Saudi Aramco chairman defends oil giant’s possible IPO move

Khalid al-Falih, chairman of the national oil giant, told a panel discussion that the company is cutting costs but not investment in capacity, it was reported. But he predicted it would be reached before long. Khalid al-Falih spoke after a conference in Riyadh to say, “Demand will grow, as it has already started in 2015, and there will be a period not far into the future [when] demand will catch up with supply”.

Earlier this month, the International Monetary Fund (IMF) said growth in Saudi Arabia, a heavyweight member of the Organisation of Petroleum Exporting Countries, will slow to its lowest rate in seven years, as oil prices continue their dramatic fall.

The Saudi Arabian General Investment Authority will submit the proposal to the country’s cabinet by the end of the first quarter of 2016, the authority’s governor Abdullatif Al-Othman told Bloomberg.

He said some companies that do not have operations here have misconceptions about investing in the Kingdom.

YASREF, located in Yanbu’ Industrial City on the west coast of Saudi Arabia, can deliver up to 100,000 barrels per day of clean, high-octane gasoline through a gasoline complex using an advanced continuous catalytic reformer. Saudi Arabias foreign investment has typically been tied to oil, petrochemicals and infrastructure, so to counter the slump in those areas, the government is focusing on attracting investment in non-oil sectors, he said.

China is Saudi Arabia’s largest trading partner and Sinopec is now Saudi Aramco’s largest crude oil trading partner and onshore drilling service provider.

A slide in crude oil prices on continued Saudi investment in energy projects set the tone for financial markets in Europe as stocks and the currencies of exporters were dragged down, while havens, including gold and the Japanese yen, rallied.

Rather, “it’s a sign of the times” as the kingdom opens for business, he said.

“There are of course commercial, legal and sovereignty issues that have to be studied, not only within the company and its boardroom but also with the decision makers of Saudi Arabia”.

Oil still made up 73 percent of revenue previous year, the finance ministry has said, down from about 90 percent previously. Please see our terms of service for more information.

Kuroda said in an interview on January 22 in Davos, Switzerland, that “we don’t think the current market situation has been affecting corporate behavior unduly”.