New base 04 november 2019 energy news issue 1291 by khaled al awadi

Copyright © 2019 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 1
NewBase Energy News 04 November 2019 - Issue No. 1291 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE: Enec hosts nuke project stakeholders networking forum
ENEWC + NewBase
The Emirates Nuclear Energy Corporation (Enec) recently hosted a stakeholder networking forum
in Abu Dhabi, bringing together representatives from more than 30 governmental entities from
across the UAE.
Stakeholders learnt about the latest developments on the UAE Peaceful Nuclear Energy Program,
as well as the latest progress updates on operational readiness preparations by the operating and
maintenance subsidiary Nawah Energy Company (Nawah) for the first unit of the Barakah Nuclear
Energy Plant, said a statement from Enec.
The forum provided opportunities for networking, followed by progress updates and Q&A sessions,
it stated. Enec is working to develop the Barakah Nuclear Energy Plant in accordance with the
highest international standards of quality and safety, while maintaining a high level of stakeholder
cooperation and alignment.
The Emirati group said work was progressing well on the Barakah unit with the overall construction
of the four units standing at more than 93 per cent. Work on the Unit 4 is more than 82% complete,
Unit 3 over 91% and Unit 2 more than 95%, it stated.
Enec said construction work on the Unit 1 was fully complete and it was currently undergoing
commissioning and testing, prior to regulatory review and receipt of the Operating License for Unit
1, from the Federal Authority for Nuclear Regulation (FANR).
A subsidiary of the Enec and partially owned by the Korea Electric Power Corporation (Kepco),
Nawah has been mandated to safely operate and maintain Units 1 to 4 in Barakah in adherence to
the highest standards of safety, security and quality, and to the UAE’s commitment of operational
transparency, it added.-
www.linkedin.com/in/khaled-al-awadi-38b995b

Oman: Tethys Oil farms into Block 56 onshore Oman
Oman Observer
Tethys Oil AB, through its wholly owned subsidiary Tethys Oil Oman Onshore Limited, has entered into
an agreement with Biyaq Oil Field Services to acquire a 20 per cent interest in the Exploration and
Production licence covering Block 56 onshore Oman. The transaction is subject to government approval,
the Swedish based energy firm announced in a press statement.
Block 56 covers an area of 5,808 km2 in the south-eastern part of Oman some 200 km south of Blocks
3&4. To date 11 wells have been drilled on the Block and all but one have encountered oil or oil shows,
although none have been determined to be commercial.
The current operator has successfully drilled three of these wells. A work programme to flow test up to
three wells is currently being prepared. In consideration for the 20 per cent interest acquired, Tethys Oil
will pay to Biyaq a sum of up to $9.5 in a combination of cash and carry, of which a large proportion is
expected to be recoverable from future production in the event of a commercial discovery.
“We are delighted to announce this opportunity to increase our Omani portfolio of assets with an interest
in Block 56. The Block is an appraisal opportunity with excellent exploration potential in an area where
Tethys Oil’s knowledge and experience will eminently complement the work of the current partnership.
We look forward to be part of what promises to be an exciting future for Block 56,” says Magnus Nordin,
Managing Director of Tethys Oil AB.

The Block lies at the intersection of different geological provinces including the prolific South Oman Salt
Basin. It offers exploration potential in multiple play concepts, both proven and unproven, many of which
are familiar to Tethys Oil from its current operations in the country.
The licence for Block 56 is governed by an Exploration and Production Sharing Agreement signed in
November 2014. Its initial three-year exploration phase has been extended until December 2020 and
the partners have the option to enter into a second exploration phase ending in December 2023.
Upon completion of the transaction, Tethys Oil will hold a 20 per cent interest in Block 56 with Biyaq
holding 5 per cent, Intaj LLC will hold 25 per cent and the operator Medco Arabia Ltd holding the
remaining 50 per cent.
ABOUT TETHYS OIL in Oman:-
Tethys Oil acquired interest in the license for Blocks 3&4 in 2007. The blocks cover an area of
29,130 km2 in the central eastern part of Oman. Tethys Oil, through its wholly owned subsidiary
Tethys Oil Block 3 & 4 Ltd, has a 30 percent interest in Blocks 3&4. Partners are Mitsui E&P Middle
East B.V. with 20 percent and the operator CC Energy Development S.A.L. (Oman branch) holding
the remaining 50 percent.
In December 2017, Tethys Oil’s operations in Oman expanded when the exploration Block 49 was
awarded to Tethys Oil as operator. Block 49 covers an area of 15,439 km2 in the south west part of
Oman, bordering Saudi Arabia. Tethys Oil holds 100 percent of Block 49. The combined area of
Blocks 3&4 and Block 49 amounts to almost 45,000 km2, one of the largest concession holders in
Oman in terms of acreage.

