Environmental Groups Oppose Aramco IPO Citing More Climate Damage

Environmental groups are against the launch of the one of the largest ever Initial Public Offering (IPO) from Saudi Aramco because they believe it would be very detrimental for the environment and is urging big banks to stay away from it even though the Wall Street and investors are closely watching and eagerly awaiting the listing of a part of the largest oil exporter of the world.

The launch of the IPO by Aramco will allow it to raise billions of dollars through the IPO, which has been delayed several times, and it can then use the money to further worsen the climate crisis, said the environmental activists in a letter opposing the IPO and urging banks like Goldman Sachs, JPMorgan Chase and other leading investment banks to stay away from the IPO.

“The world is watching — and the more bank financing of fossil fuels increases, the more public outrage will grow,” the Sierra Club, Rainforest Action Network, Friends of the Earth and other activist groups wrote.

The letter was sent to the banks on Thursday before the emergence of the news that the proposed IPO from Aramco had been delayed or postponed once again so that the investors are allowed more time to understand the actual situation of the company after the attacks its oil facilities last month.

While pointing out the brutal murder of Washington Post columnist Jamal Khashoggi, the “horrendous human rights record” of Saudi Arabia was also cited by the environmental groups.

Analysts believe that it is highly unlikely that any of the banks will decide to back away from the deal because being a part of the IPO, which is estimated to be valued at a record breaking $40 billion, will bring in serious money in the form of fees to the investment banks as well as significantly enhance their portfolios.

Despite this, the opposition being exhibited by the environmental groups is yet another thorn in the flesh for Aramco in its path to launching the IPO. There have been rising concerns about the resultant output power of Aramco after the sudden and devastating attack on two of its oil refining facilities in Saudi Arabia in September as well as rising skepticism about the actual valuation of the company that it is striving to achieve at the IPO. And still there are some investors who are unwilling to invest more money into fossil fuels. According to The Wall Street Journal, this reason prompted Singapore’s Temasek Holdings to stay away from investing in the Aramco IPO.

Copies of the letter from the environmental groups were sent to the CEOs of the seven big banks who are reportedly working closely with the Aramco IPO and include Bank of America, Goldman Sachs, JPMorgan, Citigroup, Credit Suisse, Morgan Stanley and HSBC.

There have been no comments on the issue from any of the banks in question.

On its part, Saudi Aramco said that over the tears, it has made huge investments in reducing carbon emissions from its operations.

“We are an industry leader in developing and deploying emissions-reducing technologies, partnering with public and private institutions around the world,” it said in a statement. “In order to achieve a low-carbon future, we believe it is necessary to meet both global energy demand and lower emissions. That must include responsible investments which reduce the overall carbon footprint of the oil and gas industry and end-use markets.”

(Adapted form CNN.com)

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s