Saudi Arabia's Aramco, the world's largest oil company, said on Monday that it is still on track for its initial public offering in the second half of 2018. It will be listed on the Saudi domestic stock market but where it will be listed overseas is still up in the air.
Here's why it's a risky bet no matter where the shares are listed.
I am afraid the energy created by dinosaurs is becoming one; oil is a dying commodity. Even Aramco's CEO Amin Nasser admitted as much on CNBC on Monday, noting that his company is doing what it can to "minimize our carbon footprint."
Over 70 percent of every barrel of Aramco crude is used for autos and trucks in one way or another, Mr. Nasser said. About 50 percent is gasoline alone and the rest is used for diesel, motor oil, tires and other car-related products. With a worldwide push to eliminate the internal combustion engine, the demand for oil five years from now will be far less than it is today. That doesn't bode well for Aramco's business model.
General Motors, Volvo and Mercedes have all announced plans to phase out gasoline powered cars. The alternative energy market is growing rapidly as natural gas, wind and solar replace oil. In the U.S. alone, renewable energy sources accounted for 10 percent of total energy consumption and 15 percent of electricity generation, according to the U.S. Energy Information Administration.