Saudi Aramco revs up IPO sales pitch

Saudi Arabia's efforts to boost interest in the IPO of state oil giant Aramco are moving into higher gear.

Driving the news: The company posted a new "corporate overview" yesterday that pledges a $75 billion dividend in 2020 and for several years ahead.

• It appears to be aimed at reassuring potential investors that they would benefit, as opposed to just the Saudi government, which would remain the dominant shareholder.
• Aramco pledges that through 2024, if dividends fall below $75 billion, payments to outside shareholders are "intended" to be prioritized "so that they receive their pro-rata share of a $75 [billion] equivalent dividend."

In addition, Bloomberg reports that Aramco has "approached Asian state oil producers including Malaysia's Petroliam Nasional Bhd. and China's Sinopec Group about potential cornerstone investments" in the IPO.

Why it matters: Saudi officials hope the planned IPO will generate a mammoth inflow of cash to fund the kingdom's economic diversification.

• But last month's attacks against a huge Aramco processing facility and oilfield highlighted its vulnerabilities too.
• And the kingdom is expected to struggle to reach their hoped-for $2 trillion valuation — a level that would bring in $100 billion in what's eventually planned to be a 5% float.

What they're saying: "This dividend discussion appears to be structured so as to remove any doubt over where investors stand relative to the government, which will remain the majority shareholder," BCA Research's Bob Ryan tells Axios in an email.

But, but, but: The new presentation doesn't say outside investors would be guaranteed to benefit in a system where Aramco first and foremost bankrolls the Saudi government.

The intrigue: The document also amends the royalty rates. Starting in January, they would be 15% for Brent crude prices up to $70 per barrel, jumping to 45% when prices are between $70 and $100, and 80% for higher prices.

• Per Bloomberg, that's lower than the current rate for prices below $70, though the new peak is higher.
• "The company is laying out a royalty scheme that would appear to be competitive with other such schemes in states that are competing for foreign direct investment," Ryan says.

Go deeper: The fading Saudi oil freakout