RIYADH – Lured by a long-looming stock offering of Saudi Arabia's massive state-run oil company, investors and business leaders have returned to the kingdom's capital for an investment forum that was overshadowed last year by the assassination of Washington Post columnist Jamal Khashoggi.
Yet drawing big names to the Future Investment Initiative alone does not mean Crown Prince Mohammed bin Salman's dream of having Saudi Aramco offer a sliver of itself at a $2 trillion valuation will become a reality.
King Salman's son needs to raise $100 billion required to fund his ambitious development plans for a kingdom desperate to offer jobs to its 34 million people as unemployment remains above 10%.
Stagnant global energy prices and a Sept. 14 attack on the heart of Aramco already spooked some. One ratings company downgraded the oil giant. Meanwhile, questions persist over how the initial public offering will be handled even as Saudi Aramco offers sweeteners and promises of an estimated $75 billion dividend next year.
"Tepid oil prices, the fraught politics of the Middle East and the demonization of fossil fuel producers in response to climate change fears have all made the initial public offering a mission impossible," wrote Roberto Sifon-Arevalo of the ratings agency Standard & Poor's.
The Future Investment Initiative, which begins on Tuesday, will draw 6,000 people and international firms to Riyadh for a forum that's the brainchild of the 34-year-old Prince Mohammed. Already, the forum announced Dow Chemicals, HSBC, Samsung and other global firms will be partners to the event.
Heads of state also will attend, with Indian Prime Minister Narendra Modi and Jordan's King Abdullah II both scheduled to speak Tuesday. Also scheduled is Jared Kushner, U.S. President Donald Trump's son-in-law and a White House adviser.
It again will be held in part at Riyadh's Ritz-Carlton Hotel, which served as a detention facility during a 2017 purge targeting businessmen, princes and others. Described at the time as an anti-corruption campaign, the arrests targeted wealthy potential challengers to the prince and cemented his grip on power amid allegations of torture denied by the kingdom. Authorities later said it saw the government recoup over $100 billion.
However, there will be big names not taking part. Among them is Jeff Bezos, the CEO of Amazon and the owner of the Post, who had been in negotiations to open data centers in the kingdom before the killing and dismemberment of Khashoggi at the Saudi Consulate in Istanbul, the Post reported Monday.
Khashoggi's death cast a pall over last year's forum, which saw Prince Mohammed give a fiery speech in which he described the killing as "a heinous act that is unjustifiable." However, U.S. officials and a recent United Nations' special rapporteur report suspect Prince Mohammed had a role in the slaying as members of the team of assassins sent to kill Khashoggi had links to the prince.
"It inconceivable that an operation of this scale could be implemented without the crown prince being aware, at a minimum, that some sort of mission of a criminal nature, directed at Mr. Khashoggi, was being launched," the U.N. report read.
Investors appear poised to move beyond the columnist's killing for one major reason: The long-discussed initial public offering of Saudi Aramco. The firm, formally known as the Saudi Arabian Oil Co., was founded in 1933 with America's Standard Oil. By 1980, the kingdom owned 100% of the firm, which runs like a Western-style firm and refers to the government as its sole "shareholder" in its corporate documents.
The Aramco IPO has been pitched by Prince Mohammed since 2016 as a means to generate cash to fund development in the kingdom. Aramco's scale remains impressive, able to pump 10 million barrels of crude oil a day, some 10% of daily global oil demand. In its first-ever half-year results, it reported income of $46.8 billion. Yet analysts say a $2 trillion valuation — Apple and Microsoft separately for instance are $1 trillion — may be a stretch.
Yet questions remain about Saudi Aramco, such as the health and the size of its oil reserves, something held as a state secret by the kingdom.
"Publicly traded oil companies faced financial disclosure regulations that required them to make information about the size and the health of their oil reserves public," wrote Aramco expert Ellen R. Wald in her recent book "Saudi, Inc." ''Saudi Aramco had no such requirement and released only the information it chose."
The global business press also frantically following each step of the IPO has raised repeated questions over its constant delays. It appears like the kingdom is preparing to offer a first part of the IPO on the local Tadawul stock exchange. The firm's ties to the kingdom also have raised questions about whether it would take the risk of listing in the West, where it could be targeted by lawsuits.
Saudi Aramco has sought to assure investors. A presentation posted to Aramco's website this month announced the intent to offer a $75 billion dividend for investors in 2020. That's the payment per share that a corporation distributes to its stockholders as their return on the money they have invested in its stock.
It also pledged that some 2020 through 2024, any year with a dividend under $75 billion would see "non-government shareholders" prioritized to get paid.
But beyond the stocks, worries persist that Saudi Arabia could be hit by another attack like the one Sept. 14, which the U.S. blames on Iran. Iran denies it launched the cruise missiles and drones used in the attack. Yemen's Houthi rebels claimed responsibility, but analysts say the weapons used wouldn't have the range to reach their targets.
Yet worries about the firm are nothing new. Even as far back as 1953, when Aramco still was held by American oil firms, then-U.S. Ambassador Raymond Hare linked the company's success to the kingdom's own.
"A strong Aramco meant a strong Saudi Arabia and a weakened Aramco a weakened Saudi Arabia," he once told the kingdom's first ruler.
Follow Jon Gambrell on Twitter at www.twitter.com/jongambrellAP .