Two trillion U.S. dollars is the Kingdom’s ambition in valuing its national company, after transforming it from an oil and gas company into an energy company through a new strategy and structure in 2018, as a preparatory step toward offering 5% of the company’s shares to investors for 100 billion U.S. dollars.

In the first quarter of the current year, the energy consultancy Wood Mackenzie valued the national company, Aramco, at 400 billion dollars. Its valuation was based on certain internal information, in addition to quick calculations of tangible assets, concession rights, total reserves, expectations for oil prices and operating costs, corporate income tax, and comparisons with global indicators for the oil and gas sector.

This valuation, whose main points were published by Bloomberg, opened a new angle for discussion centered on the divergence in the valuation of the national company, Aramco. The question is this: can the Kingdom’s economic administration raise the company’s value to two trillion dollars within a single year, if Wood Mackenzie’s valuation is correct? There is no doubt that the answer is clear according to economic logic. The other question is this: can Wood Mackenzie’s valuation of the company be considered correct if the Kingdom’s economic administration is in fact able to raise its value to two trillion dollars within a single year? There is likewise no doubt that the answer is equally clear according to the same logic.

Wood Mackenzie valued the national company, Aramco, as though it were any ordinary company operating in the oil and gas sector. It did not address its future intangible assets, such as the power of the largest shareholder after the listing — the Saudi sovereign wealth fund — to influence OPEC decisions and decisions related to market shares. Nor did it address the seriousness of Aramco’s willingness to submit to strict corporate governance rules that would limit decisions serving the interests of the largest shareholder while conflicting with the interests of minority investors in the listed 5%.

There is no doubt that the factors on which Wood Mackenzie relied created value for the company. Yet the value of intangible assets must also be considered as a factor in that valuation, so that the company’s true value appears from the investor’s perspective. If Aramco were to state that it would not be subject to any corporate governance rules, then investors would naturally feel exposed to severe risk, causing the company’s valuation to decline from their perspective. The reverse is equally true.

No entity can properly value Aramco until the company publishes all its internal tables, operating mechanisms, strategy, the sectors it intends to serve, the seriousness and firmness of its engagement with corporate governance, and the extent to which the largest shareholder is committed to using its resources to enhance the company’s future value. At that point, demand for the listed 5% will determine the company’s true value — and, as the saying goes, “what is in the pot will be brought out by the ladle.”

How does company valuation and strategic governance affect the Gulf?

Its effect appears in how costs, incentives, and resources are managed, and in the Gulf's ability to turn decisions into sustainable value. The direct context is aramco’s valuation debate, arguing that governance, strategic influence, and investor demand matter beyond asset-based estimates.

What is the most important question when dealing with investment disclosure?

Disclosure builds trust because it reduces uncertainty and makes risk pricing closer to analysis than guesswork. Through the angle of trust, the result appears not only in declared language, but in the policy’s ability to change incentives and outcomes.

What is the most important question when dealing with valuation figures?

A valuation figure compresses many assumptions and is not enough alone; sound judgment reads risk, debt, disclosure, and growth first. Through the angle of trust, the result appears not only in declared language, but in the policy’s ability to change incentives and outcomes.

What is the most important question when dealing with company valuation?

Company valuation requires reading assets and profits alongside governance, risk, and the ability to generate future cash flows. Through the angle of trust, the result appears not only in declared language, but in the policy’s ability to change incentives and outcomes.