The chairman of Saudi Aramco, Saudi Arabia's state-owned oil giant, said at a press conference this morning that the drone strike on the kingdom's central crude-processing plant will neither threaten nor delay recently relaunched plans for an initial public offering (IPO).
Yasir Al-Rumayyan, chairman of Saudi Aramco and governor of the Public Investment Fund (PIF) stopped short of specifying a timetable to the IPO launch, however, but gave a window of 12 months. Many analysts now doubt the company will meet its own deadline.
The drone attacks on Saturday, which Riyadh and Washington blame on Tehran, cut Saudi Arabia's production by 5.7 million barrels per day. The price of oil surged by 20% earlier this week before leveling off around 14% higher than before the attacks.
The long-mooted IPO of up to 5% of Aramco's shares was to be the centerpiece of Saudi Arabia's Vision 2030 economic reforms."
According to Reuters, Saudi Aramco intends to sell 1% of the company, worth $20bn, later this year, and a similar percentage in 2020-21.
Piers Hillier, chief investment officer at Royal London Asset Management, told Al-Jazeera, "It would seem logical that Aramco's IPO will be delayed while the damage is assessed but beyond this we would expect that the risk premium that investors will require should the IPO go ahead will now be higher."
The long-mooted IPO of up to 5% of Aramco's shares was to be the centerpiece of Saudi Arabia's Vision 2030 economic reforms. The revived IPO plan will still face significant hurdles, including the ability of the kingdom to achieve the $2trn valuation it's been seeking for the company.