Due to historical ties between Saudi Arabia and the United States, Mohamed ben Salman was bent on New York before Aramco's IPO project was frozen last year, sources said. even though oil company lawyers and some advisers had already raised these legal issues.
New York provides access to the largest investor community in the world, an essential element for a company that hopes to raise up to $ 100 billion (90 billion euros) through this transaction, an amount that could prove difficult to reach in other financial centers.
The American president Donald Trump he himself urged Arabia to choose Wall Street.
According to an informed source of this IPO project, Aramco's Board of Directors, consisting of ministers and company executives, reached a conclusion this month following a conclusion that that a listing in the United States will not be considered "unless Aramco obtains sovereign immunity protecting it from any legal process".
"It is difficult, if not impossible, to obtain," said the source.
The plan to market 5% of Aramco's capital is a central element of Mohamed Ben Salman's Vision 2030 plan to transform Saudi Arabia by reducing its dependence on oil.
Towards a more realistic project
The crown prince hopes to get a valuation of the company to $ 2,000 billion but this amount is considered too ambitious by some Saudi officials as by bankers.
The choice to remove New York from the race and a downward revision of the size of the operation would indicate that technocrats within Aramco and the Saudi government are pushing for a more realistic project, sources said. .
This IPO, which was originally scheduled for 2017, is a magnet for the stock markets of New York, London, Hong Kong and Tokyo. The group aims for a double listing, in Saudi Arabia and abroad.
Saudi officials, however, believe that the IPO procedure in New York and its complex rules could legally alter the sovereignty of the kingdom, which intends to remain a major shareholder with probably a 95% stake.
"Listing in New York is no longer an option," said an industry source close to the IPO process.
Ryad and London are now favorites, with a Saudi-only rating in the first place before another internationally later, said four sources.
According to three sources, a listing of Aramco on Wall Street would expose Saudi Arabia to the Jasta law ("Justice Against Sponsors of Terrorism Act"), which allows complaints against a state for attacks against US interests.
This law opens the way to proceedings against Saudi Arabia by those who blame it for the attacks of September 11, 2001. Ryad denies any responsibility in these attacks, committed by a commando composed mostly of Saudis.
The kingdom could also face the threat of a bill called the Nopec ("No Oil Producing and Exporting Cartels Act"), to allow the prosecution of foreign countries accused of understanding to limit oil supplies and fix lessons.
Aramco could finally be concerned by the ongoing legal proceedings in the United States against oil companies accused of promoting climate change, the sources said.
Asked if the proposed listing in New York was abandoned, Aramco said in a statement that it "continued to discuss with its shareholder about IPO preparations". "The business is ready and the timing (of the transaction) will depend on market conditions and what the shareholder chooses," she said.
The IPO process was suspended to allow Saudi Aramco to finalize the takeover of the Saudi Basic Industries (Sabic) petrochemical group and the deal is expected to take place in 2020 or early 2021.
Aramco has already asked major international banks to submit their proposals for a possible role in the IPO project, according to two sources close to the case. They will be invited to defend their plans early September in London, said one of two sources.