The argument to be a buyer of the Saudi Aramco IPO

The argument to be a buyer of the Saudi Aramco IPO:

"Like cats transfixed by a pigeon, the world’s bankers are quivering in anticipation of next year’s initial public offering by Saudi Aramco, the state oil group. Once-strict regulators are finding exceptions to rules, lawyers are straining to magic away litigation risk, and giant real-money investors are being cajoled into orderly queues.

Many problems can be waved away for the opportunity to participate in “The IPO” as it is referred to on Wall Street. The fees on a ticket of maybe $75bn . . . no wonder they are focused. There is just one question from investors, though: what about shale? Do the US producers continue to depress oil and gas prices?

Let me answer the question with another question. Is the shale industry still competitive thanks to technology, or thanks to quantitative easing? Americans tend to say that rising “unconventional” hydrocarbon production is all about superior science and engineering. International oil people believe the shale people are the spoiled children of the Federal Reserve, the US central bank, and overindulgent investors."



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