* Malaysia's state oil firm says not taking part
* Russia's Lukoil says won't be buying shares
* Aramco yet to reveal any major foreign interest (Adds background on other sovereign investors, quotes, background)
KUALA LUMPUR/LONDON Nov 22 (Reuters) - With Saudi Aramco yet to name any major foreign investors in its upcoming share sale, Malaysia's state energy company Petronas decided to take a pass on Friday.
Expectations that Aramco customers and allies around the world would take significant stakes in the company have so far not materialised, with the listing looking like it will be reliant on local retail and institutional investors.
Petronas follows Russia's second largest oil producer Lukoil in turning its back on the initial public offering (IPO) which is likely to rank Aramco as the world's most valuable company.
Petronas and Aramco have a joint venture in a $27 billion refinery and petrochemicals complex in southern Malaysia that is set to start commercial operations this year.
Aramco kicked off the sale process on Nov. 3 after a series of false starts and Petronas, which has a joint venture with the Saudi firm in Malaysia, said it had been asked to invest.
"Petronas would like to confirm that after due consideration, the company has decided not to participate in Saudi Aramco's initial public offering exercise," Petronas said in an emailed statement.
Aramco is a major oil supplier to China, Japan and South Korea and their plans for the IPO are not yet clear, however, the head of Japan's largest refiner said earlier this month that Japanese companies were unlikely to invest because it was difficult to ascertain Aramco's true value.
Aramco plans to sell 1.5% of the company, looking to raise up to $25.6 billion and giving the company a potential market value of between $1.6 trillion and $1.7 trillion.
It is the centrepiece of Crown Prince Mohammed bin Salman's plans to diversify the Saudi economy away from its reliance on oil.
But the company has cancelled marketing roadshows for its listing outside of the Gulf because of the lack of interest from foreign institutional investors.
That has raised questions about to what extent the listing can really diversify the country's economic interests.
"Just selling a 1.5% stake in an oil company is not really going to achieve an enormous amount," said Charles Hollis, a former UK-Saudi diplomat and director at intelligence consultancy Falanx Assynt.
Aramco did not immediately respond to a request for comment on potential anchor investments or the impact its IPO will have on diversifying the economy.
Saudi Arabia's Samba Financial Group said on Thursday that the IPO has attracted about 73 billion riyals ($19.47 billion) in institutional and retail orders so far.
Although no major state company or fund has stepped forward, talks have been taking place with sovereign investors including the Abu Dhabi Investment Authority, Singapore's GIC and other funds, sources have told Reuters. ($1 = 3.7501 riyals) (Reporting by Krishna N. Das; Writing by A. Ananthalakshmi and Rachel Armstrong Editing by Kim Coghill and Elaine Hardcastle)