Saudi Crown Prince Gives Green Light for Aramco IPO
Bloomberg - Javier Blas
Saudi Crown Prince Mohammed bin Salman finally gave the go-ahead for the initial public offering
of Aramco, deciding there’s enough support from local investors for what’s likely to be a record
share sale.
The crown prince made the decision at a meeting he chaired on Friday and an official announcement
is likely as soon as Sunday, according to people familiar with the matter, who asked not to be named
before an official statement.
The partial privatization will be a deal like few others and the biggest change to Saudi oil industry
since the company was nationalized in the 1970s. Aramco, which pumps 10% of the world’s oil from
giant fields beneath the kingdom’s barren deserts, is the most profitable company globally and the
backbone of the kingdom’s economic and social stability.
First suggested by Prince Mohammed in 2016, the IPO was delayed several times as international
investors balked at the $2 trillion valuation he placed on the company. An earlier plan to kick off the
share sale in mid-October was shelved after bankers received lukewarm interest from money
managers, and the deal will likely rely heavily on Saudi money. It’s not clear if the prince is willing
to accept a lower valuation.
The valuation will probably be closer to $1.5 trillion, Reuters reported, citing people familiar with the
matter. Aramco officials are meeting with global institutional investors and have approached
governments in the Gulf and Asia, including China, the report said.
The sale is key to Prince Mohammed’s Vision 2030 plan to overhaul the Saudi economy and end
the kingdom’s reliance on oil exports. The proceeds from the IPO will boost the firepower of the
OPEC nation’s sovereign wealth fund.
Grabbing a role in the deal has been one of the most hotly contested mandates for global banks.
More than 20 are working on the deal, with the top roles going to firms including Citigroup Inc.,
Goldman Sachs Group Inc., and JPMorgan Chase & Co.
But the path to today’s decision hasn’t been smooth. After investors pushed back on the Prince
Mohammed’s $2 trillion valuation, the original plan to list Aramco in either New York or London was
dropped in favor of a Riyadh-only flotation.
To get the deal done, Aramco’s bankers will need hefty contributions from the kingdom’s wealthiest
families, many of whom have already been targeted in the 2017’s corruption crackdown that saw
scores of rich Saudis detained in Riyadh’s Ritz-Carlton Hotel. Authorities said they raised over $100
billion in settlements from people accused of graft.
Local asset managers, including those looking after government funds, have also been asked to
make significant contributions, while domestic banks have been told to lend generously so retail
investors can buy Aramco shares, according to people familiar with the situation.

Aramco must also contend with the strengthening global movement against climate change that’s
targeted the world’s largest oil and gas companies. Many fund managers are concerned the shift
away from the internal combustion engine -- a technology that drove a century of steadily rising
demand -- means consumption of oil will peak in the next two decades.
Aramco could be listed before the end of the year, in which case the world’s most valuable company
will no longer be traded in the U.S. but on the Saudi bourse. The exchange lifted restrictions on
foreign investors four years ago.
In a bid to make the stock more attractive, Aramco plans to pay $75 billion in dividends next year.
That would give investors a yield of 3.75% if the company achieves its ambition of a $2 trillion
valuation. That’s a decent payout in a low-interest-rate world, but it’s a lower dividend yield than at
other big oil firms.
Investors who buy into the IPO have been guaranteed that the dividend won’t fall until after 2024,
regardless of what happens to oil prices. Instead, Aramco will cut back on payouts to the
government if it has to reduce the total dividend to less than $75 billion.

Acwa Power inks 200MW Egypt solar plant agreement
The national+ NewBase
Acwa Power is s bidding on $5bn worth of projects for the remainder of the year, according to chief
executive Paddy Padmanathan. Leslie Pableo for The National
Riyadh-based Acwa Power signed a power purchase agreement with the Egyptian government to
operate a 200-megawatt solar photovoltaic plant in the country. Under the terms of the agreement,
the Saudi company will develop, finance, construct and operate the Kom Ombo plant.
Construction is set for completion during the first quarter of 2021, the company said. Egypt plans to
raise capacity from renewable sources to 20 per cent by 2020
"We commenced our operations in Egypt through the launch of the Benban PV IPP [independent
power producer] project, and we are currently in discussions with the Egyptian Ministry of Electricity
to finalise agreements for the 2250 MW Dairut CCGT [combined cycle gas turbines], with an
investment value of $2.3 billion (Dh8.44bn)," said Acwa Power chief investment officer Rajit Nanda.
"Today, through the deployment of the Kom Ombo Plant, we are further branching our
commendable trail in Egypt," he added.
Egypt, the Arab world's most populous nation, is faced with rapidly growing demand for both
industrial and residential power use. The country meets more than half of its power needs from gas
at 53 per cent, with oil accounting for 43 per cent of its requirements. The government is prioritising
adding renewables to the mix, with plans to raise capacity from clean sources to 20 per cent by
2020.
The new solar plant is expected to meet the needs of 130,000 households, Acwa Power added.
Meanwhile, the company is close to reaching an $11.5bn gasification project being developed with
Saudi Aramco and Air Products by the close of the year, chief executive Paddy
Padmanathan told The National in an interview earlier this month.
Acwa Power will have a 25 per cent stake in the scheme, which is expected to produce steam,
hydrogen, oxygen and a small amount of desalinated water, all for local consumption and use at
the nearby Jazan refinery. Air Products will hold a 55 per cent stake, with the remaining interest
held by state oil producer Saudi Aramco.
Earlier this week, Acwa Power won bids to develop two solar schemes in Ethiopia with a total
capacity of 250MW, marking its entry in the African country.

