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Saudi Aramco Plans World's Biggest IPO

bloomberg.com

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Re: Saudi Aramco Plans World's Biggest IPO

#21

Post by nickles »

mars4rp wrote: post #8

They say global economy worth $100 trillion. the whole oil industry should worth $18 trillion, is oil %18 of oil economy? I say no. so Aramco doesn't worth $2 trillion either.

The article states that Saudi Aramco controls ~20% of the world's oil supply. The $18 trillion valuation of the global oil industry that you offered would imply a $3.6 trillion valuation for Saudi Aramco. Obviously there are many nuances to this, but $2 trillion is not unreasonable superficially. It's important to note that state owned oil companies tend to trade at lower market caps after IPO for a variety of reasons.

Re: Saudi Aramco Plans World's Biggest IPO

#22

Post by Analemma_ »

If it were possible to get in short on this (it's usually not, right after an IPO), that would be the best investment decision anyone's ever made. $2 trillion is ridiculous. Remember when PetroChina hit $1 trillion market cap in 2007, and it was supposed to be a huge milestone for publicly-traded state oil firms? Now they're at a little over a tenth of that. Every reason to expect that the same thing will happen here.

Re: Saudi Aramco Plans World's Biggest IPO

#24

Post by mars4rp »

nickles wrote: post #21
mars4rp wrote: post #8

They say global economy worth $100 trillion. the whole oil industry should worth $18 trillion, is oil %18 of oil economy? I say no. so Aramco doesn't worth $2 trillion either.

The article states that Saudi Aramco controls ~20% of the world's oil supply. The $18 trillion valuation of the global oil industry that you offered would imply a $3.6 trillion valuation for Saudi Aramco. Obviously there are many nuances to this, but $2 trillion is not unreasonable superficially. It's important to note that state owned oil companies tend to trade at lower market caps after IPO for a variety of reason…

>Saudi crude accounts for about 1 out of every 9 barrels of global production.

Re: Saudi Aramco Plans World's Biggest IPO

#26

Post by woodpanel »

jshorty wrote: post #2

I'm curious about their long-term outlook. My understanding is that OPEC counties are currently desperate enough for money that they can't agree to limit output, thereby forcing the price further down. Anyone have better insight here?

Well at least in the short-term: Due to the oil-price shock Saudi Arabia's state earnings turned negative and at the current burn-rate are supposed to erase it's monetary assets rather in months than in years.

Re: Saudi Aramco Plans World's Biggest IPO

#27

Post by Animats »

cloudjacker wrote: post #7
Animats wrote: post #6

If you thought owning part of a company in China was difficult, consider the problems of owning part of one in Saudi Arabia.

A is not difficult, and B is also won't be difficult as it will list on the London Stock Exchange or one in New York

It's not that you can't buy shares. It's that ownership doesn't give you any influence over the thing. Look at Yahoo's troubles with Alibaba.

Re: Saudi Aramco Plans World's Biggest IPO

#28

Post by toomuchtodo »

eric_arrr wrote: post #25

I've got your prospectus right here: http://rameznaam.com/wp-content/uploads/2014/10/Welcome-to-t...

And http://rameznaam.com/wp-content/uploads/2015/04/Nature-Clima...

As soon as we hit $100/kWh in the next year or two, that oil is worthless [1] (Tesla will supposedly hit this target when the Gigafactory is at full capacity).

Clean energy investments year over year: https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iWfsqt_Qmf9...

[1] https://flowcharts.llnl.gov/content/energy/energy_archive/en...

Re: Saudi Aramco Plans World's Biggest IPO

#29

Post by mars4rp »

cloudjacker wrote: post #20

hm, just $100,000,000,000 for less than 5% of Saudi Aramco. That's quite low, valuing themselves at 2 trillion. Prior pie in the sky estimates had put them at 10 trillion dollar company. So maybe after the independent audit they'll release the shares, wall street traders will bid it up 500% and then they'll impress everyone with that share price performance and 10 trillion dollar valuation.

10 trillion is crazy! the US GDP is 16 trillion and world economy worth 100 trillion, to think one company worth this much is ....

Re: Saudi Aramco Plans World's Biggest IPO

#30

Post by ianferrel »

mars4rp wrote: post #24
nickles wrote: post #21

Earlier quoted context omitted.

The article states that Saudi Aramco controls ~20% of the world's oil supply. The $18 trillion valuation of the global oil industry that you offered would imply a $3.6 trillion valuation for Saudi Aramco. Obviously there are many nuances to this, but $2 trillion is not unreasonable superficially. It's important to note that state owned oil companies tend to trade at lower market caps after IPO for a variety of reason…

>Saudi crude accounts for about 1 out of every 9 barrels of global production.

Production is analogous to revenue, and is the wrong measurement.

Reserves matter more for market cap.

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