Saudi Arabia's state-owned oil behemoth is increasingly looking to just float locally, as plans to list on an international exchange hang in the balance, Reuters reported, citing sources close to the matter.
Saudi Aramco had planned to begin trading on the country's domestic stock market — the Tadawul — and one or more foreign exchanges in the second half of 2018. London, New York and Hong Kong are among the foreign bourses currently competing for the share sale.
However, a Reuters report on Tuesday morning suggested Riyadh is now banking on being awarded emerging market status in the influential MSCI benchmark equity index in June, according to its sources. Significantly more money tracks emerging markets which should allow Aramco to attract Western funds, in addition to other flagship investors from China, Japan and South Korea.
"I would guess it is about evens that there will be no international IPO," said a high-level source familiar with the preparations, according to Reuters. The source added that the preparations were proving to be a disappointment. CNBC has not been able to independently verify these sources.
Saudi Aramco was not immediately available for comment when contacted by CNBC.
Meanwhile, on Sunday, another report said that Aramco's listing would be pushed back to 2019. The prospect of a delayed IPO would represent a significant setback for a central plank of Riyadh's plans to modernize its economy.
The Financial Times, citing British officials who had been briefed during a state visit, reported that Aramco's IPO — widely seen as the cornerstone project of the kingdom's bid to reform — is struggling to arrive at the $2 trillion valuation sought by Saudi's crown prince, Mohammed bin Salman.
Saudi Aramco, currently a private company owned by the kingdom's government, is aiming for an IPO that could raise about $100 billion and attract a valuation in the range of $1 trillion to $2 trillion.
Watch out for Hong Kong
Indecision at the highest level of Saudi Arabia's government over where to list internationally — if at all — is thought to have stoked frustration among company executives.
Saudi's Bin Salman is believed to favor a listing in New York, while officials, including Energy Minister Khalid al-Falih, reportedly favor London. Nonetheless, both the U.S. and the U.K. require greater disclosure of sensitive information on Aramco and this is viewed by Saudi officials as a pitfall, according to Reuters sources.
Therefore, with the prospect of a transatlantic listing fading, sources familiar with the matter told Reuters that Hong Kong is quickly becoming a genuine contender. This would likely help Riyadh with its efforts to draw sizable investments from several Asian nations.
Aramco said Monday that it was still reviewing its options for an IPO.
A major bourse is estimated to need at least six months to prepare for a listing, Reuters sources said, so a decision would need to be taken in April if Aramco is to go ahead with the IPO in 2018.