Iraq-Kurdistan: Genel Energy trading and operations udpdate
Source: Genel Energy
Genel Energy has issueds a trading and operations update in respect of the third quarter and first
nine months of 2019. The information contained herein has not been audited and may be subject
to further review.
Bill Higgs, Chief Executive of Genel, said:
'We continue to deliver on our strategy. Robust production is generating material free cash flow,
which we are recycling into low-risk and quick returning projects, with good progress made on
delivering key milestones on schedule for both Sarta and Qara Dagh.
Rapid payback from our low break-even assets gives us resilience and significant flexibility in regard
to future capital allocation. The sustainability of our cash-generation provides opportunities to deliver
material shareholder value through investing in growth and increasing returns to shareholders.'
FINANCIAL PERFORMANCE
 $287 million of cash proceeds received as of 30 September 2019, of which $120 million was
received in Q3
 Free cash flow of $121 million in the first nine months of 2019, with capital expenditure of
$110 million
 Cash of $413 million at 30 September 2019 ($281 million at 30 September 2018)
 Net cash of $115 million at 30 September 2019 (net debt of $16 million at 30 September
2018)
OPERATING PERFORMANCE
 Net production averaged 36,530 bopd in the first nine months of 2019, an increase of 12%
year-on-year, in line with guidance
 Production in Q3 averaged 34,720 bopd (33,700 bopd in Q3 2018)
 11 wells have been placed on production in 2019, with a further five wells expected to add to
production in the remainder of the year
 Production and sales by asset during Q3 2019 were as follows:

PRODUCTION ASSETS
Tawke PSC (Genel 25% working interest)
 Tawke PSC production averaged 119,760 bopd in Q3 (113,100 bopd in Q3 2018), including
a contribution of 51,940 bopd from the Peshkabir field
 Production was impacted by a workover of the P-2 well and side-track of the P-3 well at the
Peshkabir field, with the latter well expected to come onstream shortly
 The Tawke-57A deep well to appraise the Jurassic was spud in August 2019 with testing to
commence shortly. The Tawke-59 Cretaceous well spud in October 2019 and is expected to
come on production later this month, with two Jeribe wells, Tawke-61 and Tawke-62 also set
to be placed on production shortly
 Four additional Jeribe wells are planned to spud by year-end
 The operator expects to exit the year with Tawke licence production averaging 120,000 bopd
and to maintain this rate into 2020.
Taq Taq PSC (Genel 44% working interest and joint operator)
 Taq Taq field production averaged 10,870 bopd in Q3 2019 (12,200 bopd in Q3 2018)

 Following the successful completion of the TT-19 well, which is currently flowing at a rate of
c.1,500 bopd, current production from the Taq Taq field is just under 11,000 bopd
 The TT-34 well is currently drilling and is scheduled to complete later this month. The rig will
then move to drill TT-35, which is set to spud in December and is targeting production from
the northern flank of the field
PRE-PRODUCTION ASSETS
Sarta (Genel 30% working interest)
 Civil construction work at the Sarta field completed on schedule in October 2019, and work
on the construction of the 20,000 bopd central processing facility (‘CPF’) has now begun
 Commissioning of the CPF and production are on track to begin in the middle of 2020
 Phase 1A represents a low cost pilot development of the Mus-Adaiyah reservoirs, designed
to recover 2P gross reserves of 34 MMbbls
 Unrisked gross mid case resources relating to the Mus-Adaiyah reservoir only are estimated
by Genel at c.150 MMbbls, with overall unrisked gross P50 resources currently estimated by
the Company at c.500 MMbbls
Qara Dagh (Genel 40% working interest and operator)
 Genel has signed a contract with Parker Drilling for the drilling of the QD-2 well, and civil
construction works are underway in preparation for the upcoming drilling operations
 The well will test the structural crest 10 km to the north-west of the QD-1 well, which tested
sweet, light oil from Cretaceous carbonates
 The QD-2 well is on track to spud in H1 2020
 Unrisked gross mean resources at Qara Dagh are currently estimated by Genel at c.200
MMbbls
Bina Bawi (Genel 100% and operator)
 Negotiations between Genel and the Kurdistan Regional Government continue to progress
regarding commercial terms for the gas and oil development at Bina Bawi
 In parallel with these negotiations, Genel is completing the necessary readiness work
required to enable rapid progress towards gas and oil developments upon agreement of the
commercial terms
 Genel is confident of a positive outcome to these commercial discussions
OUTLOOK AND 2019 GUIDANCE
 Net production guidance in 2019 maintained at close to Q4 2018 levels of 36,900 bopd
 2019 capital expenditure guidance maintained towards the top end of the $150-170 million
range
 Interim dividend of 5¢ per share to be paid on 8 January 2020 to shareholders on the register
as of 13 December 2019
o Given the ongoing strength of cash generation and the positive outlook for the Company, Genel
reaffirms its commitment to growing the dividend
 The Company continues to actively pursue growth and is assessing opportunities to make
value-accretive additions to the portfolio

