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Saudi Arabia should Delay ARAMCO Sale

April 24, 2017

@asadcmka
by Asad Rizvi

I fully support Saudi Vision 2030, as basic idea is “Economic Prosperity”. But I have reservations about its public announcement to sell 49 pct stake in ARAMCO in next 10 years.

Despite Shale factor, Aramco selling is the other major cause of lower crude prices to buy its shares at a cheaper price and hence, oil prices will remain under pressure until 5 pct IPO is sold.

In my humble view Saudi government should reconsider its proposal to offload 5% of its stake via IPO in 2018, which is estimated to generate USD 100 Billion. On an average if Oil prices is higher by $ 20 (annually) it will generate nearly USD 75 Billion.

Saudi Arabia should announce delay in selling of ARAMCO stake until further notice or postpone selling until next 5-years and see the magic or else prices will once again dip down to average around USD 40.

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