The financiers and corporate chieftains gathered for Saudi Arabia's "Davos in the Desert" heard the same message again and again. From the crown prince down, Saudi leaders wanted no room for doubt: the initial public offering of oil giant Aramco is "on track" for 2018.
But beneath the disciplined message put forward in Riyadh lies a more uncertain reality. The 2018 deadline looks tight and the final shape of the deal – exactly where it happens, how big it is and who gets to take part – is no clearer than it was a week ago.
There's a lot at stake in Saudi Arabia and beyond.
Potentially the biggest equity sale in history, the IPO is the centrepiece of crown prince Mohammed bin Salman’s ambitious reform programme and intended to seed a $2 trillion sovereign wealth fund to carry the Middle East’s biggest economy through the end of the oil age. It will also mean a giant pay day for Aramco’s Wall Street advisers including JPMorgan Chase and Morgan Stanley.
Since prince Mohammed surprised everyone in early 2016 with his promise to partially privatise the country’s most valuable asset, Saudi officials have said the IPO would take place next year and involve both a domestic and an international listing, most likely in London or New York.
Public or private
As recently as this month, Khalid Al Falih, the country's energy minister and a close confidant of the prince, supported the official line: the IPO will happen in 2018, both on the Tadawul, Riyadh's local exchange, and overseas.
Yet on Thursday, Mohammed Al-Jadaan, the country’s finance minister, became the first senior official to openly discuss the possibility of forgoing the international part of the IPO – its most important element.
“We have said publicly that Tadawul is for certain,” Al-Jadaan told the Financial Times. “Are we going to go with an international market? If we go, where are we going? And if we go, are we going public or we are going private?”
What’s more, Aramco executives have started to make a distinction between their preparatory work, which they said will be completed on time for 2018, and the decision to go ahead with the IPO, which is in the hands of the royal court.
"Things are on track for 2018," Aramco chief executive Amin Nasser told Bloomberg at the conference. But when asked specifically if that included both the domestic and international IPO, he hedged his response.
“That decision will be decided by the shareholder, not by the company. The shareholder will make the decision regarding the venues.” – Bloomberg