U.S Keystone Pipeline leaks of oil in second big spill in 2 years
The Washington Post + NewBase
The Keystone Pipeline oil leak affected land about three miles from Edinburg, N.D. ,Approximately
383,000 gallons of crude oil have spilled into a North Dakota wetland this week in the latest leak
from the Keystone Pipeline, further fueling long-standing opposition to plans for the pipeline
network’s extension.
With about half an Olympic swimming pool’s worth of oil covering roughly half an acre, the leak is
among the largest in the state, said Karl Rockeman, who directs the North Dakota Department of
Environmental Quality’s division of water quality. But the spill does not appear to pose an immediate
threat to public health, he added, as people do not live nearby and the wetland is not a source of
drinking water.
For environmental groups, though, the leak was further evidence that Canada-based pipeline owner
TC Energy should not be allowed to build the controversial Keystone XL addition, which would
stretch more than 1,000 miles from Alberta into the United States. The Trump administration
approved the plan in 2017 after years of protests, but the project was blocked by a federal judge
who called for further study on environmental impacts.
“With each one of these major spills that happens on the Keystone pipeline system, it becomes
clearer and clearer that this is not safe,” said Doug Hayes, an attorney leading the Sierra Club’s
work on Keystone XL. Critics worry about a similar mishap contaminating one of the hundreds of
waterways along Keystone XL’s expected path, he said.
TC Energy spokeswoman Sara Rabern said the safety of the public and the environment is the
company’s “top priority.”
“We will take the learnings from this incident, like we do with anytime we have any incident, and use
them to improve our pipeline integrity,” she wrote in an email, adding that TC Energy spends
“millions of dollars each year to ensure we operate [a] safe pipeline system.”

This week’s leak was Keystone’s second big one in two years. Many smaller spills have plagued
the pipeline since it opened in 2010 to carry oil from Alberta to Texas. That’s cause for concern,
some experts say.
“It’s a valid ques-tion, two cracks on a fair-ly new pipe-line — geez, what’s going on?” Rich-ard
Kuprewicz, the president of pipeline safety consulting company Accufacts, told the Star Tribune in
Minneapolis.
Asked if regulators are concerned by the multiple incidents, Rockeman said authorities need to learn
more about the latest leak’s cause, which is still under investigation, according to TC Energy and
state authorities. The federal Pipeline and Hazardous Materials Safety Administration is leading the
inquiry and is already on site, Rockeman said.
The leak occurred Tuesday, about three miles from the town of Edinburg, not far from the Canadian
border, the state Department of Environmental Quality said. It’s one of the 10 largest onshore oil
spills in the country since 2010, when an Enbridge pipeline released more than 800,000 gallons of
oil in Michigan, according to the Star Tribune.
No injuries or impacts on animals have been reported, TC Energy said in a statement, adding that
the oil is now contained. Crews are still focused on recovering the oil and will shift later to fixing
the pipeline, according to the company. Large stretches of Keystone have been shut down.
Exactly how much was released will not be clear until it’s all recovered, TC Energy said. The total
for the Keystone pipeline’s 2017 gush onto South Dakota agricultural land ended up being revised
significantly, from about 210,000 gallons to more than 400,000.
The 2017 spill was probably rooted in a crack caused by a vehicle during Keystone’s construction,
the National Transportation Safety Board found. The crack likely grew over time, the board
concluded.
Revelations of another rupture came as the State Department accepts comments on an
environmental review of the hotly debated Keystone XL plan. The department’s public meeting
about the review, held Tuesday in Montana, broke into shouting at times, the Associated Press
reported.
“Yes, there’s a risk of an oil spill,” said one man whose farm is in the pipeline’s path and whom TC
Energy is paying for property access, according to the Associated Press. “We have to be willing to
take a risk. It’s a very minuscule chance.”
Montana state Sen. Frank Smith (D) countered that the oil line would eventually break and could
jeopardize drinking water. “Obama did a really thorough investigation and decided it wouldn’t work,”
he said, according to the Associated Press.
Environmental advocates have made similar arguments in the wake of the spill near Edinburg.
“We’ve always said it’s not a question of whether a pipeline will spill, but when, and once again TC
Energy has made our case for us,” Sierra Club associate director Catherine Collentine said in a
statement.

