Saudi Arabia is considering plans for a follow-on share offering in state oil company Saudi Aramco, opens new tab to raise at least 40 billion riyals ($10 billion) as early as February, Bloomberg News reported on Wednesday, citing people familiar with the matter, Report informs via Reuters.
The report follows the Saudi government's order on Tuesday for Aramco to halt its oil expansion plan and to target a maximum sustained production capacity of 12 million barrels per day (bpd), 1 million bpd below a target announced in 2020.
Saudi Arabia's surprise reversal of its oil expansion ambitions was at least six months in the making, said an industry source, after Riyadh concluded its vast spare capacity was enough to supply markets during crises and further investments in new fields would make no economic sense.
Saudi Aramco is the world's biggest oil company, with a market value of $2.02 trillion. It completed the world's largest initial public offering in late 2019, raising $25.6 billion and later selling more shares to raise the total to $29.4 billion.
Its shares were down about 2% after the report on the follow-on offering. The company declined to comment.
The Saudi government directly holds a 90.19% stake in Aramco, the sovereign Public Investment Fund (PIF) 4% and PIF subsidiary Sanabil another 4%, LSEG data shows.
In September of last year the Wall Street Journal reported that Aramco was considering selling a stake worth as much as $50 billion through a secondary share offering on the Riyadh bourse after consultations with advisers.
