The world's most valuable company: Saudi Arabia puts $1.7 trillion price tag on its oil monopoly - CNN

In a statement Sunday, Saudi Aramco said it was aiming to sell about 1.5% of its 200 billion shares in a partial privatization for between 30 riyals ($8) and 32 riyals ($8.53) each.

That means Aramco, the most profitable company in the world, could be worth between 6 trillion riyals ($1.6 trillion) and 6.4 trillion riyals ($1.7 trillion) — making it also by far the world's most valuable company ahead of Apple (AAPL).

That won't be the only record to fall if Aramco achieves the higher price: at that level, the share sale would raise just over $25 billion, making it slightly bigger than Alibaba's (BABA) 2014 debut on the New York Stock Exchange, so far the world's biggest IPO.

Saudi Arabia is selling shares in Aramco for the first time as part of an economic diversification plan aimed at weaning the kingdom off oil.

Aramco has vast oil reserves and massive daily output. It holds a monopoly in Saudi Arabia, the world's largest exporter of crude. It made $111 billion in profit in 2018, and has promised to pay an annual dividend of $75 billion through 2024.

Crown Prince Mohammed bin Salman had reportedly sought a valuation for Aramco near $2 trillion. But low oil prices, the climate crisis and geopolitical risk have raised skepticism among international investors. Up to 0.5% of the company will be sold to individuals, with the remainder offered to institutional investors.

Aramco may need to heavily rely on rich local families, sympathetic sovereign wealth funds or major customers such as China signing up for shares. Reuters reported Sunday that Aramco will not market the IPO abroad.

The price for the shares will be set on December 5, with trading on the Saudi stock exchange expected to start later that month, according to Aramco's prospectus.

Wall Street's biggest names are advising Saudi Arabia on the privatization, despite pressure from activists who say financing fossil fuel companies will worsen the climate crisis. They have also urged banks not to do business with the kingdom because of its human rights record, including the brutal murder of Washington Post columnist Jamal Khashoggi.

Aramco listed Bank of America (BAC), Goldman Sachs (GS), JPMorgan (JPM), Citigroup (C), Credit Suisse (CS), Morgan Stanley (MS) and HSBC (HBCYF) as joint financial advisers on the transaction. They have all previously declined to comment to CNN Business.

— John Defterios and Julia Horowitz contributed to this article.

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2019-11-17 11:25:00Z
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Saudi Arabia values oil giant Aramco far below original target - Aljazeera.com

Saudi Aramco has set a price range for its listing that implies the oil giant is worth between $1.6 trillion to $1.7 trillion, below the two trillion dollars the Saudi Arabian crown prince had targeted but still making it potentially the world's biggest initial public offering.

Aramco said on Sunday it plans to sell 1.5 percent of its shares or about three billion shares, at an indicative price range of 30 riyals ($8.00) to 32 riyals ($8.53) each - valuing the IPO at as much as 96 billion riyals ($25.60bn) at the top end of the range.

More: 

If priced at the top, the deal could just beat the record-breaking $25bn raised by Chinese e-commerce giant Alibaba in its stock market debut in New York in 2014.

Aramco's float is the centrepiece of Crown Prince Mohammed bin Salman's plan to diversify the world's top crude exporter away from oil.

Aramco does not plan to market its domestic IPO abroad, three people familiar with the matter said, which suggests international roadshows will not take place.

"This will put the burden of the deal on local and regional banks," one of the three people said.

"This means most of the investors will participate as Qualified Foreign Investors in a Saudi transaction," another one of the people said.

Aramco finally kicked off its IPO on November 3 after a series of false starts. Crown Prince Mohammed, who had floated the idea of the listing four years ago, is seeking to raise billions of dollars through the deal to invest in non-oil industries and generate employment.

But the investment world is still trying to decide what the famously secretive company is worth. Analysts from banks working on the Riyadh bourse had projected a wide valuation range for Aramco of between $1.2 trillion to $2.3 trillion.