NewBase November 04 – 2019 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil Holds Gain After U.S., Chinese Data Improves Demand Outlook
Bloomberg + NewBase
Oil held its biggest gain in almost seven weeks after improved U.S. and Chinese economic data
aided the demand outlook and Saudi Aramco said it would go ahead with its long-awaited initial
public offering.
Futures edged lower after surging 3.7% on Friday, the most since the September attacks on Saudi
Arabia’s oil facilities. Chinese manufacturing orders rose at the quickest pace in more than six
years, data showed Friday, and U.S. hiring was unexpectedly resilient. Aramco, the world’s biggest
oil company, announced its intention to list on Sunday, more than three years after Crown Prince
Mohammed bin Salman first raised the idea.
The oil market is taking heart from the signs of strength in the world’s two biggest economies as the
nations move closer to a partial trade deal, despite skepticism over whether a more comprehensive
agreement can be reached. Hedge funds unwound bets against American crude for the first time in
six weeks, but short wagers remain almost triple what they were in mid-September, according to
data released Friday.
Oil price special
coverage

West Texas Intermediate for December delivery dropped 22 cents, or 0.4%, to $55.98 a barrel on
the New York Mercantile Exchange as of 9:56 a.m. in Singapore. The contract jumped $2.02 to
close at $56.20 on Friday.
Brent for January settlement fell 29 cents, or 0.5%, to $61.40 a barrel on the London-based ICE
Futures Europe Exchange. The global benchmark crude traded at a $5.36 premium to WTI for the
same month.
Russia’s Oil Output Still Exceeds OPEC+ Cap Even as Gap Narrows
By
Russia’s average daily oil production remained above its OPEC+ target in October, though the
compliance gap is the narrowest since the Druzhba crude-contamination crisis earlier this year.
The country pumped 47.49 million tons of crude and condensate last month, according to
preliminary data from the Energy Ministry’s CDU-TEK unit. That equals a daily average of 11.229
million barrels, based on the standard 7.33 barrels-per-ton conversion ratio, Bloomberg calculations
show. That means Russia produced an average 39,000 barrels a day more than its OPEC+ cap.
In mid-October, Energy Minister Alexander Novak said that his country would comply with the
OPEC+ deal in October after failing to reach the pledged target the previous month.
Not There Yet
Russia is narrowing the gap between its actual oil output and the target

Source: Bloomberg calculations based on the Energy Ministry's CDU-TEK data
Under the agreement between the Organization of Petroleum Exporting Countries and its allies,
Russia -- one of the architects of the deal -- committed to cut its daily output by 228,000 barrels
from a baseline level of 11.418 million barrels.
Russia has failed to meet its OPEC+ obligations for seven months this year -- with May, June and
July the exceptions, when the country over-complied and cut production more deeply
after contaminated crude was discovered in the Druzhba pipeline, forcing parts of the link to shut
down.

NewBase Special Coverage
News Agencies News Release Nov. 04-2019
Saudi Arabia kick-starts IPO of world's largest oil company
Reuters Saeed Azhar, Davide Barbuscia, Rania El Gamal, Marwa Rashad
Saudi Arabia’s state oil company kick-started its initial public offering (IPO) on Sunday, announcing
its intention to list on the domestic bourse as the kingdom seeks to diversify and create the world’s
most valuable listed company.
Aramco did not give a time frame or say
how much of the company it would sell,
but sources have told Reuters the oil
company could offer 1%-2% of its shares
on the local bourse, raising as much as
$20 billion-$40 billion.
Aramco said the IPO would be split into
two tranches: one each for institutional
and individual investors. The percentage
of shares to be sold and the purchase
price would be determined after the book-
building period, it added in a statement.
Confirmation of the share sale in Saudi
Arabian Oil Co, or Aramco, as the oil giant is usually known, comes about seven weeks after
crippling attacks on its oil facilities, underlining Saudi Arabia’s determination to push on with the
listing regardless.
Aramco said it does not expect the Sept. 14 attack on its oil
plants will have a material impact on its business, operations
and financial condition.
The attacks targeted the Abqaiq and Khurais plants at the
heart of Saudi Arabia’s oil industry, causing fires and damage
and temporarily shutting down 5.7 million barrels per day
(bpd) of production - more than 5% of global oil supply.
The company did not specific any additional security
measures.
The IPO of the world’s most profitable company is designed
to turbocharge Crown Prince Mohammed bin Salman’s
economic reform agenda by raising billions to diversify the
kingdom, whose dependency on oil was highlighted by the
production impact of the September attacks.
“It is a colossal public offering that could potentially generate
more than 10 years’ worth of proceeds raised through IPOs in
the country,” said Salah Shamma, head of investment, MENA,
Franklin Templeton Emerging Markets Equity.

