Basic elements of oil giant’s governance, structure and financial disclosures remain unresolved
The difficulty of quickly turning a behemoth that functions largely to support the Saudi budget into a company accountable to shareholders has crystallized over the past couple of months.
.. The prince has said the company could be valued at more than $2 trillion when it is listed.
.. Currently, about 90% of Aramco’s profit goes to the Saudi government and members of the royal family, say five people familiar with the finances. The rest, they say, gets reinvested in the company.
.. the government and Aramco have brought in a host of foreign advisers, including banks; accounting firms PricewaterhouseCoopers LLP and Ernst & Young LLP; and law firms
.. The IPO is part of his plan to wean Saudi Arabia’s economy of its dependence on oil.
.. would put IPO proceeds and much of Aramco’s stock into a giant sovereign-wealth fund. That fund would then sink tens of billions of dollars into international and domestic companies outside the oil industry.
.. Prince Mohammed also met dignitaries including former British Prime Minister Tony Blair.
.. Aramco and the government are also trying to figure out how to handle vast subsidies on Aramco’s books, including natural gas that it sells at a loss to government-owned power plants
.. In some cases plants pay about two-thirds of the cost of pumping the gas; at other times the utilities don’t pay at all
.. The company currently requires that 80% of employees in each division be Saudi nationals, which is a challenge in some areas, like accounting, where there is a dearth of trained Saudis