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Westlake Legal Group > Saudi Arabia

For Trump, Instinct After Florida Killings Is Simple: Protect Saudis

Westlake Legal Group 07dcPrexy-facebookJumbo-v2 For Trump, Instinct After Florida Killings Is Simple: Protect Saudis Trump, Donald J Saudi Arabia Republican Party Presidential Election of 2020 Mohammed bin Salman (1985- ) Khashoggi, Jamal Iran Biden, Joseph R Jr Al Qaeda

FORT LAUDERDALE, Fla. — When a Saudi Air Force officer opened fire on his classmates at a naval base in Pensacola, Fla., on Friday, he killed three, wounded eight and exposed anew the strange dynamic between President Trump and the Saudi leadership: The president’s first instinct was to tamp down any suggestion that the Saudi government needed to be held to account.

Hours later, Mr. Trump announced on Twitter that he had received a condolence call from King Salman of Saudi Arabia, who clearly sought to ensure that the episode did not further fracture their relationship. On Saturday, leaving the White House for a trip here for a Republican fund-raiser and a speech on Israeli-American relations, Mr. Trump told reporters that “they are devastated in Saudi Arabia,” noting that “the king will be involved in taking care of families and loved ones.” He never used the word “terrorism.”

What was missing was any assurance that the Saudis would aid in the investigation, help identify the suspect’s motives, or answer the many questions about the vetting process for a coveted slot at one of the country’s premier schools for training allied officers. Or, more broadly, why the United States continues to train members of the Saudi military even as that same military faces credible accusations of repeated human rights abuses in Yemen, including the dropping of munitions that maximize civilian casualties.

“The attack is a disaster for an already deeply strained relationship,” Bruce Riedel, a scholar at the Brookings Institution and a former C.I.A. officer who has dealt with generations of Saudi leaders, said on Saturday. It “focuses attention on Americans training Saudi Air Force officers who are engaged in numerous bombings of innocents in Yemen, which is the worst humanitarian catastrophe in the world,” he said, noting that the Trump administration had long been fighting Congress as it seeks to end American support for that war.

But even stranger, said Mr. Riedel, was “the president’s parroting of the Saudi line” before learning the results of an investigation into whether the gunman acted alone, or had allegiances to Al Qaeda or terrorist groups.

For the White House, the calculus is simple: Saudi Arabia is not only critical to world oil supplies — though no longer critical to the United States’ — it is the only regional power able to counter Iran. The result, former members of the Trump administration say, has been a dismissal of any critiques that could weaken that bond.

Mr. Trump was so quick and so eager to assure the Saudis that the relationship would continue before anyone knew how to categorize the shooting that it raised questions about how the administration would have responded if the suspect had been an Iranian, or an immigrant from Mexico. During the 2016 presidential campaign, Mr. Trump often cited the killing of a young woman in California by an undocumented immigrant as a reason to crack down on immigration and build a wall along the southern border.

“Had an attack been carried out by any country on his Muslim ban, his reaction would have been very different,” said Aaron David Miller, a longtime Middle East negotiator and now a senior fellow at the Carnegie Endowment for International Peace.

“But when it comes to Saudi, the default position is to defend,” he said, “Driven by oil, money, weapons sales, a good deal of Saudi feting and flattery, Trump has created a virtually impenetrable zone of immunity for Saudi Arabia.”

It was hardly the first time Mr. Trump had shown such tendencies. After the brutal killing in Istanbul of Jamal Khashoggi, the Saudi dissident and a legal American resident, Mr. Trump and Secretary of State Mike Pompeo played down American intelligence findings that closely tied Saudi Arabia’s crown prince, Mohammed bin Salman, to the matter. The findings suggested he had connections to the members of the hit team sent to Turkey — and almost certainly played a role in ordering them to bring Mr. Khashoggi back to the country by force.

Mr. Trump’s and Mr. Pompeo’s initial promises to follow the evidence wherever it led dissipated. Over the past year, Mr. Pompeo has expressed deep annoyance whenever the topic is raised. The United States was awaiting the results of a Saudi investigation, he often said, as if he expected that to offer a full accounting. And he told members of Congress that no matter the truth of what unfolded, the relationship between the kingdom and Washington was too important to be held hostage to one vicious, ill-thought-out act.

No American assessment of what the Saudi leadership knew has ever been made public.

Before the shooting on Friday, the White House was already fighting efforts in Congress to cut military aid to the Saudis, a reflection of anger over the Khashoggi murder and continuing war in Yemen. But the Pensacola attack underlined the continuing instinct to protect the relationship.

“If Trump wants to convey condolences from Saudi King Salman, fine,” Mr. Miller wrote on Twitter after the shooting. “But you don’t do it on day — Americans are killed — untethered from a message of ironclad assurances from King to provide” whatever cooperation is necessary to understand the gunman and his motives. “Otherwise Trump sounds like what he has become — a Saudi apologist.’’

After Mr. Pompeo announced that he had spoken with the Saudi foreign minister, Faisal bin Farhan al-Saud, about the shooting, Martin Indyk, a former American ambassador to Israel and longtime Middle East negotiator, tweeted: “Isn’t it interesting how quick Trump and Pompeo are to broadcast Saudi government condolences for the murder of three Americans and how slow they were to criticize the Saudi government’s murder” of Mr. Khashoggi.

Still, the bond between the countries is weakening, as the erosion of support in Congress shows. A negotiation over providing nuclear technology to the Saudis, a huge push early in the administration, has stalled. The chances that the military support will remain at current levels appear slim.

“The U.S.-Saudi relationship is on life support,” Mr. Riedel said, noting that it would be in jeopardy if a Democrat were to win the 2020 election. “Even Joe Biden is calling the Kingdom a ‘pariah’ that needs to be punished,” he said, referring to the former vice president, who had for decades supported a strong relationship with the Saudis.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

How Aramco’s Huge I.P.O. Fell Short of Saudi Prince’s Wish

Westlake Legal Group 04aramco-2-facebookJumbo How Aramco’s Huge I.P.O. Fell Short of Saudi Prince’s Wish Saudi Aramco Saudi Arabia Prices (Fares, Fees and Rates) Oil (Petroleum) and Gasoline Mohammed bin Salman (1985- ) Initial Public Offerings Banking and Financial Institutions

Early on Oct. 15, a group of international investment bankers delivered some unwelcome news to top executives of Saudi Arabia’s giant oil company, Saudi Aramco.

The bankers, gathered at Aramco’s headquarters in Dhahran, reported that global investors weren’t as bullish on the company’s initial public offering of stock as the officials had expected, said two people who were in the room and three who were briefed on the meeting. That meant Aramco appeared unlikely to reach the $2 trillion valuation wanted by Saudi Arabia’s crown prince, Mohammed bin Salman.

Instead, a banker from JPMorgan Chase, presenting on behalf of the group, explained that investors viewed Aramco as worth $1.1 trillion to $1.7 trillion.

