Saudi Aramco IPO prospectus ‘virtually ready,’ with new reserves valuation likely to top 260bn barrels

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Saudi Aramco Chief Executive Amin Nasser said: ‘There is a lot of demand for the listing of Saudi Aramco which we will see when we go on our roadshow.’ (Reuters)
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The Saudi Aramco facility in Dammam city. A reserves estimate materially higher than 260 billion barrels would have important implications for the company’s valuation in an IPO. (AFP)
Updated 27 March 2018
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Saudi Aramco IPO prospectus ‘virtually ready,’ with new reserves valuation likely to top 260bn barrels

NEW YORK: The prospectus for the initial public offering (IPO) of Saudi Aramco is “virtually ready,” including a revised valuation of the oil giant’s reserves, sources close to the company’s plans told Arab News.

The news came as Saudi Arabia’s Crown Prince Mohammed bin Salman said OPEC is seeking to cooperate with Russia on oil supplies for the next 10-to-20 years. The crown prince, currently leading a Saudi delegation in the US, added that OPEC has agreed on the general outlines for long-term oil supply cooperation with Russia.

Sources close to Aramco in New York, who declined to be identified because details of the prospectus were not in the public domain, said the plans for an IPO were on track for later this year, and that the prospectus was awaiting government approval and some finalizing of details, like valuation and listing venue. “There are a few spaces left blank but (the prospectus) is almost ready to go,” a source said.

News that the reserves valuation is complete will be a significant boost for the IPO planning process. Some stock exchanges impose tight restrictions on reserves estimates by oil companies. The Aramco valuation has been completed on the basis of a sample of Aramco’s oil fields in the Kingdom by DeGolyer and MacNaughton, a petroleum consulting firm based in Dallas, Texas.

Aramco’s publicly stated reserves have for a long time been reported by the company at a level of around 260 billion barrels, but the person said that DeGolyer’s new assessment could show a “significant” increase from that level. A reserves estimate materially higher than 260 billion barrels would have important implications for the company’s valuation in an IPO.

There have been reports in some outlets that Aramco’s advisers were struggling to meet the valuation of $2 trillion put on the company when the IPO was announced two years ago, and that investors were less than enthusiastic about what would be the biggest IPO in history.

Chief Executive Amin Nasser used an television interview in the city to confirm that the IPO was still on track for the second half of 2018, and sought to counter suggestions that American investors were “cool” on the potential listing.

“I think there is a lot of investor appetite. There is a lot of demand for the listing of Saudi Aramco which we will see when we go on our roadshow. Preparations have never stopped. We always said we’d be ready as a company for a listing in the second half of 2018,” Nasser told Bloomberg TV.

He added that the venue and timing of the IPO were decisions that would be made by the government of Saudi Arabia.

He indicated that an IPO with an international element was still in the company’s plans. “There are a lot of venues to list in other than the Kingdom, for sure,” he said.

Sources close to the plans said however that the deadline for a listing on a New York stock market was pressing, and if Aramco did not announce its plans soon it could be too late to float shares on a US exchange this year. A listing in London, where the regulations are lighter, would still be possible.

However, a two-stage IPO — first on the Riyadh stock exchange, the Tadawul, with a commitment to New York or London later — was still an option under consideration, the person said.

Aramco has been gauging investor sentiment in a series of meetings this year with investing institutions. A major topic of interest is the level dividend Aramco will pay investors when it is listed.

Nasser told Bloomberg that Aramco was considering a dividend comparable with the 6 percent yield that some big independent oil companies pay investors. “We will be competing with the best for sure,” he said. Potential investors would be informed of dividend plans on the roadshow, he added.


Amazon workers strike as ‘Prime’ shopping frenzy hits

Updated 16 July 2019
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Amazon workers strike as ‘Prime’ shopping frenzy hits

  • The protesters waves signs with messages along the lines of “We’re human, not robots”
  • The strike was part of an ongoing effort to pressure the company on issues including job safety, equal opportunity in the workplace, and concrete action on issues including climate change

SAN FRANCISCO: Amazon workers walked out of a main distribution center in Minnesota on Monday, protesting for improved working conditions during the e-commerce titan’s major “Prime” shopping event.
Amazon workers picketed outside the facility, briefly delaying a few trucks and waving signs with messages along the lines of “We’re human, not robots.”
“We know Prime Day is a big day for Amazon, so we hope this strike will help executives understand how serious we are about wanting real change that will uplift the workers in Amazon’s warehouses,” striker Safiyo Mohamed said in a release.
“We create a lot of wealth for Amazon, but they aren’t treating us with the respect and dignity that we deserve.”
Organizers did not disclose the number of strikers, who said employees picketed for about an hour in intense heat before cutting the protest short due to the onset of heavy rain.
The strike was part of an ongoing effort to pressure the company on issues including job safety, equal opportunity in the workplace, and concrete action on issues including climate change, according to community organization Awood Center.
US Democratic presidential contenders Kamila Harris and Bernie Sanders were among those who expressed support for the strikers on Twitter.
“I stand in solidarity with the courageous Amazon workers engaging in a work stoppage against unconscionable working conditions in their warehouses,” Sanders said in a tweet.
“It is not too much to ask that a company owned by the wealthiest person in the world treat its workers with dignity and respect.”
Amazon employees also went on strike at seven locations in Germany, demanding better wages as the US online retail giant launched its two-day global shopping discount extravaganza called Prime Day.
Amazon had said in advance that the strike would not affect deliveries to customers.
Amazon has consistently defended work conditions, contending it is a leader when it comes to paying workers at least $15 hourly and providing benefits.
The company last week announced plans to offer job training to around one-third of its US workforce to help them gain skills to adapt to new technologies.
Amazon has been hustling to offer one-day deliver on a wider array of products as a perk for paying $119 annually to be a member of its “Prime” service, which includes streaming films and television shows.
The work action came on the opening day of a major “Prime” shopping event started in 2015.
Now in 17 countries, the event will span Monday and Tuesday, highlighted by a pre-recorded Taylor Swift video concert and promotions across a range of products and services from the e-commerce leader.
Prime Day sales for Amazon are expected to hit $5 billion this year, up from $3.2 billion in 2018, which at the time represented its biggest ever global shopping event, JP Morgan analyst Doug Anmuth says in a research note.