RIYADH: The London Stock Exchange (LSE) is wooing oil giant Saudi Aramco to join its ranks with a new structure being developed to aid the proposal, it has been claimed. The news comes as the price of Brent crude dropped to below $50 a barrel after Organization of the Petroleum Exporting Countries (OPEC) and several non-OPEC countries agreed to cut production to aid pricing. According to reports Aramco is expected to list on the Riyadh exchange, the Tadawul, and at least one major international stock market. London hopes it can step up to provide a home for the process but will have to make regulatory changes in line with the Financial Conduct Authority.
Aramco, which is now the 100 per cent owner of America’s biggest oil refinery, is looking to to sell just five percent of its assets in the initial public offering (IPO) scheduled for 2018. The company is worth $2trillion. Stock exchanges around the globe, including New York, Hong Kong and Toronto are all vying for the opportunity to list the firm which is headquartered in Dhahran, but has global operations that span exploration, production, refining, chemicals, distribution and marketing. LSE chief executive Xavier Rolet traveled with British Prime Minister Theresa May last month to Saudi Arabia, with the pair meeting the kingdom’s sovereign wealth fund. Mrs May has said she is open to all manner of trade deals when the UK leaves the European Union (EU). The LSE and government have been putting pressure on the FCA to help them come up with a workable structure of this kind in order to clinch the deal. An FCA spokesman refused to comment on specifics but said: “Our recent work considers some important questions about the primary markets, and some potential enhancements, and are part of the FCA’s wider work on UK primary markets as set out in our 2016/17 Business Plan.”