Aramco executives, who hadn’t seen the news coming, were angry. Saudi Arabia was counting on the I.P.O. to attract foreign investment to help diversify its economy away from oil. An Aramco I.P.O. valuation reduced by forecasts of weakening global demand for oil and geopolitical jitters could hurt that effort.

On Thursday, Saudi Aramco priced the I.P.O at 32 riyals, or $8.53, a share, valuing the company at $1.7 trillion. The offering is expected to raise $25.6 billion — a fraction of the $100 billion that Prince Mohammed originally imagined. The company’s shares are set to begin trading Wednesday on Saudi’s stock exchange, known as the Tadawul.

The result was not what Saudi officials had in mind. Rather than being listed in New York or London, shares of Aramco are being sold primarily to investors in Saudi Arabia and in neighboring countries. Some of the international banks hired to underwrite the deal have instead taken on secondary roles, with the I.P.O. share sales being overseen by two Saudi banks and the British bank HSBC.

“The Aramco I.P.O. was meant to be Saudi Arabia’s debut ball to global investors,” said Karen Young, a resident scholar at the American Enterprise Institute. “Instead, it will be more of a family reunion.”

According to interviews with a dozen underwriters, strategists and others briefed on the I.P.O., who spoke on the condition of anonymity to discuss confidential negotiations, Aramco’s journey from private to public company was an unwieldy and at times fractious deal-making process. It involved 25 banks, three financial advisers, numerous Aramco company officials, at least two Saudi government committees and the crown prince himself.

The idea to sell shares in state-owned Aramco, the world’s most profitable company, which for decades has been an engine of the Saudi economy, was foundational to Prince Mohammed’s Vision 2030 plan to modernize that economy. Released in 2016, that blueprint helped vault Prince Mohammed, then the deputy crown prince, to become the heir apparent to his father, King Salman. JPMorgan, Morgan Stanley and HSBC were brought in to start the long process of preparing the company for sale to public investors.

The I.P.O. was initially proposed to take place in 2018, but then shelved amid concerns over how highly the company would be valued and where it should list its shares. That year also saw Prince Mohammed come under global condemnation after the brutal killing of Jamal Khashoggi, a Washington Post columnist, by Saudi agents in Istanbul. Western intelligence agencies linked the crown prince to the killing, but he has denied involvement.

Then, this year, plans for the I.P.O. were revived.

Over two days of meetings on Sept. 3 and 4, international banks gathered in Aramco’s London offices to pitch the company for roles on the I.P.O. underwriting team.

Many of the banks said they envisioned situations where the company could be worth $2 trillion or more, said four people who attended the meeting, another three who were briefed on it and documents reviewed by The New York Times. Bank of America’s estimates reached $2.5 trillion on the high end, these people added; JPMorgan’s drifted as low as $1.4 trillion, according to the documents and two people with knowledge of their presentation.

Around the same time, Prince Mohammed installed Yasir al-Rumayyan, a close confidant who favored the $2 trillion valuation, as Aramco chairman, replacing Khalid al-Falih, a former Aramco chief executive with an engineering background. Mr. al-Rumayyan, the powerful governor of the kingdom’s $320 billion Public Investment Fund, had discussed the plans with bank officials over the summer.

Then on Sept. 14, on its path to going public, Aramco was jarred by an aerial attack on its production facilities, blamed on Iran, that temporarily cut its oil output in half. The attack underscored the risk of operating in the Middle East, but it did not deter the march to an I.P.O.

Deal makers soon fanned out over Asia, Europe and North America to gauge interest in Aramco by Fidelity Investments, Capital Group, BlackRock and other major investors. To make Aramco more attractive, the banks persuaded it to establish an enormous investor dividend, or annual payout — $75 billion a year.

But in meetings with roughly 80 mutual funds, hedge funds and sovereign wealth funds, underwriters and investors said, potential buyers balked at the $2 trillion valuation, which struck them as too high relative to other major oil companies and in light of low oil prices, climate-change concerns and other geopolitical pressures.

“We felt that a valuation in the range of $1.2 to $1.3 trillion would represent fair value,” or a reasonable price, “but it would need to I.P.O. at less than that to offer decent upside,” or investor profit potential, said Tal Lomnitzer, a portfolio manager at the fund company Janus Henderson who participated in the early investor discussions.

His was in some ways the typical buyer’s position at the onset of a negotiation: to argue for the lowest price in hopes of making money on the purchase if Aramco shares went up in public-market trading. But given the wide gap between views like Mr. Lomnitzer’s and the Saudi government’s $2 trillion expectations, some of the bankers were concerned.

Then came the meeting on Oct. 15 at Aramco’s headquarters in Dhahran on the kingdom’s Persian Gulf coast, and one that would follow the next day. Of all the crucial moments in the lead-up to the I.P.O., these gatherings may have been the most tense, according to four people who either attended the meetings or were briefed afterward. It was then that some of the bankers — motivated by the promise of enormous fees for evaluating the oil company’s investment potential and then selling shares to respected investors — clashed with kingdom officials and other advisers who were fixating on an increasingly elusive $2 trillion deal.

The banks, who had been sizing up investor demand for the I.P.O., delivered their findings to Amin H. Nasser, Aramco’s chief executive. Mr. Nasser was angry and taken aback by the news, said two people who were in the room and three others briefed on it later. He pointed out that some of the bankers had promised an Aramco valuation of even more than $2 trillion, and that his company had curbed spending plans and made other changes to accommodate the $75 billion dividend.

After the tense exchange, the bankers piled into cars and drove four hours across the desert to Riyadh to explain their reports, one by one, to Mr. al-Rumayyan, the Aramco chairman, said two of the people who were on the trip.

Mr. al-Rumayyan was also deeply unhappy. During the JPMorgan group’s presentation, according to four people with knowledge of the meeting, he criticized them for talking the valuation down. By the next day, Oct. 16, when the banking syndicate met to regroup, two camps had emerged: Citigroup, Goldman Sachs and Bank of America said that until they could share additional research on Aramco’s finances and hold more detailed conversations with potential buyers, they could not determine what price investors would truly be willing to pay, said three people who were part of the discussion and three who were briefed on it later.

Bankers from Morgan Stanley and JPMorgan, who had been working on the deal for years, were skeptical that investors would be willing to pay much more than they were already suggesting. The bankers argued that Saudi officials in charge of the I.P.O. should be given more details on why investors were cooler to the deal than expected. Underscoring that point, said three people who were there, was Franck Petitgas, head of Morgan Stanley’s international division, who asked how the underwriters could, in good conscience, not share the dozens of investor comments the bankers received in their initial meetings. (Through a spokesman, Mr. Petitgas declined to comment.)

Michael Klein, a New York investment banker who was hired to advise Aramco, urged the more forward-looking approach. After another meeting with the bankers, a Saudi I.P.O. committee opted to delay the deal to hold additional investor discussions.

