Oil in Global Economy Series: Saudi Aramco might get listed in Tadawul

Initial Public Offering (IPO) of Saudi Arabia’s state-owned oil giant Saudi Aramco, which reportedly hit regulatory hurdles overseas, may finally get listed exclusively on Saudi Arabia’s stock exchange, popularly known as Tadawul.

Initially, there were three exchanges that were being considered; Tokyo Stock Exchange, New York Stock Exchange, and London Stock Exchange. While Saudi Arabia’s new crown prince Mohammad bin-Salman has been preferring a New York listing due to Saudi Arabia’s close ties with the United States and as it would provide access to larger numbers of investors, Aramco officials have voiced support for London listing, which would require fewer regulatory disclosure compared to a New York listing.

However, the process reportedly came to a halt as reports surfaced that listing in New York could expose Aramco to litigations over 9/11 twin tower incidents as the U.S. government recently passed a law that allows U.S. citizen to file a lawsuit against foreign governments. Since the majority of the attackers were Saudi nationals, a litigation against Saudi government would expose Aramco to risks such as asset freeze and payments. A listing in London could be troubling too in terms of legal issues.

It is now being reported that the Saudi exchange Tadawul is working hard to convince Aramco officials of the merits of a home listing.