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Saudi Crown Prince Mohammed bin Salman. Photo: Presidency Press Service / Pool Photo via AP

Let's revisit Friday's reports that Saudi Arabia may delay selling shares of state oil giant Aramco on international exchanges next year, and may even shelve the plan entirely. The company is instead weighing plans to privately offer stakes to investors including China, according to various media reports including the Financial Times, which broke the story on Friday. FT says options includes selling shares to big sovereign wealth funds and institutional investors.

Why it matters: The planned IPO would likely have been the largest ever, generating massive fees for exchanges in New York or London, the leading candidates for the principal listing venue. It's meant to raise tens of billions of dollars to seed Saudi Arabia's long-term plan to modernize its economy and diversify away from oil.

Thought bubble, part 1: My Axios colleague Dan Primack passed along some context on what it would mean to scuttle a public listing and shift to private sales:

  • For Aramco, this would still bring in lots of cash. But having an IPO on a big public exchange would have enabled the company to float more shares in the future relatively seamlessly if the kingdom wants to raise fresh capital. That's harder with unique transactions negotiated with private buyers.
  • There are also risks for buyers, who would have a harder time dumping shares in the company if they decided to divest for one reason or another.

Thought bubble, part 2: The 11th-hour uncertainty is truly remarkable, given the stakes and the years spent planning for the IPO of 5% of the company.

For the record: The company called the FT report "entirely speculative" on Twitter over the weekend, adding: "All listing venues under review for optimal decision, IPO process is on track for 2018."

Be smart: David Goldwyn, who was the State Department's top energy official early in Hillary Clinton's tenure, says the uncertainty stems from the Saudi's aversion to putting information about the company in the public realm.

"The question was always whether the Saudis could tolerate the transparency requirements of the listing agencies," he tells Axios. "They pressed very hard for U.K. and others to relax their requirements. To their credit, the agencies did not lower their standards."

Goldwyn said Crown Prince Mohammad bin Salman and Aramco may have hoped that the appetite for the IPO was so strong that Aramco could sell shares without opening their books like a western company.

"That's not going to happen. The debate is not over, but score this round one point for the forces of transparency in the capital markets and zero for the forces supporting transparency in Saudi Arabia," said Goldwyn, who now runs a consultancy with energy industry clients.

Go deeper

California governor declares drought emergency for entire state

California Gov. Gavin Newsom speakinng to reporters in Los Angeles in September. Photo: Allen J. Schaben/Los Angeles Times via Getty Images

California Gov. Gavin Newsom (D) extended a drought emergency declaration to cover the entire state on Tuesday.

Why it matters: "California is experiencing its worst drought since the late 1800s, as measured by both lack of precipitation and high temperatures," per a statement from the governor's office. This past August was the driest and hottest one on record, "and the water year that ended last month was the second driest on record," the statement added.

Updated 2 hours ago - World

Reports: Brazil leader to be accused of crimes against humanity over COVID

Brazilian President Jair Bolsonaro. Photo: Andressa Anholete/Bloomberg via Getty Images

A Brazilian Senate panel will recommend President Jair Bolsonaro be charged with "crimes against humanity," alleging his COVID-19 pandemic response led to hundreds of thousands of deaths, per the New York Times and the Washington Post.

The latest: The lawmakers initially said Bolsonaro should be charged with mass homicide and genocide, but lawmakers updated the report to replace these recommendations with the new charge, its lead author, Sen. Renan Calheiros, told the NYT.

Updated 6 hours ago - World

North Korea claims latest missile test new weapon launched from submarine

North Korean state media claims the country's military fired this missile on Tuesday. Photo: Korean Central News Agency

North Korean state media announced that a detected ballistic missile launch off its east coast on Tuesday was a newly developed weapon test-fired from a submarine.

Why it matters: Pyongyang's latest in a series of recent missile launches into the sea happened hours after U.S. officials emphasized their commitment to restart negotiations on North Korea's nuclear weapons program, which have stalled since talks broke down during the Trump administration, AP notes.