On one hand, Aramco is the world's most profitable company with a planned dividend of $75bn next year, more than five times greater than Apple's payout, which is already the biggest of any S&P 500 company.

On the other, it is a bet on the price of oil at a time when global demand is expected to slow from 2025 as measures to cut greenhouse gas emissions are rolled out and the use of electric vehicles increases.

Risky bet?

The deal is also rife with political risk, as the Saudi government - which relies on Aramco for the bulk of its funding - will continue to control the company. Prince Mohammed's reputation was tarnished by the murder of Saudi journalist Jamal Khashoggi last year.

In addition, Aramco's oil plants were targeted on September 14 in attacks which initially halved its output. The firm has said the strikes would not have a material impact on its business.

The share sale is expected to be a huge hit among Saudi citizens who are being offered 0.5 percent of the company.

Al Jazeera's Economics Editor, Abid Ali, says many of the country's billionaires, some of whom were detained by Saudi authorities in Riyadh's Ritz Carlton hotel in a 2017 anti-corruption crackdown, are likely to also be big investors when the shares are sold.

"On that level, it will be a success, because on the day that the shares will be sold, the Saudi pension funds, investment funds, will pick up any of the stock that's left over," Ali said. 

But, he says, international investors are staying away.

"There are different ways to value Saudi Aramco. There's use of the oil price, free cash flow, and dividends. And on most of these measures, the maths just did not stack up. And many international investors didn't fancy being a passenger in a car that's being driven by the Saudi authorities," he added.

Retail investors have until November 28 to sign up for the IPO while institutional investors can subscribe until December 4, with company management going on marketing roadshows this week.

The Aramco listing means a year-end rush for equity markets with Alibaba currently taking orders for a Hong Kong listing that is expected to raise up to $13.4bn for the online retailer.

The Riyadh listing comes after initial hopes for a five percent IPO on the domestic and international bourses were dashed last year amid debate over-valuation and where to list Aramco overseas.

Aramco said the IPO timetable was delayed because it began a process to acquire a 70 percent stake in petrochemicals maker Saudi Basic Industries Corp.

SOURCE: Al Jazeera and news agencies

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2019-11-17 09:49:00Z
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BREAKING: 1600 to be laid off at CN Rail due to weakening economy - The Post Millennial

Shortly after Don Cherry’s comments emerged and the leftist elites started ginning up controversy about it, I pointed out that the vast silent majority of Canadians agree with the sentiments Cherry was expressing.

Cherry himself pointed that out himself when he spoke to some of the media following his firing.

And it became very clear how much support Cherry had as social media exploded with expressions of backing for Cherry, and outrage towards his totally unjustified firing.

Yet, that explosion was also matched by the massive nationwide outrage towards Jess Allen of The Social, who made clearly bigoted remarks about hockey fans and players being “white boys” who “weren’t very nice.”

Then, instead of doing the right thing and firing Allen, CTV made clear that she would stay in her job, even as the family of a Humboldt Broncos crash survivor said they would boycott the network.

Allen even doubled down, refusing to retract her comments.

For a long-time, patriotic Canadians have been saying there is a double-standard, where anyone who upsets the tiny (but loud) far-left outrage mob gets silenced and cancelled, while those who attack the very foundation of Canada (like insulting hockey, accusing Canada of genocide, denigrating Canadian patriotism), get to stay in their jobs and even get rewarded.

Some dismissed complaints of a double-standard as the usual partisan disagreements, and the silent majority remained silent.

But now, it’s clear something is happening in this country.

The silent majority is waking up and speaking up.

In the last few days, the reaction to Jess Allen’s comments has been unlike anything seen before in this country. Canadians of all backgrounds have finally had enough of the corrupt elites tearing down everything we love about Canada, and regular Canadians are pushing back like never before.

This has the feeling of a lasting change, with millions of Canadians really seeing for the first time how deeply corrupted and biased the establishment press has become.