Aramco decided to carry on and on Nov. 3 issued its formal plan to go public. Its prospectus reported enormous profit — $68 billion for the first nine months of the year. But there were also caveats: Those earnings were down 18 percent from the year before, and risk factors to investing in the I.P.O. ranged from concerns over the impact of fossil fuels to the possibility of terrorist attacks.

The banks talked with investors, but their prices didn’t fundamentally change; at meetings held Nov. 15 and Nov. 16 with Mr. al-Rumayyan in Riyadh, banks reported that foreign investors were still valuing Aramco somewhere between $1.3 trillion and $1.8 trillion, according to two people who were there.

Faced with that, the kingdom abruptly canceled a series of more formal investor meetings in Asia, Europe and North America. It relegated most of the American banks to lesser roles and refocused on the plans for a domestic listing.

In the run-up to the I.P.O., interest in Aramco shares in Saudi Arabia appeared strong, buoyed by a substantial marketing campaign and low-interest-rate loans for stock purchases.

Hussam A. al-Saleh, a financial adviser based in Riyadh, predicted last month that most of his Saudi clients would wind up buying shares. Some of the interest stemmed from Aramco’s reputation in the kingdom as a classic stock, he said: “People believe in the company.”

And for the Saudi leadership, the pursuit of a $2 trillion valuation continues.

“It will be higher than the $2 trillion. I can bet that this will happen,” said Prince Abdulaziz bin Salman, the Saudi energy minister, who is the half brother of Prince Mohammed, speaking Friday at an OPEC news conference.

“It is the proudest day for Prince Mohammed to celebrate,” he said, referring to the offering. “We kept it to our family and friends.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

How Aramco’s Huge I.P.O. Fell Short of Saudi Prince’s Wish

Westlake Legal Group 04aramco-2-facebookJumbo How Aramco’s Huge I.P.O. Fell Short of Saudi Prince’s Wish Saudi Aramco Saudi Arabia Prices (Fares, Fees and Rates) Oil (Petroleum) and Gasoline Mohammed bin Salman (1985- ) Initial Public Offerings Banking and Financial Institutions

Early on Oct. 15, a group of international investment bankers delivered some unwelcome news to top executives of Saudi Arabia’s giant oil company, Saudi Aramco.

The bankers, gathered at Aramco’s headquarters in Dhahran, reported that global investors weren’t as bullish on the company’s initial public offering of stock as the officials had expected, said two people who were in the room and three who were briefed on the meeting. That meant Aramco appeared unlikely to reach the $2 trillion valuation wanted by Saudi Arabia’s crown prince, Mohammed bin Salman.

Instead, a banker from JPMorgan Chase, presenting on behalf of the group, explained that investors viewed Aramco as worth $1.1 trillion to $1.7 trillion.

Aramco executives, who hadn’t seen the news coming, were angry. Saudi Arabia was counting on the I.P.O. to attract foreign investment to help diversify its economy away from oil. An Aramco I.P.O. valuation reduced by forecasts of weakening global demand for oil and geopolitical jitters could hurt that effort.

On Thursday, Saudi Aramco priced the I.P.O at 32 riyals, or $8.53, a share, valuing the company at $1.7 trillion. The offering is expected to raise $25.6 billion — a fraction of the $100 billion that Prince Mohammed originally imagined. The company’s shares are set to begin trading Wednesday on Saudi’s stock exchange, known as the Tadawul.

The result was not what Saudi officials had in mind. Rather than being listed in New York or London, shares of Aramco are being sold primarily to investors in Saudi Arabia and in neighboring countries. Some of the international banks hired to underwrite the deal have instead taken on secondary roles, with the I.P.O. share sales being overseen by two Saudi banks and the British bank HSBC.

“The Aramco I.P.O. was meant to be Saudi Arabia’s debut ball to global investors,” said Karen Young, a resident scholar at the American Enterprise Institute. “Instead, it will be more of a family reunion.”

According to interviews with a dozen underwriters, strategists and others briefed on the I.P.O., who spoke on the condition of anonymity to discuss confidential negotiations, Aramco’s journey from private to public company was an unwieldy and at times fractious deal-making process. It involved 25 banks, three financial advisers, numerous Aramco company officials, at least two Saudi government committees and the crown prince himself.

The idea to sell shares in state-owned Aramco, the world’s most profitable company, which for decades has been an engine of the Saudi economy, was foundational to Prince Mohammed’s Vision 2030 plan to modernize that economy. Released in 2016, that blueprint helped vault Prince Mohammed, then the deputy crown prince, to become the heir apparent to his father, King Salman. JPMorgan, Morgan Stanley and HSBC were brought in to start the long process of preparing the company for sale to public investors.

The I.P.O. was initially proposed to take place in 2018, but then shelved amid concerns over how highly the company would be valued and where it should list its shares. That year also saw Prince Mohammed come under global condemnation after the brutal killing of Jamal Khashoggi, a Washington Post columnist, by Saudi agents in Istanbul. Western intelligence agencies linked the crown prince to the killing, but he has denied involvement.

Then, this year, plans for the I.P.O. were revived.

Over two days of meetings on Sept. 3 and 4, international banks gathered in Aramco’s London offices to pitch the company for roles on the I.P.O. underwriting team.

Many of the banks said they envisioned situations where the company could be worth $2 trillion or more, said four people who attended the meeting, another three who were briefed on it and documents reviewed by The New York Times. Bank of America’s estimates reached $2.5 trillion on the high end, these people added; JPMorgan’s drifted as low as $1.4 trillion, according to the documents and two people with knowledge of their presentation.

Around the same time, Prince Mohammed installed Yasir al-Rumayyan, a close confidant who favored the $2 trillion valuation, as Aramco chairman, replacing Khalid al-Falih, a former Aramco chief executive with an engineering background. Mr. al-Rumayyan, the powerful governor of the kingdom’s $320 billion Public Investment Fund, had discussed the plans with bank officials over the summer.

Then on Sept. 14, on its path to going public, Aramco was jarred by an aerial attack on its production facilities, blamed on Iran, that temporarily cut its oil output in half. The attack underscored the risk of operating in the Middle East, but it did not deter the march to an I.P.O.

Deal makers soon fanned out over Asia, Europe and North America to gauge interest in Aramco by Fidelity Investments, Capital Group, BlackRock and other major investors. To make Aramco more attractive, the banks persuaded it to establish an enormous investor dividend, or annual payout — $75 billion a year.

But in meetings with roughly 80 mutual funds, hedge funds and sovereign wealth funds, underwriters and investors said, potential buyers balked at the $2 trillion valuation, which struck them as too high relative to other major oil companies and in light of low oil prices, climate-change concerns and other geopolitical pressures.