He said some local investors could be selling other shares in order to shift their investments to
Aramco, but this could well be a case of “short-term pain for long-term gain.”
LONG-AWAITED IPO
Aramco plans to release the IPO prospectus on Nov. 9, Chief Executive Amin Nasser told a news
conference in Dhahran, Saudi Arabia.
Saudi Aramco chairman Yasir al-Rumayyan told the news conference that the valuation for the
company should be determined after the
roadshow.
At a valuation of $1.5 trillion, Aramco would still
be worth at least 50% more than the world’s most
valuable companies, Microsoft and Apple, which
each have a market capitalisation of about $1
trillion.
But a 1% sale would raise “only” around $15
billion for Saudi coffers, less than the $25 billion
generated by Chinese e-commerce giant Alibaba
in its record-breaking IPO in 2014.
It would rank Aramco as the 11th biggest IPO of all time, Refinitiv data show. (For a graphic on the
top 10 largest global IPOs, see tmsnrt.rs/33gWypM)
A sale of 2% of Aramco shares at a $1.5 trillion valuation would make it the biggest IPO of all time,
beating Alibaba’s.
The prospect of the world’s largest oil company selling a piece of itself has had Wall Street on
tenterhooks since Prince Mohammed flagged it three years ago.
BONUS SHARES FOR SAUDI INVESTORS
Aramco said in Sunday’s statement that it posted a net income of $68 billion during the nine-month
period ending on September 30. Revenues and other income related to sales for the same period
amounted to $244 billion, it added.

To help get the deal done, Saudi Arabia is relying on easy credit for retail investors and hefty
contributions from rich locals.
Aramco said the Saudi market regulator, which approved its application to list on Sunday, had
issued an exemption for non-resident institutional foreign investors to subscribe.
Saudi investors would be eligible to receive bonus shares -a maximum of 100 bonus shares for
every 10 allotted shares.
Saudi nationals would be eligible to receive bonus shares.
It said the government will forgo its right to receive a portion of cash dividends on Aramco’s shares,
giving priority on such distribution to new shareholders.
Aramco is cutting the royalties it pays to the Saudi government - to give comfort to investors.
Aramco said that, effective Jan. 1 2020, it will adopt a progressive royalty scheme, with a marginal
rate set at 15% up to $70 per barrel, 45% between $70 and $100, and 80% if the price rises higher.
The listing announcement had been expected on Oct. 20 but was delayed after advisers said they
needed more time to lock in cornerstone investors, three sources told Reuters.
VALUATION CHALLENGE
Although Prince Mohammed put a $2 trillion valuation on the company in early 2016, bankers and
company insiders say Aramco’s value is closer to $1.5 trillion.
A growing movement to fight climate change and embrace new “green” technologies have put some
fund managers, particularly in Europe and the United States, off the oil and gas sector.

Initial hopes for a blockbuster international listing of about 5% were dashed when the share sale
was halted last year amid debate over where to list Aramco overseas.
Aramco said the IPO timetable was delayed because it began a process to acquire a 70% stake in
petrochemicals maker Saudi Basic Industries Corp.
IPO preparations were revived over the summer after Aramco attracted huge interest in its first
international bond sale, seen as a pre-IPO relationship-building exercise with investors.
The bond sale forced the secretive company to reveal its finances for the first time, including net
income of $111 billion, over a third bigger than the combined net income of the five super majors
Exxon Mobil, Royal Dutch/Shell, BP, Chevron and Total.
Oil majors have been raising payouts to shareholders to counter rising pressure from climate
activism.
Aramco said on Sunday it intended to declare aggregate ordinary cash dividends of at least $75
billion in 2020.
At a valuation of $1.5 trillion, this would mean a dividend yield of 5%, below that offered by rival
Royal Dutch Shell. Shell’s dividend yield is over 6%, according to Refinitiv data.
More than two dozen banks are handling the blockbuster IPO.
Among them, Citigroup, Credit Suisse, Goldman Sachs, HSBC, JPMorgan, Bank of America Merrill
Lynch, Morgan Stanley, NCB Capital and Samba Capital & Investment Management Co are joint
financial advisors, joint global coordinators and joint bookrunners.
Al Rajhi Capital, EFG Hermes, GIB Capital, Riyad Capital and Saudi Fransi Capital have been
appointed by the company as domestic joint bookrunners.
Lazard Frères SAS, M. Klein and Co and Moelis have been acting as special advisors to the
company, the Aramco statement said.
Timeline: Saudi Aramco's winding road to an IPO
- Saudi Arabia’s state oil company finally kick-started its initial public offering (IPO) on Sunday,
announcing its intention to list nearly four years after Crown Prince Mohammed bin Salman first
floated the idea.
Here are the key events on Aramco’s path to an eventual stock market debut.
Nov 3, 2019 - Saudi Arabia’s Capital Market Authority said its board had approved Saudi Aramco’s
application for the registration and offering of a proportion of its shares.
Oct 18, 2019 - Saudi Aramco delays the planned launch of its initial public offering in hopes that
pending third-quarter results will bolster investor confidence in the world’s largest oil firm.
Oct 8, 2019 - The Saudi central bank vets local lenders’ exposure to Saudi Aramco ahead of an
initial public offering of the state-oil giant that will likely see large numbers of Saudi investors seek
loans to buy its stock, three sources familiar with the matter said.
Oct 7, 2019 - Rating agency Fitch downgrades Saudi Aramco by one notch after attacks last month
on two production facilities, putting the rating of the state-owned oil giant at par with the one of Saudi
Arabia.

