Saudi Aramco officials and advisers are holding last-minute meetings with investors in an attempt to achieve as close to a $US2 trillion ($2.9 trillion) valuation ahead of an expected Sunday announcement that the initial public offering (IPO) will go ahead, according to three sources.
Failure to reach the target would cause a dilemma for Saudi Crown Prince Mohammed bin Salman – swallow the bitter pill of going ahead at a lower valuation or postpone the initial public offering (IPO) once again.
A weak outlook for oil prices, against a gloomy global economic picture and increasing climate change activism, could dampen investor interest, particularly in the Western world.
The state-owned oil major has also approached governments in the Gulf and Asia, including China, to try to secure the bulk of the investment from countries on friendly terms with Saudi Arabia, as the reception elsewhere has been cooler, sources have previously said.
Aramco has said it will pay a base dividend of $US75 billion, which at $US2 trillion would mean a dividend yield of 3.75 per cent, below those already offered by competitors like Exxon Mobil Corp and Royal Dutch Shell.
Shell’s dividend yield is over 6 per cent and Exxon’s over 5 per cent, according to Refinitiv data.