the country’s large budget deficit.

The predicted sale would have valued Aramco at around $2 trillion (£1.55 tn). The plan would see shares float on both the local stock market in Riyadh and one of the world’s leading international financial centres in the second half of 2018. In May al-Falih said that the sale would “most likely” happen in 2019.

London, New York and Hong Kong were competing to host the initial public offering. The Financial Conduct Authority even changed its rules to make the Armaco listing easier on the London Stock Exchange, attracting criticism from MPs and from the Institute of Directors for potentially harming the UK’s reputation for good governance.