According to people familiar with the matter, Saudi Arabia plans to valuate between $1.6 trillion and $1.8 trillion. Bank analysts working on the transaction gave wildly divergent estimates: Goldman Sachs Group Inc. said Aramco was worth between $1.6 trillion and $2.3 trillion to investors. Bank of America, another top bank on the offer, had only $1.2 trillion at the bottom of its scope. BNP's projection was $1.42 trillion. Despite Aramco hiring more than 20 banks at its IPO, investors have few choices for analysis that is fully independent.
Nevertheless, several groups have started to release their figures. For example, Sanford C. Bernstein & Co. said the fair value ranges from $1.2 trillion to $1.5 trillion, well below the projections made by the banks working on the IPO. To boost investor appetite, Aramco said it will pay a 20 percent income tax rate on its domestic downstream business starting next year, compared to current taxes ranging from 50 percent to 80 percent. Aramco must also deal with the acceleration of the global climate change campaign that has threatened the largest oil and gas companies in the world. Most fund managers are worried that the shift away from the internal combustion engine — a technology that has powered a century of steadily rising demand — would contribute to peak oil consumption in the next two decades.