“We felt that a valuation in the range of $1.2 to $1.3 trillion would represent fair value,” or a reasonable price, “but it would need to I.P.O. at less than that to offer decent upside,” or investor profit potential, said Tal Lomnitzer, a portfolio manager at the fund company Janus Henderson who participated in the early investor discussions.

His was in some ways the typical buyer’s position at the onset of a negotiation: to argue for the lowest price in hopes of making money on the purchase if Aramco shares went up in public-market trading. But given the wide gap between views like Mr. Lomnitzer’s and the Saudi government’s $2 trillion expectations, some of the bankers were concerned.

Then came the meeting on Oct. 15 at Aramco’s headquarters in Dhahran on the kingdom’s Persian Gulf coast, and one that would follow the next day. Of all the crucial moments in the lead-up to the I.P.O., these gatherings may have been the most tense, according to four people who either attended the meetings or were briefed afterward. It was then that some of the bankers — motivated by the promise of enormous fees for evaluating the oil company’s investment potential and then selling shares to respected investors — clashed with kingdom officials and other advisers who were fixating on an increasingly elusive $2 trillion deal.

The banks, who had been sizing up investor demand for the I.P.O., delivered their findings to Amin H. Nasser, Aramco’s chief executive. Mr. Nasser was angry and taken aback by the news, said two people who were in the room and three others briefed on it later. He pointed out that some of the bankers had promised an Aramco valuation of even more than $2 trillion, and that his company had curbed spending plans and made other changes to accommodate the $75 billion dividend.

After the tense exchange, the bankers piled into cars and drove four hours across the desert to Riyadh to explain their reports, one by one, to Mr. al-Rumayyan, the Aramco chairman, said two of the people who were on the trip.

Mr. al-Rumayyan was also deeply unhappy. During the JPMorgan group’s presentation, according to four people with knowledge of the meeting, he criticized them for talking the valuation down. By the next day, Oct. 16, when the banking syndicate met to regroup, two camps had emerged: Citigroup, Goldman Sachs and Bank of America said that until they could share additional research on Aramco’s finances and hold more detailed conversations with potential buyers, they could not determine what price investors would truly be willing to pay, said three people who were part of the discussion and three who were briefed on it later.

Bankers from Morgan Stanley and JPMorgan, who had been working on the deal for years, were skeptical that investors would be willing to pay much more than they were already suggesting. The bankers argued that Saudi officials in charge of the I.P.O. should be given more details on why investors were cooler to the deal than expected. Underscoring that point, said three people who were there, was Franck Petitgas, head of Morgan Stanley’s international division, who asked how the underwriters could, in good conscience, not share the dozens of investor comments the bankers received in their initial meetings. (Through a spokesman, Mr. Petitgas declined to comment.)

Michael Klein, a New York investment banker who was hired to advise Aramco, urged the more forward-looking approach. After another meeting with the bankers, a Saudi I.P.O. committee opted to delay the deal to hold additional investor discussions.

Aramco decided to carry on and on Nov. 3 issued its formal plan to go public. Its prospectus reported enormous profit — $68 billion for the first nine months of the year. But there were also caveats: Those earnings were down 18 percent from the year before, and risk factors to investing in the I.P.O. ranged from concerns over the impact of fossil fuels to the possibility of terrorist attacks.

The banks talked with investors, but their prices didn’t fundamentally change; at meetings held Nov. 15 and Nov. 16 with Mr. al-Rumayyan in Riyadh, banks reported that foreign investors were still valuing Aramco somewhere between $1.3 trillion and $1.8 trillion, according to two people who were there.

Faced with that, the kingdom abruptly canceled a series of more formal investor meetings in Asia, Europe and North America. It relegated most of the American banks to lesser roles and refocused on the plans for a domestic listing.

In the run-up to the I.P.O., interest in Aramco shares in Saudi Arabia appeared strong, buoyed by a substantial marketing campaign and low-interest-rate loans for stock purchases.

Hussam A. al-Saleh, a financial adviser based in Riyadh, predicted last month that most of his Saudi clients would wind up buying shares. Some of the interest stemmed from Aramco’s reputation in the kingdom as a classic stock, he said: “People believe in the company.”

And for the Saudi leadership, the pursuit of a $2 trillion valuation continues.

“It will be higher than the $2 trillion. I can bet that this will happen,” said Prince Abdulaziz bin Salman, the Saudi energy minister, who is the half brother of Prince Mohammed, speaking Friday at an OPEC news conference.

“It is the proudest day for Prince Mohammed to celebrate,” he said, referring to the offering. “We kept it to our family and friends.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Saudi Aramco to Raise $25.6 Billion in Biggest I.P.O. Ever

Westlake Legal Group 05aramcoIPO-facebookJumbo Saudi Aramco to Raise $25.6 Billion in Biggest I.P.O. Ever Stocks and Bonds Saudi Aramco Saudi Arabia Oil (Petroleum) and Gasoline Initial Public Offerings

Saudi Arabia’s giant state-owned oil company, Saudi Aramco, on Thursday set the price of its initial public offering at a level that would raise $25.6 billion, a sum that is expected to make it the world’s biggest I.P.O.

Saudi Aramco said it had set the initial share price at 32 riyals, or about $8.53, the high end of the range it forecast last month. It plans to sell three billion shares, 1.5 percent of the company. At that price, the company would be worth $1.7 trillion.

The amount raised by the sale would exceed the $25 billion raised by Alibaba, the Chinese online retail company, in its initial offering five years ago on the New York Stock Exchange.

And the total could go higher. The company said underwriters could decide to sell an additional quantity of shares that would raise the proceeds to $29.4 billion.

The I.P.O. will establish Aramco as one of the world’s most valuable companies, but the $1.7 trillion figure falls short of the Saudi royal family’s hopes of an offering that valued the company at close to $2 trillion.

Global investors proved to be skittish over the earlier valuations offered by the Saudi government. While its filings showed Aramco to be immensely profitable — it posted a profit of $68 billion for the first nine months of the year — its earnings have declined, and risks like global warming and geopolitical instability cast a pall over its prospects.

Aramco will sell its shares on the Riyadh stock market, the Tadawul. Trading is expected to begin Wednesday.

The I.P.O. process has been agonizingly slow since Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler, first raised the idea making the crown jewel of the Saudi economy a public company more than two years ago.

After big early promises, the Saudis have taken a more cautious approach, restricting the listing initially to Saudi Arabia in order to avoid the more rigorous disclosures that would be required in New York or London.

Despite Aramco’s big profits, oil companies are out of favor with some investors, who worry that concerns about the role of fossil fuels in climate change will eventually curb demand for Aramco’s large reserves of oil and gas.

Last month, the International Energy Agency forecast that world oil demand would flatten out in the 2030s because of increasingly efficient car engines and rising use of alternative energy sources.

In the shorter term, there are concerns that the combination of growing oil supplies from the United States, Canada, Brazil and other producers and weaker demand due to a slowing world economy may reduce Aramco’s profitability, potentially threatening its ability to pay the large dividends that it is promising investors.

