Russian pension funds may invest in Aramco IPO: report

Russian pension funds are looking to invest in state-owned Saudi Aramco’s initial public offering (IPO), Reuters reported, citing Kirill Dmitriev, head of the Russia Direct Investment Fund.

“We see great interest in the Aramco IPO from Russian pension funds as well as from our Chinese partners,” Dmitriev told Reuters, without revealing the names and amount to be invested by pension funds.

“Russia already has significant positions in the oil business so it is hard to expect us taking a very significant stake during the IPO,” he added, speaking on the sidelines of the World Economic Forum in Davos.

Last week, Aramco chief executive Amin Nasser said the listing is likely to take place in the second half of 2018, but no decision has yet been taken on the listing venue.

Saudi Arabia plans to list up to 5 percent of the world’s largest oil producer on its domestic stock exchange (Tadawul), in addition to one or more international venues in a listing that could raise $100 billion.

Several international bourses are vying for the mega IPO, including New York, London, Hong Kong, Tokyo, and Toronto.

Meanwhile, Dmitriev noted that extending cooperation between OPEC and non-OPEC oi producers would be “very useful for the market.”

“It has proven its efficiency, when we were targeting balancing supply and demand rather than targeting a particular oil price,” he told the agency.

OPEC and non-OPEC nations have agreed to cut oil output by 1.8 million barrels per day, or around 2 percent of global production throughout 2017 and 2018. The deal has helped oil prices to double from their 2016 lows to around $70 a barrel.

On Sunday, Saudi Arabia’s energy minister Khalid Al-Falih said there was a need to discuss “longer cooperation” on the OPEC-led production agreement signed, hinting the "deal could extend beyond 2018".