How will Aramco explain to prospective IPO shareholders that 25-30% of their production is sold internally to Saudi industry for $6 barrel.

[Jabbar + 465]

MASSIVE SUBSIDY $6 barrel oil to produce electricity, fill the tanks of their Maserati , and cool their buildings and homes.  

Still can't see this IPO happening.  

Saudi Arabia has the 5th largest energy consumption in the world.  While their economy is 22nd.

Subsidizing their population is fine.  It's their oil, their money and their population.

However, they want to bring Aramco out as a public company and sell 5% of the company FOR $100 BILLION DOLLARS. 

WHAT WILL SHAREHOLDERS SAY.

Saudi government makes their own rules. That does not fly in the real world.  A competitive world. A financial industry with Fiduciary Responsibility.

1. Explain Massive Subsidiary btw 2.5 to 3.0 million barrels day at $6.00 to subsidize your 20,000 royal family.

2. Explain reserve assets are not owned by Aramco.  They are owned by Monarchy government. Show the actual agreement with duration, and guarantees. 

3. Explain how the Government can change dividend or corporate tax rate on a whim as it just did. Those that giveth can taketh away.

4. Explain how the Government, NOT Aramco, decides how much oil to produce.

5. Explain how OPEC will view a Non National Oil Company. So a publicly traded company can not determine its operations and will have to comply with government minister dictate.

6. Please explain a 2 Trillion dollar valuation.

7. Explain how as a public company you will comply with even minimum  international human rights.

 

Edited October 7, 2019 by Jabbar

[Old-Ruffneck + 1,220]

I still would like to see some real oil people go see how much is left in their fields. To this day I can't seem to find any reports on geological studied or and tests that confirm the 250+bb still in the ground. My guess is half or less than that. Too many years at 8mbd. Inquiring minds should want to know before investing.

[Jabbar + 465]

1 minute ago, Old-Ruffneck said:

I still would like to see some real oil people go see how much is left in their fields. To this day I can't seem to find any reports on geological studied or and tests that confirm the 250+bb still in the ground. My guess is half or less than that. Too many years at 8mbd. Inquiring minds should want to know before investing.

I read article from oil engineer that wrote a report stating 51 billion barrels.

Also many stories over the recent past that the pressure drop is causing concern.  Saudis now very interested in Enhanced Oil Recovery.

[Guest]

On 10/3/2019 at 1:17 AM, Old-Ruffneck said:

Inquiring minds should want to know before investing.

No one will be so that's that situation solved