Aramco Overseas Company Enters Agreement to Buy Stake

Saudi Aramco Overseas Company (AOC), a subsidiary of Saudi Aramco, has entered into an arrangement to buy a stake in a Rotterdam terminal from commodities trader Gunvor, the company said on Thursday.
The deal is targeted for completion by the end of October. Terms were not disclosed.

AOC will buy Gunvor’s stake in the Maasvlakte Olie Terminal and the sale is targeted for completion by the end of October, it said in a statement. The terminal takes in roughly one-third of the total crude oil supply into Rotterdam annually, according to the terminal’s website, with around 240 supertankers delivering crude every year to its 39 storage tanks, said the Financial Times.

AOT’s investment in the terminal will add to its investment in other facilities in the same area and allow it to expand offerings in the North West Europe refining hub, it said. Gunvor will use the proceeds of the terminal sale to invest in the Rotterdam refinery, the company said in a statement.

Saudi Arabia's finance minister said the kingdom is still considering whether to pursue an international listing for part of its behemothic state oil company.

Saudi Aramco will list at least part of its business on Saudi Arabia's stock exchange, the Tadawul, in 2018. It is widely expected to list in another segment on an exchange in an international financial centre — most likely New York or London.

However, Saudi finance minister Mohammed Al-Jadaan, told the Financial Times that an international listing is just one "option." Saudi Aramco could look for private investment overseas instead of an international IPO, Al-Jadaan said.

"We agreed and we have said publicly that Tadawul is for certain," he told the FT. "[But] are we going to go with an international market? If we go, where are we going? And if we go, are we going public or we are going private."

"There is a lot of work now for the decision-makers," Al-Jadaan continued. "We need to make sure we do not leave any stone unturned. This is a very, very significant transaction."

Aramco's IPO is widely expected to see the company officially become the most valuable business on earth, with a market capitalisation of as much as $2 trillion. The price tag has caused cities like New York and London to scramble for a piece of the listing.

The UK has proposed a series of new rules around stock market listings thought to be almost exclusively created to attract Aramco to London. The UK regulator has publically denied this is the case. The new proposals would create a new category "within its premium listing regime" for sovereign-owned companies looking to enter the market.

Jadaan told the FT: "You do Tadawul and then you go around the world to certain countries and say investors 'here is the story come and invest'.

"These options are being looked at very carefully from all angles to make sure we make the right decision."

Britain's Prime Minister Theresa May was accompanied by Xavier Rolet, CEO of the London Stock Exchange, on a recent visit to Saudi Arabia, in an attempt to lobby for London to get a slice of the IPO. Hong Kong and Tokyo are also vying for the listing.