Figures index : Saudi Aramco Privatization in Perspective: Financial Analysis and Future Implications : Science and Education Publishing

Figures index

Journal of Finance and Economics. 2020, 8(4), 161-170 doi:10.12691/jfe-8-4-2

Figure 1. (a) Saudi Aramco 2019 net income as compared to 10 selected petroleum companies. (b) Aramco 5% IPO value based on $2 trillion valuation versus the next biggest historical IPO values (source: Investopedia)

Figure 2. Aramco 2018 ownership structure. Notes: 1. PIF=Public Investment Fund of Saudi Arabia, its Sovereign Wealth Fund (SWF) with a global investment portfolio. 2. SABIC trades on Saudi Stock Exchange (Tadawul). 3. Aramco still 100% privately held by Saudi Government. (©Authors)

Figure 3. Aramco 2019 ownership structure. Notes: 1. Last year that PIF will receive SABIC dividends. After selling SABIC share to Aramco in 2020, PIF will receive a one-time payment of $69.1 billion. 2. SABIC trades on Saudi Stock Exchange (Tadawul), and agrees 29 March 2019 to deal which transfers PIF stake to Saudi Aramco by 2020. 3. Aramco starts issuing bonds in 2019 to raise cash for the 2020 acquisition of SABIC (©Authors)

Figure 4. Aramco 2020 ownership structure. Notes: 1. In 2020, PIF divests its 70% SABIC stake to Aramco for an agreed price (as stated in 29 March 2019 contract) of $69.1 Billion. 2. SABIC becomes (70%) subsidiary of Aramco after 2020 completion of PIF transaction. Aramco will control and direct SABIC via major share. SABIC contributes cash from investment activities (at 70% holding values) to Aramco’s annual cash flow statement from date of deal onward. 3. Aramco issues bonds in 2019 and 2020 as required to pay for SABIC acquisition (bond issued possibly for less than $69.1 billion, as management stated possibly also using cash from operations). (©Authors)

Figure 5. Aramco 2021 ownership structure. Notes: 1. In 2021 Aramco IPO, Saudi Government is likely to place 95% of Aramco shares in PIF, because after stock listing of Aramco, the shareholder must be an investment vehicle. 2. SABIC remains separately traded as an Aramco subsidiary. 3. Aramco IPO will initially sell 5% stake to private investors and gives Saudi Government one time payment of the IPO value (~$100 billion), which likely will be placed in PIF for diversified local and global investments. For Government selling of stake is a one time windfall in return for “losing” 5% of all future Aramco dividends to private investors. (©Authors)

Figure 6. (a) Historical and forecast Saudi average daily production [12]. (b) US EIA long-term oil price forecast [13]

Figure 7. (a) Historical and forecast revenues. (b) Historical and forecast cash flows

Figure 8. (a) Historical and forecast annual net cash flow and cumulative cash account. (b) Forecast annual dividends

Figure 10. (a) Saudi’s OPEC production share. (b) OPEC’s share of global oil production (source: IEA Oil Market Report, 2017)

Figure A1. World Energy Flow Chart by Lawrence Livermore National Laboratory. Based on the 2013 World Energy Balance by Information Energy Administration. Units in PetaJoule. [20]