The aerial attacks on Aramco facilities in September highlighted to potential investors the geopolitical risks of operating in the Persian Gulf. Iran was blamed for the attacks, which temporarily forced Aramco to cut production by more than half.

More broadly, the killing of the dissident journalist Jamal Khashoggi by Saudi agents last year has hurt the reputation of Prince Mohammed, and may repel some investors.

Still, the I.P.O. showcases the kingdom’s enormous oil wealth.

A prospectus giving Aramco’s financial results reveals some long-hidden details about the size of Saudi Arabia’s oil fields. Chief among these is a monster called Ghawar, which extends for about 120 miles in the eastern part of the kingdom. The world’s largest oil field, according to the prospectus, Ghawar has accounted for more than half of Saudi Arabia’s production, yet it still has reserves of 48 billion barrels.

The oil wealth doesn’t stop there. The kingdom has four more fields that dwarf most others.

Aramco produced 13.6 million barrels per day in 2018 on average, more than three times the 3.8 million reported by Exxon Mobil, according to the report.

The company, founded by United States oil companies (Aramco is short for Arabian American Oil Company), was nationalized by the Saudi government in the 1970s.

Carlos Tejada contributed reporting.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Saudi Aramco to Raise $25.6 Billion in Biggest I.P.O. Ever

Westlake Legal Group 05aramcoIPO-facebookJumbo Saudi Aramco to Raise $25.6 Billion in Biggest I.P.O. Ever Stocks and Bonds Saudi Aramco Saudi Arabia Oil (Petroleum) and Gasoline Initial Public Offerings

Saudi Arabia’s giant state-owned oil company, Saudi Aramco, on Thursday set the price of its initial public offering at a level that would raise $25.6 billion, a sum that is expected to make it the world’s biggest I.P.O.

Saudi Aramco said it had set the initial share price at 32 riyals, or about $8.53, the high end of the range it forecast last month. It plans to sell three billion shares, 1.5 percent of the company. At that price, the company would be worth $1.7 trillion.

The amount raised by the sale would exceed the $25 billion raised by Alibaba, the Chinese online retail company, in its initial offering five years ago on the New York Stock Exchange.

And the total could go higher. The company said underwriters could decide to sell an additional quantity of shares that would raise the proceeds to $29.4 billion.

The I.P.O. will establish Aramco as one of the world’s most valuable companies, but the $1.7 trillion figure falls short of the Saudi royal family’s hopes of an offering that valued the company at close to $2 trillion.

Global investors proved to be skittish over the earlier valuations offered by the Saudi government. While its filings showed Aramco to be immensely profitable — it posted a profit of $68 billion for the first nine months of the year — its earnings have declined, and risks like global warming and geopolitical instability cast a pall over its prospects.

Aramco will sell its shares on the Riyadh stock market, the Tadawul. Trading is expected to begin Wednesday.

The I.P.O. process has been agonizingly slow since Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler, first raised the idea making the crown jewel of the Saudi economy a public company more than two years ago.

After big early promises, the Saudis have taken a more cautious approach, restricting the listing initially to Saudi Arabia in order to avoid the more rigorous disclosures that would be required in New York or London.

Despite Aramco’s big profits, oil companies are out of favor with some investors, who worry that concerns about the role of fossil fuels in climate change will eventually curb demand for Aramco’s large reserves of oil and gas.

Last month, the International Energy Agency forecast that world oil demand would flatten out in the 2030s because of increasingly efficient car engines and rising use of alternative energy sources.

In the shorter term, there are concerns that the combination of growing oil supplies from the United States, Canada, Brazil and other producers and weaker demand due to a slowing world economy may reduce Aramco’s profitability, potentially threatening its ability to pay the large dividends that it is promising investors.

The aerial attacks on Aramco facilities in September highlighted to potential investors the geopolitical risks of operating in the Persian Gulf. Iran was blamed for the attacks, which temporarily forced Aramco to cut production by more than half.

More broadly, the killing of the dissident journalist Jamal Khashoggi by Saudi agents last year has hurt the reputation of Prince Mohammed, and may repel some investors.

Still, the I.P.O. showcases the kingdom’s enormous oil wealth.

A prospectus giving Aramco’s financial results reveals some long-hidden details about the size of Saudi Arabia’s oil fields. Chief among these is a monster called Ghawar, which extends for about 120 miles in the eastern part of the kingdom. The world’s largest oil field, according to the prospectus, Ghawar has accounted for more than half of Saudi Arabia’s production, yet it still has reserves of 48 billion barrels.

The oil wealth doesn’t stop there. The kingdom has four more fields that dwarf most others.

Aramco produced 13.6 million barrels per day in 2018 on average, more than three times the 3.8 million reported by Exxon Mobil, according to the report.

The company, founded by United States oil companies (Aramco is short for Arabian American Oil Company), was nationalized by the Saudi government in the 1970s.

Carlos Tejada contributed reporting.

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Saudi Aramco to Raise $25.6 Billion in Biggest I.P.O. Ever

Westlake Legal Group 05aramcoIPO-facebookJumbo Saudi Aramco to Raise $25.6 Billion in Biggest I.P.O. Ever Stocks and Bonds Saudi Aramco Saudi Arabia Oil (Petroleum) and Gasoline Initial Public Offerings

Saudi Arabia’s giant state-owned oil company, Saudi Aramco, on Thursday set the price of its initial public offering at a level that would raise $25.6 billion, a sum that is expected to make it the world’s biggest I.P.O.

Saudi Aramco said it had set the initial share price at 32 riyals, or about $8.53, the high end of the range it forecast last month. It plans to sell three billion shares, 1.5 percent of the company. At that price, the company would be worth $1.7 trillion.

The amount raised by the sale would exceed the $25 billion raised by Alibaba, the Chinese online retail company, in its initial offering five years ago on the New York Stock Exchange.

And the total could go higher. The company said underwriters could decide to sell an additional quantity of shares that would raise the proceeds to $29.4 billion.

The I.P.O. will establish Aramco as one of the world’s most valuable companies, but the $1.7 trillion figure falls short of the Saudi royal family’s hopes of an offering that valued the company at close to $2 trillion.

Global investors proved to be skittish over the earlier valuations offered by the Saudi government. While its filings showed Aramco to be immensely profitable — it posted a profit of $68 billion for the first nine months of the year — its earnings have declined, and risks like global warming and geopolitical instability cast a pall over its prospects.

Aramco will sell its shares on the Riyadh stock market, the Tadawul. Trading is expected to begin Wednesday.

The I.P.O. process has been agonizingly slow since Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler, first raised the idea making the crown jewel of the Saudi economy a public company more than two years ago.

After big early promises, the Saudis have taken a more cautious approach, restricting the listing initially to Saudi Arabia in order to avoid the more rigorous disclosures that would be required in New York or London.

