not all analysts knock out an opinion piece over the morning...

not all analysts knock out an opinion piece over the morning muesli, paid for by the word.
some opinions carry weight.
Saudi Aramco plans London listing but doubts grow on $2.5 trillion claim

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copyright link/business/2016/05/08/saudi-aramco-plans-london-listing-but-doubts-grow-on-25-trillion/

excerpt from article

The IPO is being handled by JP Morgan and banker Michael Klein. They may have trouble finding buyers at nose-bleed prices, given investor aversion to state companies embroiled in politics, and exploited as cash cows. Russia, for instance, earned far less from Rosneft than it hoped.
Aramco funds the Saudi state, paying for a sprawling bureaucracy and a cradle-to-grave welfare system that keeps a lid on dissent. It also funds the prince’s military ambitions and a war in Yemen. Saudi defence spending was the world’s third highest last year.
Robin Mills from Qamar Energy said the market value of Aramco is probably just $250bn to $400bn, given that the state creams off a royalty rate of 20pc and tax of 85pc. Saudi officials insist that a fair deal could be found for shareholder dividends, even though the Saudi constitution stipulates that Aramco's 260bn barrels of estimated reserves belong to the kingdom.
In a sense, any purchase of Aramco is an option play on a future oil boom. At current prices there would be no money for dividends: the Saudi state is consuming all the revenue, and burning through more than $100bn a year in foreign exchange.

The vast Ghawar field –with capacity of 5m barrels a day – dates back to the 1940s, with no major finds in the kingdom since the 1960s. Yet declared reserves have been strangely stable for decades.
Aramco says its wells are depleting at a rate of 2pc a year, lower than the IHS CERA estimate of 4.5pc for fields around the world. It estimates that the Ghawar field is 48pc depleted, yet it is progressing from using seawater to flush out crude to more costly methods of enhanced oil recovery.
It has already begun CO2 injections at Uthmaniyah in south Ghawar, aiming to boost recovery by 10-15 percentage points. There is no doubt that the Aramco can extract far more oil as the technology improves. The question is at what price.
Soft sceptics say the break-even cost of Saudi output is rising fast, changing the calculus of value. Hard sceptics suspect Riyadh wants to off-load “stranded assets” of the future before it is too late.
What is clear is that the days of $2 oil in Saudi Arabia will never be seen again.


looks like the saudis have no choice but to pump up the volume to keep market share,
and keep their cradle to the grave welfare citizens happy.