Saudi Aramco’s advisers have recommended London for the listing of the oil company, with US disclosure rules a concern for Saudi authorities, sources familiar with the matter told Reuters.
A final decision on the venue for what is expected to be the world’s biggest IPO and is targeted to raise $100bn will be taken by Crown Prince Mohammad bin Salman, who is overseeing Saudi Arabia’s radical economic reforms, they said.
Listing 5% of Aramco is a centrepiece of Saudi Arabia’s Vision 2030 plan to diversify beyond oil and financial considerations will not be the only factor in its decision, with Saudi authorities also taking the interests of shareholders and the company into account, the sources added.
The advisers’ views on the relative merits of London and New York for the listing are being considered by Aramco and a final proposal could be presented to the government in the fourth quarter, the sources said.
London’s chances of winning the multi-billion deal were improved by a Financial Conduct Authority plan to create a new listing category for companies controlled by sovereign states.
This was a clear sign that London is ready to welcome Aramco and needs its IPO to attract more sovereign-held entities and prove that London remains a good place to do business after the country leaves the European Union, one of the sources said.
Changes proposed by the regulator, which declined to comment, are seen as making London more attractive to state-controlled firms such as Aramco as well as other Gulf countries, including Oman and Abu Dhabi, considering listing oil assets.
The FCA proposal will be reviewed until October 13 and the regulator will publish new rules towards the end of the year.
Aramco is less enthusiastic about listing on a third exchange, possibly one in Asia, and may prefer to stick to a dual listing process that involves Riyadh’s Tadawul and London Stock Exchange, one of the sources said.
Aramco, London Stock Exchange and New York Stock Exchange all declined to comment, while there was no immediate comment from Saudi officials contacted by Reuters.
Bankers expect to get more clarity on Aramco’s listing plans at a conference organised by Saudi Arabia’s Public Investment Fund (PIF) on October 24 to 26 in Riyadh, one source said.
Senior Saudi Aramco executives, including its chief executive, are scheduled to meet on August 3 in London for a regular review of ongoing business activities, others said.
A dual listing in London and Riyadh would be easier and faster to pursue, the sources said, adding that Aramco might miss its IPO window next year if it attempts to include a third stock market, which would add another layer of complexity.
But even if Saudi Aramco is not listed in Asia, Chinese investors and companies will still be offered a sizeable stake in a bid to satisfy key buyers of Saudi crude, one source said.
Reuters reported in April that China is creating a consortium, including state-owned oil giants and banks and its sovereign wealth fund, to act as a “cornerstone” IPO investor.
As well as New York and London, Hong Kong, Singapore, Tokyo, Hong Kong and Toronto are all seeking to have Saudi Aramco list on their respective markets.
But experts have long pointed to the amount of information public companies listed in the US are required to disclose as a reason for a decline in IPOs in New York and Saudi Arabia will be cautious that it may be forced to reveal sensitive information relating to Aramco — which will still be largely government-owned after the IPO.
This includes details on how the kingdom controls its energy sector and manages money from the company’s earnings. “The Saudis want to disclose as little as possible and this makes a New York listing very unattractive,” one source said.
But the US Securities and Exchange Commission is also working on proposals to potentially scale back the scope and breadth of disclosure rules to get more companies to go public, its new chairman Jay Clayton said this month.
And although Aramco’s banks believe a London-listing is financially the best solution, there are other factors that the Saudis will take into account and the final outcome is far from decided, one of the sources said.
JPMorgan Chase & Co, Morgan Stanley and HSBC have been hired as international financial advisers for its initial public offering, Reuters reported in March.
The trio joined Moelis & Co and Evercore, who had already been appointed as independent financial advisers.
HSBC, JPMorgan and Moelis declined to comment, while Morgan Stanley and Evercore were not immediately available for comment.


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