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Saudi crown prince says Aramco still on track to go public

Bin Salman's confirmation that state-run oil company will be listed in 2018 follows reports that key economic reform plan had been shelved
NEOM will not follow rules and regulations enforced in Saudi Arabia which imposes Sharia law based on the Wahhabi interpretation of Islam (AFP)

Saudi Crown Prince Mohammed Bin Salman has reaffirmed that the oil-rich kingdom intends to list Aramco on a stock market - and said a new $500 billion mega-city project will eventually join it.

"We are on track in 2018... but the listing (details) are still under discussion," Salman told Reuters in an interview on Wednesday in Riyadh for release on Thursday. "It will be IPO-ed in 2018."

Bin Salman declined to discuss specific details of the initial public offering, which could be the biggest in history and is expected to raise as much as $100bn.

His comments come after reports in recent weeks that plans to take the state-run oil company public had been shelved.

The sale of around 5 percent of the national oil giant Aramco has been touted as the centrepiece of Vision 2030, an ambitious reform plan to diversify the Saudi economy and wean its dependency off oil. 

Saudi officials have said domestic and international exchanges such as New York, London, Tokyo and Hong Kong are in the running for Aramco's partial listing.

But a decision has still not been made, fuelling speculation that it could be delayed beyond 2018 or even ditched, amid growing concerns about the feasibility of an international listing which will require the kingdom to disclose details about the company which have been private until now.

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Investors have long debated whether Aramco could be valued anywhere close to $2 trillion, but in his interview with Reuters, Prince Salman again put the value at about $2 trillion - or even higher.

"I know that there has been a lot of argument around this topic but at the end of the day the right say is that of the investor. Undoubtedly the biggest IPO in the world must be accompanied by a lot of rumours," Prince Salman said.

"Aramco would prove itself on the ground on the day of the IPO. Actually, when I talked about the valuation, I talk about $2 trillion, it could be more than $2 trillion."

Taking Neom public

In addition to Aramco, Bin Salman said the kingdom intends to float the Neom project, a new Saudi business and industrial zone that will span from the Egyptian to the Jordanian borders. 

Announced at a high-profile innovation summit held in Riyadh this week, Neom is the latest in a slate of privatisation programmes, like the Aramco float, designed to boost the Saudi economy and create jobs for millions of young people.

"Neom will be first capitalist city in the world"

-Saudi Crown Prince Mohammed Bin Salman 

Describing the project as "revolutionary" Salman told Reuters that Neom will be the first "capitalist city in the world" and will attract investments from companies in renewable energy, biotechnology, advanced manufacturing and entertainment, the Public Investment Fund has said.

"It won’t be listed in the markets until the idea is mature enough," Prince Salman said. "It might be after 2030, it might be before, but the idea and the strategy is to float it eventually."

He said the name mixed "neo", meaning new, with M, the first letter of the Arabic word for future.

Asked whether the rift with Gulf OPEC producer Qatar has dented investors' sentiment, ahead of the Aramco IPO, Prince Salman dismissed the impact of the political impasse.

"Qatar is a very, very, very small issue," he said.

Saudi Arabia and three other Arab states have cut ties with Qatar, accusing it of supporting terrorism. Doha denies the accusations.

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