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Market Share of Saudi Aramco being Boosted Listing Preparations Continue

Market Share of Saudi Aramco being Boosted Listing Preparations Continue
As Saudi oil giant Aramco acts as a "bridge" to a future when the nation relies less on energy exports, it is gaining market share and pushing for greater efficiency, said the chief executive of the company Amin Nasser in an interview.
The partial privatization via a stock market listing of the company is at the heart of Riyadh's "Vision 2030", a long-term economic plan headed by Deputy Crown Prince Mohammed bin Salman and Nasser said that the state-owned group was pressing on with preparations for the same.
OPEC's decision in November 2014 to refuse to cut supply to boost prices was driven by Riyadh. Against higher-cost rivals such as U.S. shale producers - as well as fellow OPEC member Iran which has ramped up its exports since the lifting of international sanctions, OPEC instead opted to raise output and fight for market share.
"We are preserving our market share which continues to increase year-on-year. This year, as last year, it is increasing. Our market share is picking up," he said in the interview that was conducted on Wednesday.
Up from around 6.8 million bpd in 2014, as shown in its 2015 annual review released late on Thursday, Aramco's crude oil exports averaged 7.1 million bpd. With an increase from 62.3 percent a year earlier, Asia accounted for 65 percent of its total oil exports.
At a time when Iranian exports have risen close to pre-sanctions level, an OPEC meeting on June 2 will be the first for new Saudi energy minister Khalid al-Falih - Saudi Aramco's chairman.
Riyadh's current tactics seem to be working. From a 12-year low of $27 in January, oil LCOc1 has recovered to $50 a barrel despite the Iranian increase.
As production from high-cost producers, such as shale oil and deep water offshore fields, falls and as global demand picks up, Nasser said he expects prices to "trend upward by the end of the year".
While Vision 2030 aims to address sharp fiscal deficits by boosting the private sector, ending government waste and diversifying the economy, he views that energy would continue to play a major role. The planned initial public offering (IPO) of Aramco shares is central to this.
"Listing Saudi Aramco is in the heart of Vision 2030. We are seriously working on the IPO. Of course, the oil and gas sector will be the bridge to the long-term and we need to maximize our revenue by introducing more efficiency in the sector," Nasser said.
"Vision 2030 isn't saying no to oil by 2020. What we need is to diversify our economy and we should have a more sustainable economy because we shouldn't be totally dependent on one commodity," he added.
Nasser said that a single domestic stock exchange listing and a dual listing with a foreign market is among the plans for floating for less than 5 percent of the value of Aramco and the company is working out the options.
The plans could see part of Aramco publicly listed by 2017-18 as the company is finalizing its proposals and will present them to its Supreme Council soon. However, the timeframe was not set yet, Nasser said.

Christopher J. Mitchell

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