We have seen that those in power in the media will listen to a tiny politically-correct outrage mob and fire Don Cherry, yet won’t listen to millions of hockey fans, hockey families, and patriotic Canadians when we demand that Allen be fired.

The hypocrisy and double standard are undeniable.

Now, there is no going back.

With the elites exposed like never before, with the anti-Canadian agenda and rhetoric of the far-left no longer even hidden behind any kind of pretense, Canada is descending into a full-blown culture war.

And that’s exactly what the far-left fears the most because until now, the culture war was one-sided, with only the left fighting and winning over and over again.

Now, the tables have turned, and it’s a real battle for the soul of our country.

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November 16, 2019 at 07:50AM

City reacts to Aurora Cannabis announcement - CHAT News Today

“I’ve been talking a lot about Aurora around Medicine Hat since April of 2018 and celebrating the fact that they came here, chose us over Quebec or anywhere else in Canada they could have gone, and what a great thing it is for the community and the jobs and just the optimism,” he said. “I’ve sensed an increase of optimism in the community.

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“When I heard this news yesterday, it was a setback, and I’m disappointed. They’re a private company, this has nothing to do with the City of Medicine Hat. They’re free to make any decision they need to make.”

In its report, Aurora cited lower than expected revenue from cannabis as a reason for the decision.

The decision about the construction will save Aurora a total of $190 million dollars.

Lisa Kowalchuk, executive director of the Medicine Hat and District Chamber of Commerce, says she believes Aurora remains committed to Medicine Hat.

“Aurora has very much been committed to our community and very invested in our community,” she said. “They re very engaged within our community and with our chamber. So I don’t see them going away anytime soon.”

CHAT News attempted to speak with Aurora Cannabis on Friday, but were instead provided a statement, which clarified its position from Thursday.

“There has been no halt to construction at the facility,” wrote Michelle Lefler, VP Communications at Aurora, on Friday. “We are continuing to build with adjusted timelines that are more closely aligned with how cannabis markets develop.

The statement continues, “We expect to have at least six flower rooms completed and in operation in 2020, for a total of 238,000 square feet, which includes the mother room. As was done with Aurora Sky and is the case with all Sky-Class facilities, we will pursue a phased approach to bringing additional grow rooms online, and still intend to build 30 grow rooms at Sun.”

“Additional operations at the facility will be activated as global demand develops, with a target date for full operations in 2021. Previously, we had intended to build at an accelerated speed. This is a more normalized pace for a project of this size and is aligned with how markets are growing.”

The company adds they remain committed to investment in Medicine Hat, and still intends to hire around 800 people to work at the facility once its completed.

Clugston adds he remains optimistic about the facility being completed.

We remain committed to investment in the Medicine Hat community as planned. At this time, we still intend to hire a final staff complement of around 800 people upon facility completion. We want to make sure that all local and government partners continue to work with us to support our commitments to significant investment in Alberta’s economy.

“As an optimist, they’ve shown interest and invested obviously a lot of money in the facility, and I really do hope and believe that it will be up and running at 100 per cent,” he said.

Clugston says council will meet with Aurora executives in a closed-door session prior to Monday’s city council meeting. He adds the meeting was planned before Thursday’s announcement.

by Charles Lefebvre

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November 16, 2019 at 07:31AM

Oil Markets Ignore Worrying OPEC Projections - OilPrice.com

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Friday, November 15th, 2019

It was a big week for oil market data and projections this week, with both OPEC and the IEA releasing some key reports for the industry. Despite this influx of new data, oil is set to close out the week little changed from a week earlier. It was a relatively quiet week in terms of volatility, with the U.S.-China trade war maintaining its firm grip over oil markets.

