Saudi Arabia

UAE oil IPO looks safer than Saudi for foreigners

6 Sep 2021

Two years after largely spurning Aramco’s listing, international investors have another chance to buy into a Gulf national oil group. At a potential $11 bln, ADNOC’s drilling arm is smaller and in a less tricky locale. A successful sale would confirm the UAE’s overseas appeal.

Aramco’s tricky balancing act gets easier

9 Aug 2021

The Saudi oil giant’s ultimate boss, Crown Prince Mohammed bin Salman, wants it to help fund the kingdom’s pivot away from crude. A strong first half makes it easier to do that and pay dividends. Unlike last year, Aramco can also meet its various demands without debt spiking.

Cox: Saudi may have a super-green future after all

5 Aug 2021

At a recent G20 summit, the kingdom didn’t just align with U.S. and European climate crusaders. Its delegates even tried to break an impasse with India on coal. It’s a sign of how confident Saudi has become in its ability to manage, and profit from, the energy transition.

OPEC spats are less important than its sweet spot

6 Jul 2021

The UAE stymied a deal to unwind oil output cuts. That will further strain relations with Saudi Arabia, but Riyadh will probably find a compromise. Meanwhile, the cartel and its allies have unusual scope to keep crude prices high without losing market share to U.S. producers.

Aramco’s mystery sale saga follows familiar plot

28 Apr 2021

The Saudi oil giant is in talks to sell a 1% stake to a “leading global energy company”, Crown Prince Mohammed bin Salman says. As with previous puzzles over international IPO venues, there are plenty of potential candidates. And as with those, it’s possible nothing happens.

Aramco’s next share offer is just as hard a sell

22 Mar 2021

The $1.9 trln Saudi oil giant’s annual results showed Covid-19 scars. If Riyadh sells more shares, Aramco’s low costs and spare capacity may be appealing to non-Saudi investors that largely sat out its 2019 IPO. But many environmental, social and governance red flags remain.

Biden finds Mohammed bin Salman is too big to nail

2 Mar 2021

The American president has taken heat for inaction over Saudi Arabia’s crown prince, despite judging him responsible for journalist Jamal Khashoggi’s murder. But MbS’ influence has metastasized across global finance. The fallout from sanctioning him would be more than diplomatic.

Saudi’s HQ edict puts global banks in awkward spot

23 Feb 2021

The kingdom has ruffled feathers with plans to withhold state contracts from groups that don’t base their Middle East headquarters in Riyadh. The rule may not apply to all sectors. Even so, bankers face a tricky call over whether to up sticks or risk angering a valuable client.

Saudi gets a partial brand detox with Qatar thaw

6 Jan 2021

Ending Riyadh’s three-year embargo with Doha gives both states a minor economic boost. It also removes one of U.S. President-elect Joe Biden’s Saudi-related headaches. But its main benefit could be to reduce the extent to which foreign investors see the kingdom as kryptonite.

Aramco-Reliance is one deal too strategic to fail

11 Nov 2020

The Saudi oil giant’s imputed $75 bln valuation of Mukesh Ambani’s oil-to-chemicals unit last year now looks rich given weak demand and crude prices. That could mean terms get tweaked for the 20% stake sale. But the long-term significance for both sides will help get it done.

Aramco’s mighty value reflects mini investor base

3 Nov 2020

Shares in the $1.8 trln Saudi oil giant are flat since January, while those of western rivals like BP have halved. Aramco’s solid and more-secure dividend explains some of the difference. But a tiny free float comprised of investors who are less likely to sell helps, too.

Aramco pipeline spinoff plan is born of necessity

14 Oct 2020

The $1.9 trln oil giant is echoing Abu Dhabi-based peer ADNOC by discussing a part-sale of its distribution network with BlackRock and others. Aramco’s foreign investors’ dividend is safe. But financing state payouts and other activities requires the $10 bln it could raise.

Saudi $46 bln bank M&A works best for crown prince

12 Oct 2020

A union of state-backed NCB and Samba gives leader Mohammed bin Salman a lender with more scope to fund his mega-projects. The latter group’s shareholders are getting a stingy premium. The prospect of juicy shared cost savings should nonetheless get the deal over the line.

Review: MbS, Saudi Arabia’s sharpest prince

4 Sep 2020

From the Ritz rumble to unleashing a sovereign fund, "Blood and Oil" brings together the antics of the kingdom’s crown prince in a gripping page-turner. Mohammed bin Salman’s rise through grisly palace politics to unprecedented power elicits horror and, sometimes, admiration.

Aramco’s dividend defences are triple-locked

10 Aug 2020

The Saudi state oil giant is disbursing $18.8 bln despite quarterly earnings slumping to $6.6 bln. Ultra-low costs lend an edge over Western rivals. Low debt and priority for private shareholders are extra buffers for those willing to overlook environmental and social concerns.

Saudi $45 bln bank M&A is haunted by past failure

25 Jun 2020

The kingdom’s biggest lender NCB wants an all-share combo with Samba, having dropped its pursuit of Riyad Bank last year. Local retail investors may shrug at the prospect of creating a banking champion. That means the acquirer will have to pay towards the top of a mooted range.

Sovereign funds are having their rainy-day moment

23 Jun 2020

Temasek is stepping in to support Singapore Airlines and a marine group. It makes sense to shore up strategic assets at home when global valuations are high and cash is on hand. Peers from Abu Dhabi’s Mubadala to Malaysia’s Khazanah are likely to follow.

Aramco’s SABIC saga ends in unhappy compromise

17 Jun 2020

The $69 bln that the oil giant has ended up paying for a 70% stake in the chemicals firm is a lot more than its current value. Aramco’s consolation is that it can pay SABIC’s owner, a Saudi wealth fund, over a longer period. But neither buyer nor seller is getting what they want.

Oil prices are stuck in a narrow tunnel

12 Jun 2020

After spiking above $40 a barrel, crude has now slumped again. Voluntary and enforced supply cuts have put a floor under the market after April’s shock falls. But the risk of a second coronavirus wave, and the difficulties of coordinating production hikes, point to a ceiling.

Aramco well placed for timid oil recovery

12 May 2020

The Saudi oil giant’s earnings slumped 25% in the first quarter, but its cash pile means it can keep dividends flowing. True, Aramco may not prevail in its Atlas-like attempt to prop up the world’s oil market alone. But there are tentative indications that it might not have to.