Despite Aramco’s big profits, oil companies are out of favor with some investors, who worry that concerns about the role of fossil fuels in climate change will eventually curb demand for Aramco’s large reserves of oil and gas.

Last month, the International Energy Agency forecast that world oil demand would flatten out in the 2030s because of increasingly efficient car engines and rising use of alternative energy sources.

In the shorter term, there are concerns that the combination of growing oil supplies from the United States, Canada, Brazil and other producers and weaker demand due to a slowing world economy may reduce Aramco’s profitability, potentially threatening its ability to pay the large dividends that it is promising investors.

The aerial attacks on Aramco facilities in September highlighted to potential investors the geopolitical risks of operating in the Persian Gulf. Iran was blamed for the attacks, which temporarily forced Aramco to cut production by more than half.

More broadly, the killing of the dissident journalist Jamal Khashoggi by Saudi agents last year has hurt the reputation of Prince Mohammed, and may repel some investors.

Still, the I.P.O. showcases the kingdom’s enormous oil wealth.

A prospectus giving Aramco’s financial results reveals some long-hidden details about the size of Saudi Arabia’s oil fields. Chief among these is a monster called Ghawar, which extends for about 120 miles in the eastern part of the kingdom. The world’s largest oil field, according to the prospectus, Ghawar has accounted for more than half of Saudi Arabia’s production, yet it still has reserves of 48 billion barrels.

The oil wealth doesn’t stop there. The kingdom has four more fields that dwarf most others.

Aramco produced 13.6 million barrels per day in 2018 on average, more than three times the 3.8 million reported by Exxon Mobil, according to the report.

The company, founded by United States oil companies (Aramco is short for Arabian American Oil Company), was nationalized by the Saudi government in the 1970s.

Carlos Tejada contributed reporting.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Saudi Aramco Sets Its Market Value at Up to $1.7 Trillion

Westlake Legal Group 17aramco-sub-facebookJumbo Saudi Aramco Sets Its Market Value at Up to $1.7 Trillion Stocks and Bonds Saudi Aramco Saudi Arabia Oil (Petroleum) and Gasoline Mohammed bin Salman (1985- ) Initial Public Offerings Company Reports

Saudi Aramco, the world’s largest oil company, offered more details on the enormous share offering it is planning for December, setting an overall market value of the company of as much as $1.7 trillion, a figure short of the $2 trillion initially estimated by Crown Prince Mohammed bin Salman.

Still, the company could raise close to $26 billion when it offers shares to the public, a total that could make it the largest initial public offering ever.

Aramco said in a statement that the offering price for its shares would be between 30 and 32 riyals, or about $8 to $8.50 per share, and that 1.5 percent of the company, amounting to three billion shares, would be sold. That would set the value of the company between $1.6 trillion and $1.7 trillion.

Aramco said that it would publish the final price on Dec. 5. Trading on the Riyadh stock market, the Tadawul, is expected to commence around Dec. 12.

The I.P.O. could eclipse the amount generated by the Chinese e-commerce giant Alibaba on the New York Stock Exchange in 2014. The company raised nearly $22 billion on its first day of trading, and within a few days that figure reached about $25 billion.

Neil Beveridge, an analyst at Bernstein, a market research firm, said on Sunday that the price range being set by the Saudis was “above what we consider a fair price for the company and above what many institutional investors consider a reasonable price.” Bernstein pegs the company’s value at $1.2 trillion to $1.5 trillion, although other analysts have estimated that it’s higher.

Mr. Beveridge said Aramco seemed to be prioritizing a high valuation through sales to individual Saudi investors, who may be willing to pay a higher price for a national champion, and, possibly, sovereign wealth funds of friendly countries, rather than putting a larger portion of shares to a wider market.

Publication of the offer range is another milestone in what has been an agonizingly slow process since Prince Mohammed, Saudi Arabia’s de facto ruler, first broached the idea making the crown jewel of the Saudi economy a public company more than two years ago. After big early promises, the Saudis have recently taken a more cautious approach, restricting the listing initially to Saudi Arabia, avoiding the more rigorous disclosures that would be required in New York or London.

Aramco is enormously profitable, earning net income of $111 billion in 2018, but the company will be selling shares in a tough environment. Oil companies are out of favor with investors, who worry that concerns about the role of fossil fuels in climate change will eventually curb demand for Aramco’s large reserves of oil and gas.

Last week, the International Energy Agency forecast that world oil demand would flatten out in the 2030s, thanks to increasingly efficient car engines and rising use of alternative energy sources.

In the shorter term, there also concerns that the combination of growing oil supplies from the United States, Canada, Brazil and other producers and weaker demand because of a slowing world economy may weigh on oil prices, reducing Aramco’s profitability and potentially threatening its ability to pay the large dividends that it is promising investors.

The aerial attacks on Aramco facilities in September highlighted to potential investors the geopolitical risks of operating in the Persian Gulf. Iran was blamed for the attack, which temporarily forced the company to cut production by more than half.

More broadly, the killing of the dissident journalist Jamal Khashoggi by Saudi agents last year has hurt the reputation of Prince Mohammed, and may repel some investors.

The money raised will probably go not to further investment in Aramco but to the Public Investment Fund, a sovereign wealth fund that has become the crown prince’s main vehicle for reshaping the Saudi economy. The fund has been investing in technology companies like Uber, and it is also backing large real estate programs in the kingdom in an effort to attract tourists and new businesses.

Despite the frustrations of a process interrupted by stops and starts, Aramco has had little trouble recruiting some of the world’s major financial institutions to help sell its stock. Citigroup, JPMorgan, Goldman Sachs, HSBC and Morgan Stanley are all listed as financial advisers in the offer documents.

They are attracted by the potential fees and the possibility that Aramco will eventually expand the listing to an international exchange like New York or London. But there is also expected to be a strong flow of Saudi debt offerings and other transactions — more sources of revenue for Wall Street.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Saudi Aramco Sees Itself as a $1.7 Trillion Company

Westlake Legal Group 17aramco-sub-facebookJumbo Saudi Aramco Sees Itself as a $1.7 Trillion Company Stocks and Bonds Saudi Aramco Saudi Arabia Oil (Petroleum) and Gasoline Mohammed bin Salman (1985- ) Initial Public Offerings Company Reports

Saudi Aramco, the world’s largest oil company, offered more details on the enormous share offering it is planning for December, setting an overall market value of the company of as much as $1.7 trillion, a figure short of the $2 trillion initially estimated by Crown Prince Mohammed bin Salman.

Still, the company could raise close to $26 billion when it offers shares to the public, a total that could make it the largest initial public offering ever.

Aramco said in a statement that the offering price for its shares would be between 30 and 32 riyals, or about $8 to $8.50 per share, and that 1.5 percent of the company, amounting to three billion shares, would be sold. That would set the value of the company between $1.6 trillion and $1.7 trillion.

