Saudi Aramco is considering shelving plans for an international listing in favour of a private share sale to the world’s biggest sovereign wealth funds and institutional investors. Talks about a private sale to foreign governments including China and other investors have gathered pace in recent weeks, according to five people familiar with the initial public offering preparations, amid growing concerns about the feasibility of an international listing. The Saudi state oil company has struggled to select a suitable international venue for its shares, as New York and London have vied for what has been billed as the largest ever flotation. The company would still aim to list shares on the kingdom’s Tadawul exchange next year if they pursue the private sale, the people said. No final decision has yet been made and an international listing could still occur next year.
If Saudi Aramco pursues the private share sale option, an international listing could also follow, but would probably not be until at least 2019. The latest proposal by the company’s financial advisers was described by one of the people as a “face-saving” option for Saudi Aramco, which has worked on plans to list its shares internationally for more than a year. One person working for Saudi Aramco said that the Chinese government was close to playing a key role in any new plan. Doubts among advisers and the country’s highest authorities have grown about listing on an international exchange. Saudi Aramco’s internal operations and finances have been shrouded in secrecy for decades and its close relationship with the state has thrown up numerous financial, legal and regulatory challenges.