Wall Street may be at risk of missing out on the largest all-time oil deal, as Saudi Arabia is considering where it will sell it shares from for Aramco, its behemoth oil company and London, New York and other large international stock exchanges remain in the running.
However, on Thursday, while speaking during a visit in London, the top energy official from Saudi Arabia was clear about the kingdom have big concerns about risks it would run into if New York was chosen.
Khalid Al Falih the energy minister from Saudi Arabia said that the kingdom had a big concern of possible liability and litigation if the U.S. were selected. He said that Saudi Aramco was too big and too important for Saudi Arabia to become subjected to that type of risk.
Al Falih specifically made reference to the decision by New York City to sue five large oil companies for the cost of protecting it against an existential threat due to climate change. He said those allegations against the five companies were frivolous.
Saudi Arabia plans to sell just 5% of the oil company, the largest producer in the world of oil. The 5% will be sold through an initial public offering. All preparations have been made for its IPO to be launched in 2018, although officials have reportedly admitted that it could be pushed back to 2019 to improve the conditions for the 5% sale.
Officials in Saudi Arabia said that the oil giant could have a worth or more than $2 trillion, which would be six times the worth of Exxon Mobil, although estimates of independent analysts are not as high. Selling just 5% of the company could help to raise more than $100 billion if the estimates that Saudi Arabia has of its value prove accurate.
A deal that size would become a huge prize for the leading stock markets of the world, and they have been lobbying for this business in a fierce way.
Al Falih was rather up beat with his remarks about London. The London Stock Exchange is one of the world’s best and is very well respected and regulated, he added. It has many great companies, and includes the gas and oil sectors.
The IPO, which might end up being the biggest ever, is at the center of the plan the kingdom has, to wean itself from oil. Its proceeds would be injected into other sectors in the country such as tourism and technology.