ISSN 2330-717X

How Aramco And Millions Of Saudis Proved IPO Skeptics Wrong – OpEd


By Faisal Faeq*


Brent crude has averaged about $64 per barrel in 2019, a relatively low oil price backdrop for the initial public offering (IPO) of Saudi Aramco. That makes the success of the share sale all the more significant.

If we take a few steps back to when the prospectus was being prepared, an independent third-party audit of Saudi Arabia’s oil reserves revealed that the Kingdom’s proven low-cost conventional oil reserves were far more valuable than other reserves globally. It also showed that Aramco’s profits of $111 billion were more than the net profits of the top five oil companies combined, and also higher than Apple’s profit in 2018.

Impressive stuff, but not, it seems, for some industry analysts who were skeptical about the Kingdom’s national oil company justified a $2 trillion valuation. 

The mid-September attacks on Saudi Aramco gigantic oil facility in Abqaiq were seized on to show, incorrectly as it turned out, that the country’s oil infrastructure was fragile.

It felt like there was an agenda at work that was attempting to portray a country failing in its attempts to reform. Despite such skepticism, there was little surprise for us that Saudi Aramco reached its $2 trillion market capitalization in only its second day of trading on Tadawul. The proof was in the pudding and the naysayers were proved wrong.


Saudi Vision 2030 is designed to be implemented in a low oil price environment. It is about ensuring that the Kingdom’s economy does not continue to be oil dependent and at the mercy of market fluctuations.

Look beyond the determinedly negative narrative and you will see that Saudi Aramco is the world’s largest state oil company, with export infrastructure and refining capability to match. It’s not just a about a fuel source either. The Kingdom’s hydrocarbons have an extremely valuable future in petrochemicals. 

That is why millions of Saudi citizens bought into the share sale, fulfilling a vision that was 90 years old.

• Faisal Faeq is an energy and oil marketing adviser. He was formerly with OPEC and Saudi Aramco. Twitter:@faisalfaeq

Arab News

Arab News is Saudi Arabia's first English-language newspaper. It was founded in 1975 by Hisham and Mohammed Ali Hafiz. Today, it is one of 29 publications produced by Saudi Research & Publishing Company (SRPC), a subsidiary of Saudi Research & Marketing Group (SRMG).

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