Saudi Aramco tells investors it’s ready to go public

[Brian4Liberty]

Saudi Aramco tells investors it’s ready to go public
PUBLISHED MON, AUG 12 2019

Saudi Aramco’s CFO, in the company’s first-ever conference call, on Monday told investors that the company is ready to go public, but that the timing will be up to its owner, the Kingdom of Saudi Arabia.

“Basically, the company is ready for the IPO. Now the timing of the IPO itself, this is a shareholder’s issue, and they will announce it depending on their perception of what would be the optimum market condition,” said Khalid al-Dabbagh, chief financial officer, reiterating the company’s previous stance.

Sources have said that the Saudi government, encouraged by the success of Aramco’s $12 billion debt offering, would like to move its plans for the IPO forward, and issue stock in 2020. The offering is expected to be the largest new issue ever, and represent just a small portion of the company’s equity. Saudi Crown Prince Mohammed bin Salman would like to see Aramco valued at $2 trillion, about $500 billion more than bankers are currently estimating, according to sources.
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More: https://www.cnbc.com/2019/08/12/saud...go-public.html

[Brian4Liberty]

Cui bono?

[Swordsmyth]

LOL

Anyone would be a fool to buy now, the attack just demonstrated how dangerous that corner of the world is and will cost them boatloads of money for repairs and increased security.

[Brian4Liberty]

LOL

Anyone would be a fool to buy now, the attack just demonstrated how dangerous that corner of the world is and will cost them boatloads of money for repairs and increased security.

And cui bono?

[Swordsmyth]

And cui bono?

Too many different people to go by.

Any non-middle east oil industry, Israel geopolitically, the deepstate, any enemy of China, any enemy of the Saudis or any enemy of Europe.
Iran, Venezuela, and Canada are major sources of similar quality oil.

And that's just an off the cuff list.

[UWDude]

Cui bono?

there is something highly suspicious about the timing of all this.
Perhaps crash and grab, the opposite of pump and dump.

Still, SA has been getting hit by cruise missiles and drones for a year now... ...and the houthi are advancing in cruise missile technology quickly.

[Swordsmyth]

Saudi Arabia has shut down its 230,000 bpd pipeline carrying Arab Light crude to Bahrain, after this weekend’s attacks took 5.7 million bpd of Saudi oil production—mostly light grades—offline, Reuters reported on Monday, quoting two trade sources.

The pipeline with a capacity to ship between 220,000 bpd and 230,000 bpd of Arab Light crude oil from Aramco to Bahrain’s oil company Bapco was closed after the attacks crippled the production of mostly light grades in Saudi Arabia, one of Reuters’ sources said.


On Saturday, the Abqaiq facility and the Khurais oil field in Saudi Arabia were hit by attacks, which resulted in the suspension of more than half of Saudi Arabia’s oil production. The onshore Khurais oil field has the capacity to produce 1.2 million bpd of Arab Light, according to EIA estimates. The Abqaiq facility, for its part, is considered to be the most important oil processing plant in the world. The facility processes crude oil from the major Saudi oil fields Ghawar, Shaybah, and Khurais.
All those three fields produce Arab Light or Arab Extra Light. Ghawar has the capacity to pump 5.8 million bpd of Arab Light, while Shaybah has a capacity of 1 million bpd of Arab Extra Light, according to EIA estimates based on data from Saudi Aramco, Arab Oil and Gas Journal, and IHS Markit.
While the Saudis closed the oil pipeline to Bahrain, the Bahraini company Bapco is scrambling to secure tankers to ship some 2 million barrels of crude oil from Saudi Arabia, the trade sources told Reuters.
Bapco has shut down a crude distillation unit at the Sitrah refinery, while another crude distillation unit, a vacuum distillation unit, and a visbreaker unit have reduced their run rates to 45 percent, Reuters reported, citing an alert to clients sent by research company IIR.

https://oilprice.com/Latest-Energy-N...r-Attacks.html

[Swordsmyth]

Saudi Arabia’s disrupted oil production may last longer than originally thought, Amrita Sen, chief oil analyst at Energy Aspects Ltd., told Bloomberg on Monday, with full resumption of oil production perhaps not returning for weeks—or even months.

Saudi Arabia, too, is holding a more reserved position that initially thought, believing now that less than half the capacity at the Abqaiq processing plant can be restored quickly, according to Bloomberg sources that spoke on condition of anonymity. One of the longer lead-time items of the restoration are Abqaiq’s stabilization towers that separates out the dissolved gas from the crude oil—a distillation process that sweetens sour crude, if you will.


Just the specialized parts to repair those towers could take months to get. Five out of the 18 stabilization towards were hit, indicating a “very specific, accurate targeting of those particular infrastructures,” Phillip Cornell, former senior corporate planning adviser to Aramco, cited by Bloomberg.
Abqaiq has a capacity of 5.7 million barrels per day of light crude.
To compensate, Aramco is bringing back online previously shuttered oilfields, and it is drawing on its oil reserves to cushion the blow. What can’t be compensated for by cranking up idled fields and siphoning off crude reserves is being satisfied by substituting a heavier grade oil—but all these emergency measures have limits.
Saudi Arabia’s stockpiles are only sufficient enough to last 26 days, according to Rystad Energy, so if the outage were to last “months” rather than days or weeks, customers may actually feel the supply crunch.

More at: https://oilprice.com/Energy/Crude-Oi...s-Analyst.html

[Swordsmyth]

OPEC has sufficient spare capacity to respond to supply shortages after this weekend’s attacks on oil infrastructure that took more than half of Saudi Arabia’s oil production offline, Suhail Al Mazrouei, the energy minister of the United Arab Emirates (UAE), said on Monday.