IEA: OPEC faces “major challenge” in 2020. Weak demand and rising non-OPEC supply presents a “major challenge” to OPEC next year, according to a new report from the IEA. The agency said that non-OPEC supply could grow by 2.3 mb/d in 2020, higher than the 1.8 mb/d this year. As a result, demand for OPEC’s oil will decline by around 1 mb/d. “The hefty supply cushion that is likely to build up during the first half of next year will offer cold comfort to OPEC+ ministers gathering in Vienna at the start of next month,” it added.

European Investment bank ends lending to fossil fuels. The European Investment Bank announced on Thursday plans to end financing for fossil fuel projects around the world, a decision that will take effect in 2021. In the interim, only projects currently in the works will go forward. Instead, the EIB said it would unlock 1 trillion euros ($1.1 trillion) for climate change action. “We will stop financing fossil fuels and we will launch the most ambitious climate investment strategy of any public financial institution anywhere,” said EIB President Werner Hoyer. The EIB is the world’s largest multilateral lender.

Minnesota AG joins lawsuit to shut down Line 5. Minnesota’s Attorney General, Keith Ellison, has joined a lawsuit in Michigan to shut down Enbridge’s (NYSE: ENB) Line 5 pipeline.

Offshore oil to peak in 2020. Offshore oil production could hit a peak in 2020 before entering decline. After supply additions next year, a dearth of new projects go forward, according to a report from Sanford Bernstein. For investors, the opportunity is huge because there is a scenario in which industry spending falls but oil prices rise. The recent failed auction in Brazil lends some weight to the theory that the industry might stay away from future offshore spending.

Related: Icahn Urges Occidental To Start ‘’Fire Sale’’

All signs point to OPEC+ extension, not deeper cut. OPEC+ is likely to extend its production cuts through the end of 2020 at the upcoming meeting in Vienna, rather than deepening the cuts. “There is always a risk that if we cut deeper and prices rise, those [U.S.] companies could change their plans to hike production,” a Gulf OPEC delegate told the Wall Street Journal. “OPEC would ensure that won’t happen.”

Carl Icahn wants Occidental to sell assets. Famed activist investor Carl Icahn is pressuring Occidental Petroleum (NYSE: OXY) to sell some of its assets after the $38 billion takeover of Anadarko Petroleum.

Tullow Oil plunges on poor outlook in Guyana. Tullow Oil (LON: TLW) saw its share price nosedive by 27 percent this week after it said it is reassessing the commercial viability of its oil discoveries in Guyana. The oil has a high sulfur content, the company said. “We expect investors to worry about the projects’ value,” Al Stanton, an analyst at at RBC Europe Ltd., said in a note. Hess (NYSE: HES), which also has a lot on the line in Guyana, fell by nearly 5 percent after Tullow’s announcement.

IEA: Oil demand to peak in 2030s, but not emissions. The IEA released its highly-anticipated annual World Energy Outlook this week, complete with forecasts to 2040. The agency said that oil demand will likely plateau in the 2030s, but emissions are still on track to rise through 2040. The IEA also saw U.S. shale growing strongly through 2030, nearly doubling in output, despite the current slowdown.

Comstock Resources looks at Haynesville. Comstock Resources (NYSE: CRK) is in talks to purchase Chesapeake Energy’s (NYSE: CHK) Haynesville shale assets in a deal that could be worth as much as $1 billion.

Lithium miners hit by EV downturn. The lithium industry has hit its first major downturn as global lithium supply has surpassed demand by around 5 percent, according to Reuters. That is also the result of slowing EV sales in China as the government pares back subsidies.

IAEA: Iran resumes uranium enrichment. The IAEA said in a report this week that Iran has resumed uranium enrichment at its underground Fordow plant. In the first signs of a crack, some European diplomats raised the prospect of a return of sanctions on Iran.

