Saudi Aramco IPO: Rice expert available for comment

EXPERT ALERT

Amy McCaig
713-348-6777
amym@rice.edu

Saudi Aramco IPO: Rice expert available for comment

HOUSTON – (Nov. 4, 2019) – With Saudi Aramco’s initial public offering underway, many analysts are wondering about the wisdom of investing in the oil giant controlled by Saudi Arabia’s royal family. Jim Krane, the Wallace S. Wilson Fellow for Energy Studies at Rice University’s Baker Institute for Public Policy, closely follows Saudi Aramco and is available for comment.

Krane said greenlighting the IPO has been a contentious issue within the kingdom, with many well-placed Saudis opposing it. Ultimately, however, privatizing a piece of the world’s largest oil company makes sense, he said.

“Saudi oil strategy is always focused on the long term, given the scale of the kingdom’s natural resources,” Krane said. “Given the long-run uncertainties for fossil fuels due to climate change, Saudi Arabia needs to recalibrate its economy to reduce its dependence on a single commodity.

“By selling shares of Aramco and plowing the profits into creating new lines of business in Saudi Arabia, the kingdom can insulate itself from some of the long-term risks around oil, as well as some of the cyclical price swings,” Krane continued. “Done right, the IPO proceeds can even help create jobs for unemployed Saudis.”

Saudi oil is an extraordinarily profitable business, Krane said. He noted that Saudi Arabia probably cannot diversify into new sectors that would match the returns of oil. Even so, uncertainties in the oil market and worsening public sentiment about fossil fuel investment meant waiting longer to launch the IPO could have reduced the appetite for Aramco shares, Krane concluded.

To interview Krane, contact Amy McCaig, senior media relations specialist at Rice, at 713-348-6777 or amym@rice.edu.

Rice University has a VideoLink ReadyCam TV interview studio. ReadyCam is capable of transmitting broadcast-quality high-definition and standard-definition video directly to all news media organizations around the world 24/7. Rice also has a university backdrop, 1080p webcam, light kit and wireless mic for Skype interviews.

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Related materials:

Jim Krane bio: https://www.bakerinstitute.org/experts/jim-krane/

Krane on Twitter: @jimkrane

Images for download: https://www.bakerinstitute.org/media/files/expert/6d9d3ade/jim_krane_web.jpg

Photo credit: Rice Baker Institute.

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