Sept 30, 2019 - Fitch downgrades Saudi Arabia’s credit rating to A from A+, citing rising geopolitical
and military tensions in the Gulf following an attack on its oil facilities and a deterioration of the
kingdom’s fiscal position.
Sept 25, 2019 - Saudi Arabia restores its oil production capacity to 11.3 million barrels per day,
three sources briefed on Saudi Aramco’s operations tell Reuters, maintaining a faster than expected
recovery after the Sept. 14 attacks.
Sept 14, 2019 - Two Saudi Aramco plants attacked in a drone strike, triggering the biggest jump in
oil prices in almost 30 years. The attacks forced Saudi Arabia to shut down more than half of its
crude output, leaving question marks over the timing and valuation of its IPO.
Sept 11, 2019 - Saudi Aramco hires nine banks as joint global coordinators to lead its planned initial
public offering, sources say.
Sept 9, 2019 - Saudi Arabia plans to list 1% of Saudi Aramco on the Riyadh stock exchange before
the end of 2019 and another 1% in 2020, sources tell Reuters.
Sept 2, 2019 - Saudi Arabia names head of the country’s sovereign wealth fund, Yasir al-Rumayyan,
as Aramco chairman, replacing Energy Minister Khalid al-Falih.
Aug 30, 2019 - Saudi Aramco board sees too many risks for New York IPO, sources tell Reuters.
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Aug 19, 2019 - Saudi Aramco asks banks to pitch for roles in IPO, sources say.
July 2, 2019 - Banks including JPMorgan, Morgan Stanley and HSBC scramble to re-pitch for
Aramco IPO roles, sources say, with Saudi Arabia’s energy minister confirming plans for the listing
to proceed in 2020 or 2021.
April 9, 2019 - Aramco sells $12 billion bonds out of record $100 billion demand.
April 1, 2019 - Saudi Aramco made core earnings of $224 billion in 2018, figures show, after Aramco
had to reveal them in order to start issuing international bonds.
March 27, 2019 - Saudi Aramco says it would buy SABIC in $69 billion chemicals mega deal.
March 7, 2019 - Saudi Energy Minister says Aramco IPO to happen within two years, Okaz
newspaper reports.
Aug 22, 2018 - Saudi Arabia scraps plans for the domestic and international listing of Aramco and
advisers working on the listing have been disbanded as the kingdom shifts its attention to buying a
stake in SABIC, sources say.
July 20, 2018 - Saudi Aramco’s plans to buy a stake in petrochemicals maker Saudi Basic Industries
Corp (SABIC) would affect IPO timing, CEO says in an interview.
March 13, 2018 - Saudi Aramco international listing looks increasingly difficult, sources close to the
process say here
Jan 11, 2018 - Hong Kong, London, New York shortlisted for Aramco IPO, two sources with
knowledge of the discussions say here
Jan 10, 2018 - Saudi Aramco is working to raise cheap loans from banks seeking to strengthen their
ties with the oil giant before its IPO, banking sources say. here

