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Doubts grow over Saudi Aramco IPO as preparations stall

Saudi Arabia's preparations for the public listing of state oil giant Saudi Arabian Oil Co. have slowed in recent months, raising doubts among government officials and people close to the process about whether the IPO would take place at all, The Wall Street Journal reported July 5.

Government officials said that in recent months, Saudi Aramco executives and outside advisers have become more vocal about telling Saudi Crown Prince Mohammed bin Salman the problems of going public, according to the report.

Officials said they have found various legal risks stemming from an international listing. They have also become less interested in an alternate plan to list a small portion of Aramco on the Saudi Stock Exchange (Tadawul).

People involved in the process also said that law firms invited for a possible role in the IPO have been told by Aramco officials that they were not planning to make a decision anytime soon.

Bankers working on the IPO are also frustrated by the delays, according to people familiar with the process.

"Everyone is almost certain [the IPO] is not going to happen," an Aramco senior executive told the WSJ.

Saudi Arabia plans to sell up to 5% of Aramco. The offering could raise as much as $100 billion if the oil company reaches a projected $2 trillion valuation.

After being originally scheduled for 2017, Aramco's IPO has been postponed several times, and reports in early 2018 said the listing could be delayed until 2019.

Saudi Energy Minister Khalid al-Falih, who also serves as Aramco's chairman, warned in June that many factors remain unresolved before a final decision is made on the IPO.

While he hopes the IPO will happen in 2019, Falih said Aramco's IPO "does not have to happen at a certain date" because "timing is not critical" to the Saudi Arabian government.