Aramco has entered the final stage of preparations for its much-anticipated initial public offering, by officially announcing it would list shares on the local Tadawul exchange.

“Today is the right opportunity for new investors to reap the benefits of Aramco’s ability to achieve value, and boost it on the long-term,” the chairman of Aramco, Yasir al-Rumayyan told a news conference as quoted by Reuters.

While the news is certainly welcome after months of uncertainty, the company has been shy on details. In the announcement, there was no word on the actual date of the float, the number of shares that will be offered on Tadawul, or the price.

In the meantime, reports have emerged that the valuation Crown Prince Mohammed is after for Aramco – $2 trillion – might prove impossible to achieve. Bloomberg reported that the banks arranging the deal has sent research to prospective investors saying Aramco could be worth even less than $1.5 trillion.

What’s more, according to the report and to investors who had seen the research, the banks themselves were having trouble valuating the company. BofA seems to be particularly cautious, putting the valuation of Aramco at between $1.22-$2.27 trillion. This, Bloomberg’s Archana Narayanan, Javier Blas and Matthew Martin aptly said, was “more than enough to fit the combined market capitalizations of Exxon Mobil Corp., Royal Dutch Shell Plc and Chevron Corp, the world’s three largest publicly listed energy companies.”

Some, however, note that even Riyadh has accepted the possibility that it will not get its $2-trillion valuation. According to Bloomberg, the average range banks are likely to target would be between $1.6 and $1.8 trillion, given the overall interest in oil stocks – which has been on the decline – and the recent attacks on oil infrastructure that has probably worried potential investors about the future security of Saudi oil supply.

• By Irina Slav for Oilprice.com, November 4, 2019