Records were broken when Saudi Aramco listed on the kingdom’s Tadawul stock exchange on 11 December.
The initial public offering (of just 1.5% of the oil giant) saw it hit an initial valuation of $1.88trn (€1.69trn) before temporarily breaking through the $2trn mark just one day later.
Chairman Yasir Al Ruymayyan commented: “Today, the Kingdom of Saudi Arabia is no longer the only shareholder of the company.
“More than five million shareholders have joined.”
The headline grabbing floatation saw the global brent crude oil price dip slightly to $63.72/barrel on 11 December; but it has recovered somewhat, reaching a three-month high of $65.34 on 16 December.
This is its highest level since 16 September ($69.02), although that was a noticeable spike in an otherwise downbeat second half of the year.
Oil started 2019 priced at $54.91/barrel and peaked at $74.57 on 23 April.
COP25
The timing of the IPO was interesting, as it took place while the UN Climate Change Conference 25 (COP25) was being held in Madrid.
World leaders gathered to discuss ways to reduce carbon emissions and limit global warming.
Talks, however, were strained and a compromise deal was reached after two additional days were granted for discussion.
But it did not address some of the key issues raised – specifically around carbon markets.
This topic and much more will have to wait until the Glasgow 2020 summit.
Four key steps
One individual with a view on how climate change should be tackled, however, is the president and chief executive of Saudi Aramco, Amin Nasser.
Speaking at the Oil and Money Conference in London in October, he described the current approach to reducing greenhouse gas emissions as unacceptable.
“Simply speaking, thus far the world has focused on just two fixes: replacing hydrocarbons with renewables in the power sector, and on electrifying light duty road passenger transport via electric vehicles.
“The serious flaw in this approach is its exceptionally narrow focus, as electricity accounts for roughly a quarter of global greenhouse gas emissions and light duty passenger vehicles only about 8%.”
He went on to outline “four key strategies that have the potential to make the global effort much more effective”.
“First, we must go beyond electric power generation and light duty passenger transport, broadening our focus and paying attention to all the other economic sectors that jointly account for about two-thirds of global greenhouse gas emissions.
“Second, most clean R&D and technology funding by governments is currently focused on emerging energy sources, and this must be extended to the existing energy sources that will be with us for a long time to come.
“Third, we should concentrate on moving toward a circular economy: an economic system focused on the elimination of waste and the sustainable use of resources, which could be characterised by the three Rs of reducing, reusing and recycling.
“This compares to a traditional linear economy in which raw materials are mined or extracted, processed, and turned into products, but then are simply thrown away after one use rather than being remade, repaired or recycled.
“Carbon and a wide variety of other materials and resources can be similarly transformed into circular systems. In other words, we need to ‘close the loop’ to the maximum extent possible.
“And fourth, let us take advantage of the greenhouse-gas reduction synergies across economic sectors offered by the circular economy, which will be lost if we work on various sectors in isolation, or focus only on a selected few.”
Reducing oil and gas impact
“Without a doubt, oil and gas will be here for many decades to come,” Nasser added.
“But there can also be no question that climate change is among the most significant challenges facing humanity.”
He added that “the world’s current carbon management strategies are too narrowly focused”.
“Instead, we need to make greenhouse gas reduction efforts across all economic sectors, to direct clean energy R&D and technology funding toward both existing and new energy sources, and adopt the circular economy model.”
