The Riyadh-based newspaper al-Eqtisadiah retracted a story saying Saudi Arabia is planning to sell almost half of Saudi Arabian Oil Co., the world’s largest oil company known as Aramco.
The stake that the government plans to sell and the time frame of the sale are different than what was mentioned in the story published on Saturday, al-Eqtisadiah said in a statement published Sunday. The story, which cited an unidentified government official, contained a number of other errors, the newspaper said.
“Al-Eqtisadiah apologizes to its readers, and wishes that all media outlets that cited the story to publish this apology and clarification,” the newspaper said. It will start an investigation into how the mistaken information was published, the newspaper said.
The newspaper had reported that the government would sell close to half of the state-owned enterprise during the next 10 years. Deputy Crown Prince Mohammed bin Salman said in April that an initial public offering is planned for 2018, or even a year earlier, with the country planning to sell less than 5 percent.
Aramco’s privatization is part of the Saudi Vision 2030, not the National Transformation Program 2020, the newspaper said.
Saudis are looking at their sources of revenue beyond 10 years and they are asking what should we do more to diversify our non-oil income.”
The Saudi government relies heavily on oil sales for revenue, and its finances have taken a blow since prices started tumbling in 2014. Total projected revenue this year, at 528 billion riyals ($141 billion), is less than half what it collected in 2013, when oil was trading above $100 and made up 90 percent of revenue. Brent crude, the global benchmark, closed Friday at $55.16 a barrel.
Taking a company as large as Aramco to the market may pose challenges for Saudi Arabia. Selling any part of Saudi Aramco to the public will require “full audits and a large amount of transparency,” Paul Sullivan, a professor of security studies at Georgetown University in Washington, said by e-mail on Saturday.
“They would need to audit for the valuation of tangible and intangible assets, such a human capital, pipelines, refineries, information systems, management quality, and good will. Getting such data for an IPO audit will be a massive undertaking.”