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Possible Stock IPO by Saudis' Aramco Could Create Trillion-Dollar Company

FILE - Saudi Aramco's then-CEO, Khalid al-Falih, speaks to reporter at Petrotech 2014, Bahrain International Exhibition Center, Manama, May 19, 2014.

Saudi Arabia's state-owned oil company is considering selling shares to investors in a public offering that could set the company's value at $1 trillion, or possibly much more.

Saudi Aramco, as the company is known, controls the world's largest oil reserves, and currently accounts for 10 percent of the entire world's oil production — three times as much as ExxonMobil, the next largest producer.

Financial markets would set the price of Aramco shares if the company decides to proceed with an initial public offering (IPO) — one of several courses the firm is considering.

Most financial-industry analysts expect public bids would raise Aramco's share price, the company's market capitalization, high enough to ensure it becomes the world's most valuable publicly traded company, dwarfing the computer giant Apple, which is valued at slightly more than $500 billion.

Speculation about Aramco's plans has increased rapidly this week, and the Dhahran-based company said in a statement Friday that "it has been studying various options to allow broad public participation in its equity."

Aramco said an IPO is only of several options it is considering, but that it intends to accomplish "through the listing in the capital markets of an appropriate percentage of the company’s shares and/or the listing of a bundle of its downstream subsidiaries."

In an interview with the Economist magazine, Deputy Crown Prince Mohammed bin Salman said that a decision will be made in the next few months.

A public offering for even a small slice of Aramco would provide significant funds for Saudi Arabia at a time when the kingdom's economy is under pressure due to the slump in world oil prices.

A barrel of Brent crude oil, Saudi Arabia's main export, is currently trading at the lowest price in more than a decade.

Fundamentally, opening Aramco to outside investors would be the most dramatic change in the kingdom’s economic policy since it adopted nationalization in the 1970s.

Saudi Aramco has a global reach, with interests in exploration, production, refining, chemicals, distribution and marketing. The company manages more than 100 oil and gas fields in Saudi Arabia and produced 3.4 billion barrels of oil in 2013.