Davos WEF
Davos WEF

Saudi oil giant Aramco is ready for 2018 IPO, but waiting for OK from government, CEO says

Key Points
  • Saudi Aramco is ready for its hotly anticipated public share offering in the second half of 2018, Aramco President and CEO Amin Nasser tells CNBC.
  • Nasser says the timing of the IPO is in the hands of Aramco's sole shareholder, the Saudi government.
  • The government has yet to determine where shares of Aramco will be listed.
Saudi Aramco CEO: Company is ready for IPO in second half of 2018
Saudi Aramco CEO: Company is ready for IPO in second half of 2018

Saudi Aramco, the world's largest energy company, is fully prepared for a hotly anticipated public share offering in the second half of 2018, says Aramco president and CEO Amin Nasser.

It is just waiting for one thing, says Nasser. The green light from its sole shareholder: the Saudi government.

"In terms of readiness, we are ready. As we always said, the company by the second half of 2018 will be ready," Nasser told CNBC in an interview with Andrew Ross Sorkin from the World Economic Forum in Davos, Switzerland.

The sale of roughly 5 percent of Aramco is expected to value the company at $1 to $2 trillion, making it the largest initial public offering ever. The IPO is the cornerstone of Crown Prince Mohammed bin Salman's plan to create the world's largest sovereign wealth fund and diversify Saudi Arabia's oil-dependent economy.

But rumors about delays to the share sale have long swirled, fueled by the slow drip of information on key aspects of the IPO, including where the shares will be listed.

Amin Nasser
Katie Kramer | CNBC

"It is all depending on the shareholder's decisions where to list because we need to coordinate with the other markets when the decision is made," Nasser said.

"So from our side as a company, we are ready by the second half of this year, and the rest is on the shareholder's hands," he said.

Asked whether that means the Saudi government is not ready for the IPO, Nasser said it's not about being ready.

"It's about evaluating all the information that is being passed to the government in terms of different markets that we have in terms of listed venues, whether it is in the UK, or New York or Hong Kong or other markets," he said.

"They are taking their time, rightfully so, to decide which market to list on, and when the decision is made, the company is ready to march."

Nasser said Aramco still plans to list shares on at least one foreign stock exchange, despite reports that it may only trade on Saudi Arabia's Tadawul exchange.

The IPO is complicated because Aramco underwrites the finances of the kingdom. Investors have wondered how much light the Saudi government will shed on its oil reserves and the future viability of its fossil fuels business.

There are also questions about how Saudi Arabia will balance the national priorities and social welfare spending, funded by oil revenues, with Aramco's duty to shareholders as a public company.

Nasser told CNBC in an interview last year he believes the priorities of the Saudi government and Aramco's future shareholders will be in alignment.

Programming note: More of Andrew Ross Sorkin's interview with Amin Nasser will air Wednesday morning on "Squawk Box."