Pascal’s Wager applied to Aramco float

Pascal’s Wager applied to Aramco float:

"Pascal wagered that God existed because fruitless belief was a better downside risk than damnation. By the same logic, bankers in the City and on Wall Street believe Saudi Arabia will float the Aramco oil group at a mooted worth as high as $2tn. Whatever their private doubts, they know they must behave as if the deal is on to merit a place aboard any golden syndicate.

Credible accounts from Aramco would bolster their faith. Three-year numbers would therefore be among the most hotly-anticipated pro-forma accounts in history. They should show how far the desert kingdom, not noted for its willingness to accommodate outsiders, is prepared to go to meet the expectations of foreign investors.

The numbers would need to do three things. First, they should feature a credible bottom line. Aramco’s operating costs are thought to be high. Some 93 per cent of profits are said to disappear in social charges. Second, an audited reserves estimate is required. The doctrinally-accepted figure in the oil industry is 263bn barrels."



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