Oct 26, 2017 - Saudi Aramco IPO is on track for 2018 and it could be valued at more than $2 trillion,
Crown Prince Mohammed bin Salman tells here Reuters in an interview.
Sept 25, 2017 - Saudi finance minister told bond investors Aramco IPO would go ahead in 2018,
sources tell here Reuters.
Aug 11, 2017 - Saudi Arabia favors New York for Aramco listing despite risks for the main foreign
listing, people familiar with the matter tell here Reuters.
Aug 3, 2017 - Goldman Sachs bought into Aramco $10 billion loan as it seeks IPO role, sources
familiar with the matter tell here Reuters.
May 3, 2017 - London tries to lure Saudi Aramco with new listing structure, sources familiar with the
discussions say. here
May 2, 2017 - Aramco sale won't be far off 5%, will happen in 2018, Deputy Crown Prince
Mohammed bin Salman says. here
April 24, 2017 - HSBC has been formally mandated as an adviser on IPO of Saudi Aramco, HSBC's
chief executive says. here
April 19, 2017 - China gathers state-led consortium that will act as a cornerstone investor in the
Aramco IPO, people with knowledge of the discussions tell here Reuters.
March 30, 2017 - Saudi Aramco formally appointed JPM, Morgan Stanley and HSBC as international
financial advisers for its IPO, sources familiar with the matter tell here Reuters.
March 23, 2017 - Saudi Aramco picks Samba Capital as local IPO adviser, sources
tell here Reuters.
March 6, 2017 - Saudi Aramco will list locally and abroad in second half of 2018, Chief Executive
Amin Nasser says. here
Jan 26, 2017 - Saudi Aramco selects U.S. firms to audit its reserves for IPO, industry sources
says here
May 27, 2016 - Saudi Aramco was boosting market share as it prepares for listing, Chief Executive
Amin Nasser says here in an interview.
May 10, 2016 - Saudi Aramco was finalizing proposals for the IPO of less than 5% of its value and
will present them to its Supreme Council soon, its chief executive says. here
April 25, 2016 - Saudi Arabia expects Saudi Aramco to be valued at more than $2 trillion and plans
to sell less than 5% of it through an IPO, the Deputy Crown Prince Mohammed bin Salman
says. here
Jan 24, 2016 - Saudi Aramco chairman says IPO could be open to international markets, in
interview here to Arabiya TV.
Jan 8, 2016 - Saudi Aramco issued statement here saying it was considering options including the
stock market listing "of an appropriate percentage of the company's shares and/or the listing of a

bundle of its downstream subsidiaries". Jan 6, 2016 - Saudi Arabia's Deputy Crown Prince
Mohammed bin Salman mentioned his interest in selling off parts of Aramco to private investors in
an interview here with the Economist.
Aramco is keen to tout its financial might. It produces 10 million barrels of oil per day, generated net
income of $111 billion last year, and earned a 41% return on average capital employed. These
measures put it miles ahead of the five major oil companies – Royal Dutch Shell, Exxon Mobil,
Chevron, BP and Total – it regards as stock market peers.
Those listed companies trade on an average dividend yield of 5.6%, based on Refinitiv estimates
of their expected payouts for next year. Aramco is promising to distribute at least $75 billion to
shareholders in 2020. At the hoped-for $2 trillion valuation, its shares would yield just 3.8%.
In reality, international investors will probably demand a substantial yield premium to buy into a
company which saw half its production knocked out by rocket attacks in September. With a dominant
state shareholder and a small free float, Aramco looks more like Rosneft, whose shares yield a hefty
8.3%.
Aramco is not subject to the international sanctions which hang over its Russian peer. But even a
more modest yield of, say, 6% would imply a market capitalisation of just $1.2 trillion. Dividends are
not the only valuation benchmark. A Breakingviews model which values Aramco on the basis of
discounted cash flows, and incorporates new lower royalty payments to the Saudi government, spits
out a price of close to $1.6 trillion. But with a potential demand-led oil glut next year, active
institutional investors will remain wary.
Accepting a valuation well below $2 trillion might look like a defeat for MbS. But setting the price too
high would force Aramco to lean on rich Saudis and retail investors to get its IPO underway. The
credibility of the country’s attempts to diversify away from oil may depend on it accepting a lower
price.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
The Editor :”Khaled Al Awadi” Your partner in Energy Services
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Khaled Malallah Al Awadi,
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www.linkedin.com/in/khaled-al-awadi-38b995b

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Khaled Al Awadi is a UAE National with a total of 28 years of experience in
the Oil & Gas sector. Currently working as Technical Affairs Specialist for
Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy
consultation for the GCC area via Hawk Energy Service as a UAE operations
base , Most of the experience were spent as the Gas Operations Manager in
Emarat , responsible for Emarat Gas Pipeline Network Facility & gas
compressor stations . Through the years, he has developed great experiences
in the designing & constructing of gas pipelines, gas metering & regulating
stations and in the engineering of supply routes. Many years were spent
drafting, & compiling gas transportation, operation & maintenance agreements along with many
MOUs for the local authorities. He has become a reference for many of the Oil & Gas Conferences
held in the UAE and Energy program broadcasted internationally, via GCC leading satellite
Channels.
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
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