Saudi Aramco valuation tops $1 trillion after tax cut

Bloomberg

Saudi Aramco could have a market value of more than $1 trillion, Sanford C. Bernstein & Co. estimates, after the government slashed
the oil producer’s tax burden to
attract investors ahead of what may be the world’s biggest initial public offering.
The tax cut will increase Aramco’s net income by 300 percent, putting its per-barrel income in a range similar to that of international oil companies including Exxon Mobil Corp., Bernstein analysts said in a report. A production-weighted valuation on a par with such companies could give Aramco, known officially as Saudi Arabian Oil Co., a market value
of $1 trillion to $1.5 trillion, the |analysts said.
The Saudi government announced it’s reducing Aramco’s tax rate to 50 percent from 85 percent, as it prepares to offer investors as much as 5 percent of the world’s biggest oil exporter. Estimates of Aramco’s potential valuation vary widely. Deputy Crown Prince Mohammed bin Salman has said it’s worth about $2 trillion, while consultant Wood Mackenzie Ltd. valued the company last month at around $400 billion, according to clients who attended a private briefing.