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Saudi Aramco Plans World's Biggest IPO

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Re: Saudi Aramco Plans World's Biggest IPO

#61

Post by ThrustVectoring »

adventured wrote: post #46
toomuchtodo wrote: post #28

Earlier quoted context omitted.

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...

That oil will still be worth trillions for the next two decades. It won't be worthless until the global economy has moved very substantially off of oil. It won't even plunge toward worthless until demand begins to dramatically fall off, which isn't going to occur in the next two or three years. The Saudis will likely have time to liquidate a very large portion of Aramco and its oil assets before the market for oil dr…

Burning gasoline isn't the problem, burning gasoline that's sourced from the ground is. It's possible to use a lot of electricity to run gasoline combustion backwards, turning CO2 and H20 into gasoline. It's currently not economical due to electricity prices, but it may be a better option to retrofit gasoline production rather than automobile fuel consumption.

Re: Saudi Aramco Plans World's Biggest IPO

#62

Post by acchow »

paulsutter wrote: post #60
Analemma_ wrote: post #22

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…

Saudi Aramco's annual revenue is over $300B, and their reserves are more than 260 billion barrels. Oil prices have ranged from $15-ish to $140-ish since 1990. So $2 trillion doesn't seem outlandish at all for Aramco. Early angel investors in Uber have made about 10,000x, plus or minus, so even if you're right there's no potential for shorting Aramco to be the best investment ever (Uber's seed round was at 4 millionis…

> Oil prices have ranged from $15-ish to $140-ish since 1990.

What is the relevance of past oil prices in the future? Especially in light of photovoltaics?

Re: Saudi Aramco Plans World's Biggest IPO

#63

Post by mathattack »

Analemma_ wrote: post #22

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…

The danger is that you're at risk to a surge in oil prices. While the company may not be well run, if oil prices rise, you could get killed in the short. The ideal trade would have some kind of oil price hedge too.

Re: Saudi Aramco Plans World's Biggest IPO

#64

Post by [deleted] »

mathattack wrote: post #63
Analemma_ wrote: post #22

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…

The danger is that you're at risk to a surge in oil prices. While the company may not be well run, if oil prices rise, you could get killed in the short. The ideal trade would have some kind of oil price hedge too.

[deleted]

Re: Saudi Aramco Plans World's Biggest IPO

#65

Post by mathattack »

defen wrote: post #43

They're trying to get out now by selling to suckers who don't realize that most of their oil assets are worthless. I don't mean that they've falsified accounts of how much oil they have, I mean that most of it is going to stay in the ground because it won't be worthwhile to pump it out.

Selling 5% barely qualifies as getting out. Perhaps it's a way to funnel money to specific families or people, but it would be very hard to sell the remaining 95%.

Re: Saudi Aramco Plans World's Biggest IPO

#66

Post by charlesdm »

Analemma_ wrote: post #22

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…

I'm not so sure. Their reserves are massive + cheap to extract. Oil isn't going to go away anytime soon, even if we wanted it to. And even if the value of crude dropped another 25-50%, it's still quite valuable.

The problem is that it's located in Saudi Arabia. I doubt they have decent corporate governance + non-interference from the state.

Re: Saudi Aramco Plans World's Biggest IPO

#67

Post by Gibbon1 »

adventured wrote: post #46
toomuchtodo wrote: post #28

Earlier quoted context omitted.

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...

That oil will still be worth trillions for the next two decades. It won't be worthless until the global economy has moved very substantially off of oil. It won't even plunge toward worthless until demand begins to dramatically fall off, which isn't going to occur in the next two or three years. The Saudis will likely have time to liquidate a very large portion of Aramco and its oil assets before the market for oil dr…

> (by some estimates, they'll be a net oil importer by 2030-2035).

That's kind of a 'funny' observation. Saudi Arabia can't ever be an oil importer since the only thing they have to exchange for oil is oil.

Re: Saudi Aramco Plans World's Biggest IPO

#70

Post by Aelinsaar »

eternalban wrote: post #17
Aelinsaar wrote: post #9

This is really not the time I'd be investing that heavily in Aramco. 30 Years ago, certainly, now... not so much.

30 years ago you would have needed a blue water navy and nuclear weapons.

It still might help to hold onto your investment...
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