U.S. and Japanese officials are lobbying Saudi Arabia to take its state-owned oil company’s IPO, priced at high as $100 billion, to an international offering over fears China will host the listing, The Wall Street Journal reports.
The U.S. and Japan fear the extent of China’s influence should it host Saudi Aramco’s IPO and sell the stock to Chinese-owned companies. China is the world’s top oil importer, while Saudi Arabia has about 16 percent of the world’s oil reserves and is one of the largest exporters.
Gaining control of the listing, and then stock, would provide China special access to Saudi Arabia’s crude oil, potentially cutting back or blocking access for other nations. Japan is dependent on Saudi Aramco for a third of imported oil, while the U.S. is worried of its longtime ally growing too close to China, WSJ reports.
U.S. and Japanese officials have previously lobbied Saudi Arabia to list Aramco’s IPO on a stock exchange in their respective countries.
Saudi Aramco has invited banks to make bids to become coordinators and book runners for its IPO, and will pick a group in 2018 to organize its stock listing. Banks have not been told where the stock will be listed, Bloomberg reports.
“The political leadership, rather than the company, has to strategically chose a direction before other parts of the IPO process can meaningfully move forward,” Eurasia Group Middle East and North Africa head Ayham Kamel told Bloomberg.
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