The Saudi Arabian Oil Co. board sees too many legal risks should the state energy giant conduct its planned IPO in New York, Reuters reported, citing five sources.
Possible legal risks include the U.S. Justice Against Sponsors of Terrorism Act; proposed legislation that would impose criminal penalties on foreign countries that unite to limit fossil fuel supplies and set prices; and existing climate change-related lawsuits.
The board agreed at an August meeting that the company would need to be offered sovereign immunity from legal action before a U.S. float is even considered, according to a source privy to the IPO plan. One source said a New York listing is no longer on the table.
Still, Crown Prince Mohammed bin Salman will make the final decision.
Four sources said Riyadh and London are now the front-runners. A local listing will reportedly come first, followed by an international IPO.
Responding to Reuters, Saudi Aramco said it is talking to the shareholder with regards to the IPO. Also, the timing will hinge on market conditions and the shareholder's decision.
According to the report, the IPO is unlikely to proceed until Saudi Aramco acquires a majority stake in Saudi Basic Industries Corp. Two sources said the state energy giant has asked major banks to make pitches for potential roles in the planned IPO.
