Nov. 17 (UPI) -- Saudi Arabia's Aramco is planning to sell a 1.5 percent stake in an initial public offering, placing the value of the oil giant of $1.6 trillion to $1.7 trillion.
The company announced Sunday it was planning to sell about 3 billion shares at a price of $8 to $8.53.
Originally, the kingdom had targeted the valuation of the company at $2 trillion but it still is the most profitable company in the world. That dwarfs the roughly $1 trillion valuations of Apple and Microsoft.
Among the top two U.S. oil companies, Exxon Mobil has a market cap of nearly $300 billion and Chevron is at about $229 billion. Aramco has partnership deals with several companies.
The Aramco share sale of around $24 billion to $25.6 billion could beat the previous IPO offering. Chine'a e-commerce firm Alibaba raised $25 billion in its debut on the New York Stock Exchange in 2014.
The Kingdom is selling shares in Aramco for the first time in an effort to raise cash to reduce its budget deficit and diversify from a reliance on oil. The oil and gas sector is half the country's gross domestic product and about 70 percent of its export earnings.
The company has been suffering economically because of diminished oil prices -- a barrel of Brent crude is currently priced near $63. That's about about $20 lower than the government wants.
The public offering of Aramco, which is officially known as Saudi Arabian Oil Co., is part of the kingdom's "Saudi Vision 2030" economic reform plans.
Saudi Arabia owns about 18 percent of the world's proven petroleum reserves: 260 billion barrels. And the kingdom is the world's largest exporter of crude.
In the first half of the 2019 financial year, Aramco made $68.2 billion profit.
The price for the shares will be set on Dec. 5 and trading on the Saudi stock exchange, known as Tadawul, expected to start later that month, according to Aramco's prospectus. The company doesn't plan to list shares on the New York Stock Exchange.
Zachary Cefaratti, CEO of Saudi fund manager Dalma Capital, told CNBC on Sunday he was planning to subscribe to the IPO in two funds it manages. He added the valuation was in line with estimates.
"Aramco will have a sizable weight of nearly 10% in the Saudi local market index based the current price range and stake, and Saudi Arabia's weight in the MSCI Emerging Markets index will also increase as a result."
Four years ago, Crown Prince Mohammed suggested selling a stake in the Saudi state crown jewel, with plans to list up to 5 percent of the company on the Tadawul and on one or more foreign stock exchanges.
On Sept. 14, a drone attack on two Saudi Aramco plants shut down half its oil output . The temporary shutdown caused a loss of about 5 million barrels of oil a day, roughly 5 percent of the world's daily production of crude oil.