Energy giant: Aramco declares $1.71 trillion valuation in blockbuster IPO

Saudi Arabia is pulling out all the stops to ensure the success of the Aramco IPO

In a statement Sunday, Saudi Aramco said it was aiming to sell about 1.5% of its 200 billion shares in a partial privatization for between 30 riyals ($8) and 32 riyals ($8.53) each.

Saudi Aramco's multibillion-dollar initial public offering (IPO), probably the biggest in history, shifted to full gear as its share price was announced and subscription to the world's biggest oil company commenced on Sunday.

If Aramco manages to raise funds at top end of the range, it could just beat the record-breaking $25 billion raised by Chinese e-commerce giant Alibaba when it listed in NY in 2014.

Saudi Aramco is the kingdom's oil and gas producer, pumping more than 10 million barrels of crude oil a day, or some 10% of global demand.

Aramco has scrapped plans to market the float to U.S. investors in favour of a careful focus on Middle Eastern institutional investors and ultra-high net worth individuals in the region where the company is confident of support.

Retail investors have until Nov 28 to sign up for the IPO while institutional investors can subscribe until Dec 4.

In its original prospectus, published on Nov.9, Aramco said the domestic IPO would be made to institutional investors outside the United States according to Regulation S of the United States Securities Act of 1933, and inside the United States under the Rule 144A of the US Securities Act.

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The major IPO values Aramco between $1.6 and $1.7 trillion.

That means Aramco, the most profitable company in the world, could be worth between 6 trillion riyals ($1.6 trillion) and 6.4 trillion riyals ($1.7 trillion) - making it also by far the world's most valuable company ahead of Apple.

The Aramco listing is part of a year-end equity market rush, with Alibaba taking orders for a Hong Kong listing that is expected to raise up to US$13.4 billion.

Aramco past year posted $111bn in net profit. The decision has been a long time coming as there have been a number of delays since it was first announced in 2016, including the beginning of a process to acquire a 70% stake in petrochemicals maker Saudi Basic Industries Corp.

Aramco will reveal the final price of its shares, and its valuation, by early next month although has yet to announce a date when its shares will begin to trade.

Saudi Arabia believes its giant state oil monopoly is worth as much as $1.7 trillion.

The company said it had hired a host of worldwide banking giants including Citibank, Credit Suisse and HSBC as financial advisors and book-runners.

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Kayle is a multimedia journalist focused on climate and environmental issues and contributes to The Irish Times and The Green News.