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Saudi government suggesting 2021 for Aramco IPO, will depend on oil market conditions: Aramco CEO

Abu Dhabi — Saudi Aramco's long-delayed initial public offering will have to wait until its acquisition of petrochemicals firm Sabic is complete, the CEO of the Saudi state-owned oil giant said Monday.

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Speaking at the ADIPEC conference in Abu Dhabi, Amin Nasser said the Saudi government "is suggesting 2021 for IPO listing, depending on market conditions at that time."

Saudi Arabia has recently shifted its focus to having Aramco acquire a strategic stake in Saudi petrochemicals firm Sabic from the state Public Investment Fund.

"[The Sabic deal] needs to be completed first before you can list Saudi Aramco, and that will take some time," Nasser said.

"Then you need to reflect that in your balance sheet for at least a year before you can list Saudi Aramco. And this is where they are talking about 2021 and depending on the market conditions at that time the government will list it."

Previously, Nasser had said the Sabic acquisition could delay the IPO until 2020 or later.

The IPO of Aramco was the centerpiece of Saudi Arabia's ambitious economic reforms, known as Vision 2030. The plan was to use the proceeds from listing up to 5% of the company's shares to fund programs that would diversify the economy, and reduce Saudi Arabia's reliance on oil revenues.

"The new tax agreement was signed with the government, the bylaws we have changed to facilitate the listing of Saudi Aramco... all the needed elements to facilitate the listing of Saudi Aramco were done and completed," it said.

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In late August, the Saudi government amended its concession agreement with Aramco, laying the groundwork for the IPO.

The amendments included issuing a new hydrocarbons law and slashing Aramco's tax rate to 50% from 85%.

SABIC FOCUS

Explaining the rationale behind the Sabic deal, Nasser said it was about expanding its footprint in the petrochemical sector, which is increasingly becoming the driver of global oil demand growth.

"We have a global footprint [in oil and gas], but we look at the petrochemicals and we [don't have as big] a global footprint. We are not as strong [in petrochemicals]," he said. "We have ambitions to shift 2 million barrels of crude to petrochemicals to 3 million. For that we needed an acquisition."

Nasser also confirmed that it is continuing talks with Russia's Novatek to become the second-largest stakeholder in new Arctic LNG 2 project.

"We are in discussions about a potential JV with Novatek in Arctic LNG 2," he said. "Novatek also has other partners... it depends on the discussions. We hope that we can [finalize] the agreement sometime soon but we don't know yet."

Previously, Russian and Saudi officials have indicated that the two companies may sign an initial agreement by the end of this year.

Novatek is the main shareholder in Sibur, which is in talks over a potential petrochemical joint venture with Aramco in Jubail. Saudi Arabia also plans to invest $1 billion in oil and gas field service projects with Russia.

--Miriam Malek, miriam.malek@spglobal.com

--Herman Wang, herman.wang@spglobal.com

--Rosemary Griffin, rosemary.griffin@spglobal.com

--Edited by Jonathan Fox, newsdesk@spglobal.com