A Saudi top official is trying to beat back reports that the kingdom’s oil company, Saudi Aramco, has abandoned its plan to begin selling 5 percent of the company’s stock as part of a broader economic diversification plan.
“The government remains committed to the [initial public offer] of Saudi Aramco at a time of its own choosing when conditions are optimum,” said Khalid al-Falih, the Saudi energy minister and the company’s chairman, on Thursday. “This timing will depend on multiple factors, including favorable market conditions.”
It’s unclear whether al-Falih is committed to making the public offering soon, or if Aramco is actually trying to push back the timeline because of recent improvements in the price in oil.
The plan to sell 5 percent of the largest energy company in the world is part of the oil-rich kingdom’s Vision 2030 plan to diversify the country’s economy away from oil. The move to go public followed a crash in the price of oil two years ago, which cut the nation’s budget in half due to the losses in revenue.
Selling shares of stock in Aramco, an unprecedented move, was a bold attempt to increase revenue in an uncertain energy market. However, actions by OPEC and non-OPEC countries to cut oil production over the last year have helped force the global price of oil upward.
The price of oil went from around $25 per barrel at its lowest point nearly three years ago, to nearly $80 per barrel this year. The Energy Information Administration expects the price to hold steady at around $70 per barrel going into 2019.
