Aramco, ok at the Stock Exchange debut and bin Salman shields the family

Go ahead for the Saudi Aramco Oil Stock Exchange debut. Prince Mohammed bin Salman will announce today the lineup that in the coming weeks in all probability will lead the first world oil producer to break every previous record of quotation (between 1,500 and 1,800 billion dollars) and fundraising (between 30 and 36 billions) with the public offering of 2% of the shares.TRANSPARENCY OPERATION
The apparent heir of the Saudi throne embraces a challenge of the highest level. For the first time last June, while dozens of banks and international agencies were studying the launch, the rest of the world managed to peek into the accounts of the company that the family has managed so far as a private matter, often mixing state affairs with those of the crown. Thus it was confirmed that Aramco is the most profitable company in the world (111 billion in profits out of 355.9 turnover), both inside and outside the hydrocarbon market and that its listing could beat at least 50% of that from Amazon (Alibaba is also in the focus, which in 2014 raised over 25 billion including the exercise of options).

To reach this goal of transparency, Saud's house had to literally climb mountains. In recent years, the company has canceled repayments and millionaire loans that it paid from the oil company to those of government officials, in a network of family connivance and alliances that is the basis of the Saudi political system. Women, long absent from the ranks of Aramco, were hired en masse and are now 20% of the staff. And to ensure the stability of the capitalization value, which Salman had initially indicated at 2,000 billion dollars, the prince had to court his commitment to invest at the time of the launch by some large families, starting from those he himself decimated with arrests three years ago, at the beginning of the campaign against corruption with which it consolidated its power.

POLITICAL VOLTAGES
National resources alone will not be sufficient to sustain demand on launch day. There will be a need to resort to foreign financial markets. And on this road there is a huge obstacle in the Wall Street stock exchange, where a law passed this year in Washington authorizes the US families of the victims of the 11 September 2001 massacre to seek compensation from Saudi companies in court. Finally there is the problem of the political fragility of the geographical area on which the Aramco wells are located. Last April, when the company issued bonds to prepare to finance the launch on the stock exchange, it had to offer a 4% return to raise $ 12 billion of capital from international investors, always worried by a possible war and the paralyzing effects it would have on Saudi Arabia's oil resources.

Like last month's Iranian attack that halted half of the production, and forced a four-week postponement for the title debut. Yet despite all these difficulties, MbS has moved on, knowing that the game is not only about the success of the company, but the survival of its family and the close with which it holds power in Riyadh. The drop in oil prices in recent years, the country's only economic resource, has undermined the financing of welfare that ensures popular support for the royal family. And the same ambiguity in Aramco's management is an obstacle to the financial success of the company in the international field, and therefore to the goal of generating the enormous volume of capital that Salman will have to have in order to realize the dream of emancipating his country from monoculture of oil. An emancipation that cannot take place without emancipating the royal house at the same time.


© REPRODUCTION RESERVED