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Oil tanks at an oil processing facility of Saudi Aramco. Photo: Stanislav Krasilnikov / Contributor/Getty Images

Saudi Aramco on Saturday published the prospectus for its plans to float a small slice of the world's largest oil-producing company on the kingdom's domestic exchange.

Why it matters: This brings Aramco closer to the long-planned, long-delayed public debut, which could be the largest IPO ever. Crown Prince Mohammed bin Salman envisions raising tens of billions of dollars to fund Saudi's economic diversification efforts.

What's next: The prospectus will begin a bidding period for investors on Nov. 17, and announcement of the final price is scheduled for Dec. 5.

  • Trading is expected to begin in mid-December, per The New York Times.
  • Individual investors will be allocated up to 0.5% of the shares, the prospectus states.

What we don’t know: The 658-page document does not say what the offer price will be, how much of the company will be floated or list an estimated valuation.

  • Bin Salman previously hoped for a valuation of $2 trillion, but bank and analyst estimates have been lower, often substantially so.
  • Kingdom officials have planned to list as much as 5% of the company in a two-tiered process, with the IPO on the domestic exchange first, followed by a listing on a larger, as-yet-unnamed international venue. However, the status of the second step is unclear.

The big picture: The mammoth oil producer reported $111 billion in net income last year and holds massive reserves. It provides roughly 10% of the world's crude oil supply.

  • There are, nonetheless, questions about its appeal to investors. The company faces security risks laid bare in aerial attacks it suffered in September.
  • In addition, the company is controlled by the Saudi government, which will remain its dominant shareholder.
  • Weeks ago, Aramco pledged a $75 billion dividend from 2020 through 2024, and, in a move aimed at reassuring potential investors, said outside shareholders are "intended" to be prioritized if they fall below that amount.

The intrigue: The prospectus touts a suite of "competitive strengths," such as "Unrivalled scale of crude oil and condensate production and conventional proved reserves" and low per-barrel production costs.

Overall, Aramco sees Saudi crude, condensate and natural gas liquid supplies growing through at least 2050.

  • It also says growth for oil demand in Asia and other developing nations is expected to offset the effects of alternative energy and new technology like electric vehicles.
  • The prospectus cites a forecast by IHS Markit, the industry consultant on the document, that global demand is slated to grow through roughly 2035 before leveling off, and "an expected increase in market share from lowest cost producers, including the Kingdom."
  • It says that in a scenario where a more rapid transition away from fossil fuels causes demand to peak in the late 2020s, the kingdom's output would still rise through mid-century.

But, but, but: A section of risk disclosures acknowledges: "Climate change concerns and impacts could reduce global demand for hydrocarbons and hydrocarbon-based products and could cause the Company to incur costs or invest additional capital."

  • It also notes the company may be affected by "Political and social instability and unrest," armed conflict and terrorism.

Go deeper:

Editor's note: This piece has been updated to clarify that the prospectus' projection about global oil demand was citing a forecast by IHS Markit.

Go deeper

The startup that wants to disrupt big internet providers

Maura Losch/Axios

A new startup backed by funding from AOL founder Steve Case and Laurene Powell Jobs wants to break up broadband monopolies across the country.

Why it matters: Internet access has been crucial during the pandemic, but it's not ubiquitous, and it can be both slow and unaffordable in swaths of the country.

1 hour ago - World

Top general: China's hypersonic missile test "very close" to a "Sputnik moment"

Gen. Mark Milley. Photo: Rod Lamkey-Pool/Getty Images

Gen. Mark Milley, the chairman of the Joint Chiefs of Staff, warned Wednesday that China's test of a hypersonic missile is "very concerning" and "very close" to the kind of "Sputnik moment" that triggered the Space Race during the Cold War.

Why it matters: The comments by America's top uniformed general underscore the depths of U.S. concerns about China's rapid military expansion and development of advanced weaponry.

Climate reckoning for oil and gas CEOs

Illustration: Aïda Amer/Axios

Top executives from ExxonMobil, BP, Chevron and Shell will face a reckoning on Capitol Hill Thursday, as they're grilled on evidence that their companies knew for years that their products were driving climate change but chose to downplay or deny it.

Why it matters: The hearing before the House Oversight Committee will be the first time these executives have been brought together to provide sworn testimony regarding what they knew about the ties between their company's products and climate change, and when they knew it.