“We have spare capacity, there are volumes that we can deal with as an instant reaction but we need to analyse the full impact, and the assessment of the incident is under way in Saudi Arabia,” Al Mazrouei said, as carried by The National.
The UAE will support Saudi Arabia, if needed, he added.
“We as the UAE, as a member of OPEC, stood fast and ready to support KSA in any shape or form. The technical side, from supply, if there is a shortage. We have certain capacity that we can put in the market,” Al Mazrouei said.
Still, the UAE energy minister, as well as OPEC’s Secretary General Mohammad Barkindo, said it was too early to rush into emergency meetings and put extra supply on the market, at least until Saudi Aramco provides the first updates about how long it would take to restore production.


The Saudis haven’t declared any force majeure, the situation is under control, and Saudi Arabia has ample supply, OPEC Secretary General Mohammad Barkindo told “Bloomberg Markets: European Open” in an interview on Monday.


In case of prolonged outage in Saudi Arabia, OPEC’s UAE, Kuwait, and Iraq, plus non-OPEC’s Russia could bring in 800,000 bpd-900,000 bpd of production online, which is significantly less than the outage in Saudi Arabia, Warren Patterson, Head of Commodities Strategy at ING, said on Sunday.

“The issue for the market is that more than 70% of OPEC spare capacity sits in Saudi Arabia,” Patterson noted.

More at: https://oilprice.com/Energy/Crude-Oi...Necessary.html

[Swordsmyth]

On Saturday, Saudi Arabia promised that it would provide much needed information about the scope and severity of its damaged facilities within 48 hours, yet has so far failed to do so, leaving commodity traders scrambling and dependent on rumors and innuendo, to evaluate just how long the output shortage would last and how much oil would be taken offline for at least a few days (and potentially as long as months).
In retrospect, it now appears that we won't be getting a detailed update any time soon because as the WSJ reports, the Saudis themselves have no idea what is going on, and are seeking "clarity on damage." As a result, Saudi Arabia - which last week was said to be fast tracking its Aramco IPO after numerous delays - is once again said to be considering a delay for the IPO of the world's most valuable company (its market cap is said to be $1.5-$2 trillion when it goes public), as the attacks have added "a fresh element of risk for international investors hoping to take part in Aramco’s initial public offering of stock", the WSJ reports.
Separately, Bloomberg reports that Aramco officials "are growing less optimistic that there will be a rapid recovery in oil production after the attack on the giant Abqaiq processing plant", although here too there is no official disclosure but rather "a person with knowledge of the matter" is the source.


While Aramco has been gearing up for a two-part IPO, in which it hopes to first sell a sliver of itself to investors on the local Saudi exchange, and then list shares internationally, the weekend attack puts into focus another new risk, unusual for most companies planning an IPO: the threat of more attacks that might bottle up production by cutting revenue and profit, or otherwise shake investor confidence in Aramco’s longer-term investment value.
The Aramco delay would also be a disastrous start to the new Saudi energy minister, MbS's older brother, Abdulaziz bin Salman, or AbS, who as we reported last weekend, unexpectedly replaced Khalid al Falih as the Kingdom's top energy official:

The attack also comes at a sensitive time for Aramco leadership. Khalid al Falih, who until recently led both Aramco, as chairman, and the country’s oil sector, as energy minister, was earlier this month relieved of those positions. Two officials untested by crises of this kind are now in charge: Yaser Rumayyan, who leads Saudi Arabia’s main sovereign-wealth fund, now heads Aramco and Crown Prince Mohammed bin Salman ’s older brother, Abdulaziz bin Salman, is just days into his new job as energy minister.

A delay is also bad news for all the banks that were recently tapped to prepare the market for the monstrous IPO.

More at: https://www.zerohedge.com/commoditie...ed-take-longer

[Brian4Liberty]

Too many different people to go by.

Any non-middle east oil industry, Israel geopolitically, the deepstate, any enemy of China, any enemy of the Saudis or any enemy of Europe.
Iran, Venezuela, and Canada are major sources of similar quality oil.

And that's just an off the cuff list.

So many options. Competing oil companies and nations? Banks or investors that might somehow lose out?

While Aramco has been gearing up for a two-part IPO, in which it hopes to first sell a sliver of itself to investors on the local Saudi exchange, and then list shares internationally, the weekend attack puts into focus another new risk, unusual for most companies planning an IPO: the threat of more attacks that might bottle up production by cutting revenue and profit, or otherwise shake investor confidence in Aramco’s longer-term investment value.
The Aramco delay would also be a disastrous start to the new Saudi energy minister, MbS's older brother, Abdulaziz bin Salman, or AbS, who as we reported last weekend, unexpectedly replaced Khalid al Falih as the Kingdom's top energy official:
The attack also comes at a sensitive time for Aramco leadership. Khalid al Falih, who until recently led both Aramco, as chairman, and the country’s oil sector, as energy minister, was earlier this month relieved of those positions. Two officials untested by crises of this kind are now in charge: Yaser Rumayyan, who leads Saudi Arabia’s main sovereign-wealth fund, now heads Aramco and Crown Prince Mohammed bin Salman ’s older brother, Abdulaziz bin Salman, is just days into his new job as energy minister.
A delay is also bad news for all the banks that were recently tapped to prepare the market for the monstrous IPO.

And we can’t rule out internal politics. Who internal to Saudi Arabia benefits or loses by this IPO?

[Swordsmyth]

So many options. Competing oil companies and nations? Banks or investors that might somehow lose out?

I was wrong about the oil quality, since reading more articles I found out that it is mostly light oil so that changes the list of alternate suppliers.

And we can’t rule out internal politics. Who internal to Saudi Arabia benefits or loses by this IPO?

MBS loses if the IPO fails so anyone who hates him wins, and the people he was going to force to invest in it win if it gets cancelled.


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