Aramco said that it would publish the final price on Dec. 5. Trading on the Riyadh stock market, the Tadawul, is expected to commence around Dec. 12.

The I.P.O. could eclipse the amount generated by the Chinese e-commerce giant Alibaba on the New York Stock Exchange in 2014. The company raised nearly $22 billion on its first day of trading, and within a few days that figure reached about $25 billion.

Neil Beveridge, an analyst at Bernstein, a market research firm, said on Sunday that the price range being set by the Saudis was “above what we consider a fair price for the company and above what many institutional investors consider a reasonable price.” Bernstein pegs the company’s value at $1.2 trillion to $1.5 trillion, although other analysts have estimated that it’s higher.

Mr. Beveridge said Aramco seemed to be prioritizing a high valuation through sales to individual Saudi investors, who may be willing to pay a higher price for a national champion, and, possibly, sovereign wealth funds of friendly countries, rather than putting a larger portion of shares to a wider market.

Publication of the offer range is another milestone in what has been an agonizingly slow process since Prince Mohammed, Saudi Arabia’s de facto ruler, first broached the idea making the crown jewel of the Saudi economy a public company more than two years ago. After big early promises, the Saudis have recently taken a more cautious approach, restricting the listing initially to Saudi Arabia, avoiding the more rigorous disclosures that would be required in New York or London.

Aramco is enormously profitable, earning net income of $111 billion in 2018, but the company will be selling shares in a tough environment. Oil companies are out of favor with investors, who worry that concerns about the role of fossil fuels in climate change will eventually curb demand for Aramco’s large reserves of oil and gas.

Last week, the International Energy Agency forecast that world oil demand would flatten out in the 2030s, thanks to increasingly efficient car engines and rising use of alternative energy sources.

In the shorter term, there also concerns that the combination of growing oil supplies from the United States, Canada, Brazil and other producers and weaker demand because of a slowing world economy may weigh on oil prices, reducing Aramco’s profitability and potentially threatening its ability to pay the large dividends that it is promising investors.

The aerial attacks on Aramco facilities in September highlighted to potential investors the geopolitical risks of operating in the Persian Gulf. Iran was blamed for the attack, which temporarily forced the company to cut production by more than half.

More broadly, the killing of the dissident journalist Jamal Khashoggi by Saudi agents last year has hurt the reputation of Prince Mohammed, and may repel some investors.

The money raised will probably go not to further investment in Aramco but to the Public Investment Fund, a sovereign wealth fund that has become the crown prince’s main vehicle for reshaping the Saudi economy. The fund has been investing in technology companies like Uber, and it is also backing large real estate programs in the kingdom in an effort to attract tourists and new businesses.

Despite the frustrations of a process interrupted by stops and starts, Aramco has had little trouble recruiting some of the world’s major financial institutions to help sell its stock. Citigroup, JPMorgan, Goldman Sachs, HSBC and Morgan Stanley are all listed as financial advisers in the offer documents.

They are attracted by the potential fees and the possibility that Aramco will eventually expand the listing to an international exchange like New York or London. But there is also expected to be a strong flow of Saudi debt offerings and other transactions — more sources of revenue for Wall Street.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Aramco’s I.P.O. Will Be Less Gigantic Than Promised

Westlake Legal Group 00aramco-1-facebookJumbo Aramco’s I.P.O. Will Be Less Gigantic Than Promised Stocks and Bonds Saudi Stock Exchange (Tadawul) Saudi Aramco Saudi Arabia Oil (Petroleum) and Gasoline Mohammed bin Salman (1985- ) Initial Public Offerings

When Mohammed bin Salman announced in 2016 that he would list one of his country’s crown jewels — the state-owned oil giant Saudi Aramco — on the stock market, he set some audacious goals.

Aramco would be valued at about $2 trillion, easily making it the world’s biggest publicly traded company. Even though the stock sale was bound to be enormously complex, he said it could take place by 2018. And the riches that the offering would generate would help Saudi Arabia wean itself off oil.

Over three years later, Prince Mohammed’s goal finally appears within reach — but in a much smaller, humbler form than first promised. It will probably be valued at a far lower price.

Saudi Arabia is expected to announce within a few weeks that it will formally take Aramco public, selling up to 3 percent of the company’s shares in an initial public offering. It would do so only two months after a devastating assault on two of the company’s key facilities that temporarily suppressed its oil production.

The stock sale will surely be one of the main talking points at the third annual Future Investment Initiative, the conference the Saudi government will host in Riyadh starting Tuesday for corporate moguls and senior government officials from around the world.

But bankers on the transaction have told Prince Mohammed, Saudi Arabia’s 34-year-old crown prince and de facto ruler, that prospective investors would probably value the oil producer at about $1.5 trillion, according to people with knowledge of the matter who spoke on condition of anonymity to describe private conversations.

Though stock exchanges in New York, Hong Kong and London aggressively courted Aramco, the oil company appears fated for now to trade on the much lesser-known stock exchange of its home country, the Tadawul. And Saudi Arabia remains as dependent on its oceans of oil as ever.

It was perhaps inevitable that pulling off the biggest I.P.O. in history would be a long and difficult task. But in the case of Aramco, the yearslong process has faced difficulties in the financial and geopolitical worlds, forcing Prince Mohammed to whittle his ambitions significantly.

The Saudi government has already had to postpone the offering several times, including last year, when it directed Aramco to buy control of a Saudi petrochemical producer, and earlier this month, when it decided to delay announcing the offering by several weeks to incorporate the oil company’s third-quarter financial report, according to the people with knowledge of the matter.

It is still possible that the government could change its mind and delay the offering again, these people added.

Even at $1.5 trillion, Saudi Aramco would be a colossus on global stock markets, with a capitalization far exceeding that of all its major petroleum rivals combined.

Formally known as the Saudi Arabian Oil Company, Aramco was founded in 1933 through an agreement between Saudi Arabia and Standard Oil, and it is widely regarded as a professional, well-run operation.

Its huge resources and scale — it earned $46.9 billion in the first half of the year are and produced 10 million barrels a day — have given it unmatched financial and production advantages. That could give it a leg up on rivals like Exxon Mobil and Royal Dutch Shell with investors.

“There really is a limited pool of capital available for oil and gas equity investments, and there is a chance that Aramco is going to suck some of that up,” said Ben Cahill, research director at Energy Intelligence, a research firm.

Its market debut will still yield billions of dollars, money that Prince Mohammed plans to use to pay for an expansive economic overhaul of the kingdom.

Aramco has already drawn in some private investors and sold $12 billion in bonds this spring amid heavier-than-expected demand.

Yet Aramco’s initial offering, if it finally happened, would take place as climate concerns raise doubts about the future of fossil fuels. Those worries could depress Aramco’s ultimate valuation, analysts say.