Callon Petroleum reduces bid for Carrizo. Callon Petroleum (NYSE: CPE) sharply cut its offer for Carrizo Oil & Gas (NASDAQ: CRZO), reducing its bid to $723 million from $1.2 billion in July. Related: The EIA Is Grossly Overestimating U.S. Shale

Daimler to cut 1 billion in personnel. Daimler plans to cut 1.4 billion euros in personnel costs and warned that the push for EVs will cut into profits. “The industry is in transformation,” chief executive Ola Källenius told investors in London. “We have to do this.” Tighter European standards on the transportation sector take effect in 2020.

Forecasts for U.S. shale diverge. Forecasts for U.S. shale growth have diverged widely, with several investment banks drastically cutting supply growth forecasts while the main agencies – the IEA, EIA and OPEC – still maintain growth projections of 1 mb/d or more. A lot hinges on who is closer to the mark.

ProPetro under investigation by SEC. Oilfield services company ProPetro (NYSE: PUMP) confirmed that it is under investigation by the SEC for irregular financial disclosures.

Aramco IPO threatens OPEC. The Saudi Aramco IPO threatens OPEC because the company may be under greater pressure to go its own way in an effort to satisfy shareholders, which could make Saudi Arabia less amendable to the concerns of OPEC members.

By Tom Kool for Oilprice.com

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November 16, 2019 at 03:00AM

CN union gives Tuesday strike notice amid weekend contract talks - CBC.ca

Canadian National (CN) conductors, train persons and yard persons have given strike notice ahead of a Tuesday deadline.

The union, which represents 3,200 workers, provided the 72-hour notice Saturday as contract negotiations continue this weekend.

The Teamsters Canada Rail Conference warned in October it was prepared to launch job action after over six months of unsuccessful talks.

A strike could begin at 12:01 a.m. ET Tuesday now that the notice has been given.

The workers, mostly in major urban centres across Canada, have been without a contract since July 23.

Rob Reilly, executive vice-president and chief operating officer of CN, said in a statement the company will continue to negotiate "in good faith" over the coming days.

"If a settlement cannot be reached this weekend, we will once again encourage the union leadership to accept binding arbitration as an alternative to disrupting the Canadian economy."

The strike notice comes a day after Montreal-based CN confirmed job cuts, saying it was "adjusting its resources to demand." CN wouldn't say how many people will be affected.

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November 17, 2019 at 12:52AM

Toronto decline, Vancouver recovery leave Canadian home sales flat - BNNBloomberg.ca

Canadian housing sales took a breather as activity in Toronto pulled back, but strength in the western provinces highlights a sustained recovery at the national level.

Home sales were little changed in October after seven straight months of gains, according to data released Friday by the Canadian Real Estate Association. Toronto was a major drag, posting a 2.9 per cent decline, the biggest drop since February. Still, renewed momentum in Vancouver and Calgary were sources of strength, with sales growing 5.9 per cent and 2.1 per cent respectively. The Ottawa market continued to expand at a moderate pace, while Montreal was flat.

Residential housing has rebounded this year as borrowing costs fell and buyers adjusted to tighter mortgage rules introduced at the beginning of 2018. With markets also adapting to the impact of taxes on foreign buyers in Vancouver and Toronto, Canadian real estate activity has climbed back above its 10-year average and is contributing to economic growth.

“The solid results simply drum home the point that the housing sector has returned to the status of a growth driver, rather than the growth dimmer it had been over the past two years,” Doug Porter, chief economist at Bank of Montreal, said in a note to clients. “The related pick-up in household borrowing is a key reason that the Bank of Canada has been a bystander to the global rate-cut parade.”

Benchmark prices also continued their recovery, rising 1.8 per cent from a year earlier, with a 0.6 per cent gain on the month. Though Vancouver, Calgary and other western cities have lower prices than a year ago, central Canadian markets are tightening. Toronto’s prices are up 5.6 per cent, while Montreal’s rose 7.5 per cent. Prices in the capital city of Ottawa are up 10.3 per cent.

The sales to new listings ratio ticked up to 64 per cent, a sign markets are tilting in favour of sellers, CREA said.

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November 15, 2019 at 11:15PM