A view shows Saudi Aramco's Wasit Gas Plant, Saudi Arabia, December 8, 2014. Saudi Aramco/Handout via REUTERS
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When oil giant Saudi ARAMCO discloses its financials for the first time next year, it must either surprise investors with world record profits or reduce its aspirations for a $2 trillion valuation in its initial public offering.Most other metrics for the world's largest oil producing company are simply not known and will not be disclosed until ARAMCO publishes financial results before the planned IPO in 2018 .If ARAMCO matched that same high ratio, its core earnings would need to be around $130 billion to achieve its target valuation.ARAMCO would not be drawn when asked to comment on how it would achieve the $2 trillion figure.The source said it was misleading to compare ARAMCO with Exxon, which has less than half the Saudi firm's oil output and not even a 10th of its reserves.Nevertheless, ARAMCO would do well to secure Exxon's high ratios. Exxon by comparison has less than half ARAMCO's output – with oil-equivalent production of 4 million bpd in 2016, while the U.S. firm's reserves are a fraction of ARAMCO's – with proved oil-equivalent reserves of about 20 billion barrels.
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