Saudi Aramco chief Amin Nasser sets out roadmap for IPO in 2021

The head of Saudi Aramco, pictured here at Davos 2017, has laid out a roadmap leading to the sale of shares in the world’s biggest oil company in 2021. (WEF)
Updated 27 January 2019
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Saudi Aramco chief Amin Nasser sets out roadmap for IPO in 2021

  • ‘The IPO is going to happen. There is no doubt the commitment is there,’ CEO tells Arab News
  • Aramco considering a major acquisition in the global gas industry

DAVOS: The head of Saudi Aramco has laid out a roadmap leading to the sale of shares in the world’s biggest oil company in 2021.
“It’s going to happen,” president and chief executive Amin Nasser told Arab News. “There is no doubt the commitment is there, and it was also further confirmed by Crown Prince Mohammed bin Salman and by the Minister of Energy Khalid Al-Falih.”
The initial public offering — potentially the biggest stock-market flotation in history — will require careful coordination over the next two years, he said.

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FULL ARAB NEWS INTERVIEW WITH AMIN NASSER HERE

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The first stage is to complete the acquisition of SABIC, the Kingdom’s industrial giant, to transform Aramco into a major player in the global petrochemicals industry.
“That will take almost until the end of 2019, or maybe a little bit more; we don’t know because you need approval from a lot of countries where SABIC has major operations,” Nasser said.
“After that you need a minimum of one year to … show what is the impact on our balance sheet — because the investors will want to see. Then you can go to the market.”
Aramco is also considering a major acquisition in the global gas industry, with potential targets in the US, Russia and Australia, Nasser revealed.
“The team is identifying opportunities and we’re at the stage of reviewing them in detail before we announce anything.”


Gulf defense spending ‘to top $110bn by 2023’

Updated 15 February 2019
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Gulf defense spending ‘to top $110bn by 2023’

  • Saudi Arabia and UAE initiatives ‘driving forward industrial defense capabilities’
  • Budgets are increasing as countries pursue modernization of equipment and expansion of their current capabilities

LONDON: Defense spending by Gulf Arab states is expected to rise to more than $110 billion by 2023, driven partly by localized military initiatives by Saudi Arabia and the UAE, a report has found.

Budgets are increasing as countries pursue the modernization of equipment and expansion of their current capabilities, according to a report by analytics firm Jane’s by IHS Markit.

Military expenditure in the Gulf will increase from $82.33 billion in 2013 to an estimated $103.01 billion in 2019, and is forecast to continue trending upward to $110.86 billion in 2023.

“Falling energy revenues between 2014 and 2016 led to some major procurement projects being delayed as governments reigned in budget deficits,” said Charles Forrester, senior defense industry analyst at Jane’s.

“However, defense was generally protected from the worst of the spending cuts due to regional security concerns and budgets are now growing again.”

Major deals in the region have included Eurofighter Typhoon purchases by countries including Saudi Arabia and Kuwait.

Saudi Arabia is also looking to “localize” 50 percent of total government military spending in the Kingdom by 2030, and in 2017 announced the launch of the state-owned military industrial company Saudi Arabia Military Industries.

Forrester said such moves will boost the ability for Gulf countries to start exporting, rather than purely importing defense equipment.

“Within the defense sector, the establishment of Saudi Arabia Military Industries (SAMI) in 2017 and consolidation of the UAE’s defense industrial base through the creation of Emirates Defense Industries Company (EDIC) in 2014 have helped consolidate and drive forward industrial defense capabilities,” he said.

“This has happened as the countries focus on improving the quality of the defense technological work packages they undertake through offset, as well as increasing their ability to begin exporting defense equipment.”

Regional countries are also considering the use of “disruptive technologies” such as artificial intelligence in defense, Forrester said.

Meanwhile, it emerged on Friday that worldwide outlays on weapons and defense rose 1.8 percent to more than $1.67 trillion in 2018.

The US was responsible for almost half that increase, according to “The Military Balance” report released at the Munich Security Conference and quoted by Reuters.

Western powers were concerned about Russia’s upgrades of air bases and air defense systems in Crimea, the report said, but added that “China perhaps represents even more of a challenge, as it introduces yet more advanced military systems and is engaged in a strategy to improve its forces’ ability to operate at distance from the homeland.”