OpeOluwani Akintayo
30 April 2018, Sweetcrude, Lagos – An audit of Saudi Arabia’s crude oil reserve has found that the world’s largest producer has 270 billion barrels of crude oil in store, slightly higher than the 260.8 billion barrels the company reported in its 2016 annual review.
A reserve total significantly above or below the 261 billion figure would likely affect Aramcos potential market value in the listing and is being closely watched by investors.
The audit is an essential part of the preparatory work for its planned 5 percent initial public offering, IPO later this year or early 2019, and Dallas-based DeGolyer and MacNaughton, and Gaffney, Cline and Associates, part of Baker Hughes, are involved in the auditing, sources told Reuters.
According to sources, the independent external audit has found the proven oil reserves to be at least 270 billion barrels.
Aramco’s official reserves figures were “more than confirmed,” said the source.
“This is good for the company’s valuation,” another source said.
For nearly 30 years – despite rising production, large swings in oil prices and improved technology – Riyadh has annually reported the same number for reserves at around 261 billion barrels, according to BP’s statistical review.
The sale of a stake in Aramco is a centerpiece of Vision 2030, an ambitious reform plan to diversify the Saudi economy beyond oil which is championed by Saudi Arabia’s Crown Prince Mohammed Bin Salman.
No decision about the location of the international share listing has been announced, fueling market speculation the IPO could be delayed or shelved. But Prince Mohammad, in March, said the IPO could still take place at the end of 2018 or in early 2019, depending on financial market conditions.
The New York Stock Exchange is bidding for the IPO, alongside London and Hong Kong, but Saudi Energy Minister Khalid al-Falih said there was a risk of legal action if Aramco was listed in the United States.
The Aramco board will meet next in early May in Houston where they will review the latest IPO developments, sources said.
In a statement on Sunday, Aramco said it has appointed new members to its board including a female executive, a milestone for Saudi Arabia and the oil industry where there are few women executives.