For instance, the Singaporean sovereign wealth fund, Temasek, has said that it would not invest in industries dealing with fossil fuels, potentially ruling out an important and respected investor as a participant in an Aramco offering.

The offering would also take place in the shadow of the killing and dismemberment of the Saudi dissident and journalist Jamal Khashoggi by Saudi agents last year. Prince Mohammed recently accepted responsibility for Mr. Khashoggi’s murder, but denied ordering it.

That may not matter as much: Western businesses that had been eager to play down their ties to the Saudi government immediately after the killing quietly resumed business with the kingdom months later. And top government officials like the Treasury secretary, Steven Mnuchin, and executives in the business world like Stephen A. Schwarzman, the chief executive of Blackstone, and John Waldron, the president of Goldman Sachs, plan to attend the Saudi investment conference this week.

Over the past several years, the Saudi government and its army of advisers have toiled to solve many of the potential roadblocks to a successful public offering. Bankers have flown frequently to Aramco’s offices over the years to prepare the company for scrutiny from analysts and investors that comes with being a public company.

Research analysts were flown to Saudi Arabia in late September to be briefed on Aramco’s operations and attend a luncheon with top managers, including the company’s chief executive, Amin Nasser.

The kingdom has also been making changes. It recently made it easier for foreign nonfinancial investors to take stakes in locally listed companies, for example. And this summer, the financial data company MSCI added the Tadawul exchange to its Emerging Markets Index, increasing the flow of overseas money into Saudi stocks.

Last month, the Saudi government replaced Aramco’s chairman of four years, Khalid al-Falih, with Yasir al-Rumayyan, the head of the country’s Public Investment Fund. Mr. al-Rumayyan is a close ally of Prince Mohammed.

And recently, Saudi Arabia has pledged to pay shareholders in Aramco an annual dividend of $75 billion, in a bid to make the company as attractive as possible.

A valuation of $1.5 trillion would give investors a yield of about 5 percent, according to calculations by Energy Intelligence. By comparison, Exxon Mobil, the largest American oil company, now pays a yield of about 4.1 percent, while Shell pays 6.4 percent.

One unforeseen and urgent matter for Aramco’s management team is convincing prospective investors that company engineers have quickly restored production and exports after the that aerial attacks last month temporarily knocked out about half of its production.

Aramco engineers “really know the plants,” said Sadad Al-Husseini, a former Aramco executive vice president. “They know all the valves and pipes and vessels,” he added.

But while the physical damage may have been patched up, the attacks raised a troubling question: How vulnerable are the torrents of oil pulsing through Aramco’s facilities given the growing political tensions between Saudi Arabia and its neighbors, particularly Iran?

“We believe that there is a risk of further attacks on Saudi Arabia, which could result in economic damage,” Fitch Ratings wrote in a research note in which it downgraded Saudi Arabia’s credit rating to A, from A+.

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No, Mike Pompeo didn’t say we’re prepared to take military action against Turkey if need be

Westlake Legal Group mp No, Mike Pompeo didn’t say we’re prepared to take military action against Turkey if need be Turkey The Blog Saudi Arabia military Mike Pompeo Iran CNBC action

As I write this at 5 p.m. ET, political Twitter is in the process of being scandalized by the latest jolt to U.S. foreign policy, this time supposedly delivered by Mike Pompeo. CNBC is normally a reputable news source so you can understand why this tweet made jaws drop:

Westlake Legal Group 1-1 No, Mike Pompeo didn’t say we’re prepared to take military action against Turkey if need be Turkey The Blog Saudi Arabia military Mike Pompeo Iran CNBC action

Uh, how’s that? Turkey’s a NATO ally, buddy. And although Trump is known for changing his mind, standing aside so that Turkey can bomb our friends the Kurds and then turning around and threatening to bomb Turkey would be fickle and reckless even by Trump standards.

This is how CNBC is framing Pompeo’s comments on its website too, though:

Westlake Legal Group 2-2 No, Mike Pompeo didn’t say we’re prepared to take military action against Turkey if need be Turkey The Blog Saudi Arabia military Mike Pompeo Iran CNBC action

Thinkpieces have already been written in the past hour about the insane, NATO-shattering folly of America going to war with the Turks, all because of what Pompeo supposedly told CNBC this afternoon.

But what did he say, exactly?

“We prefer peace to war,” Pompeo told CNBC’s Wilfred Frost in a taped interview that aired on “Closing Bell” on Monday. “But in the event that kinetic action or military action is needed, you should know that President Trump is fully prepared to undertake that action.”

That’s accurate but misleading. The only way to appreciate how CNBC distorted his comments is to watch the exchange yourself, starting at 4:00 of the clip below.

It’s true that the anchor begins a long question by asking about Turkey and the sanctions the U.S. imposed after Erdogan ordered his invasion of Kurdish-held parts of northern Syria, an ally-vs-ally incursion. But he ends by referencing Iran’s attack on the Saudi oil fields, an enemy-vs-ally conflict . I think he meant to ask, very simply, what America intended to do if Erdogan resumed his offensive against the Kurds after the ceasefire notwithstanding the sanctions in place. What would be the next step taken by the White House to deter the Turks? What Pompeo heard, though, I think, was the reference to Iran and Saudi Arabia and took it as a general question about what America would be willing to do in that particular case and in the region generally to deter enemy powers. So he gave the standard diplomatic answer: We prefer peace, we choose nonviolent deterrents like sanctions first, but we never take the military option off the table.

Since the question began as a question about Turkey, though, and since it’s not crystal clear that Pompeo misunderstood it, CNBC is selling it as the Secretary of State dangling a threat of military strikes on a NATO partner. Er, he is not. In fact, if you watch the last minute or so of the clip, Pompeo reiterates that we disagree with NATO allies all the time on foreign policy (e.g., the Iran nuclear deal) but we nonetheless put aside our differences to work on matters of shared interest. Does that sound like a guy who’s ready to bomb a NATO country because they won’t call off an invasion which the president has spent the better part of a week defending, claiming that all Erdogan wants is to “clean out” Kurdish terrorists from the border area?

It’s silly to chastise the White House for things they haven’t said or done when there’s so much that they have said or done that deserves chastisement. For instance, the Pentagon is reportedly now so worried about Trump blindsiding them with orders for instant withdrawals for which the military is unprepared that they’ve begun drawing up contingency plans for a full evacuation of Afghanistan within weeks just in case the word comes down. Why not an orderly withdrawal with plenty of lead time for the Defense department to do things the right way? Because you never know what mood might strike the president on a given day. We can safely rule out a “bomb Turkey” mood striking him, though. At least anytime soon.

The post No, Mike Pompeo didn’t say we’re prepared to take military action against Turkey if need be appeared first on Hot Air.

Westlake Legal Group mp-300x159 No, Mike Pompeo didn’t say we’re prepared to take military action against Turkey if need be Turkey The Blog Saudi Arabia military Mike Pompeo Iran CNBC action   Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com