Aramco Royalties in Focus After Details Emerge

摘要

Saudi Aramco’s royalty payments are under scrutiny after it was revealed that movements in benchmark Brent oil prices,not the company’s own oil price realizations,will dictate the level of royalties paid to the Saudi government.A number of investors attending road show presentations in the US and London for Aramco’s debut $12 billion bond this week told Energy Intelligence that a key area of interest and potential concern is the company’s exposure to the state’s royalty and taxation system(IOD Apr.2’19).Changes to the tax and royalty system for Aramco were applied in 2017 in hopes of making the state oil giant more attractive to investors as it prepared for an initial public offering,which was ultimately put on hold(IOD Apr.10’19).Aramco’s tax rate was reduced to 50% from 85%,but less detail emerged about its royalty system until the bond prospectus was released.Prior to the 2017 decree,royalties on Aramco’s production were charged at a flat rate of 20% based on the company’s average oil sales price.