They were trading at that magical $2 trillion level.

They've reached the 2 trillion.

2.1 trillion.

A $2 trillion valuation.

$2 trillion IPO.

If you've come across the Aramco IPO story,

you're going to of heard the figure 2 trillion bandied about.

You gotta admit.

It's a huge number. That headline number

is stunning.

MBS has long wanted this goal,

the West had told him it was unreasonable,

and now he's achieved it.

A billion dollar startup is called a unicorn,

so what do you call a company

that's worth two thousand times that?

It'd probably help at this point to quantify

how much 2 trillion really is.

2 trillion dollars is more than most countries' annual GDP.

If Aramco were a country,

it would actually be in the top ten of global economies.

It's listing caused Saudi Arabia's market size to jump 370%

and clinch 7th position in the global rankings.

So how did Saudi's millennial prince achieve this gigantic valuation?

And how did Aramco get so big in the first place?

A vast, trackless desert.

Saudi Aramco actually started as an American company.

Roadless, almost unknown,

unmapped.

In 1933 a concession agreement was signed between

Saudi Arabia and the Standard Oil Company of California,

which is now Chevron,

to allow the Americans to start prospecting.

California-Arabian Standard Oil was born.

But it wasn't until 1938,

in Dhahran,

that they actually found enough oil to drill in commercial quantities

at Dammam Well No. 7,

which became known as "Prosperity Well."

In 1949 crude oil production had hit 500,000 barrels per day,

and the scale of the kingdom's potential riches

was becoming apparent.

Oil prices spiked at the peak of the Arab oil embargo in 1973.

With tensions growing between OPEC countries and the U.S.,

the Saudi government acquired 25% more of Aramco,

increasing its stake to 60%

making them the majority shareholder.

By 1980 it had completed its nationalization,

but the headquarters remained in Delaware.

It wasn't until ‘88 that operations were fully moved to the kingdom

and it changed its name, once again, to the Saudi Arabian Oil Company,

or Saudi Aramco.

The nationalization of Aramco

was very different to every other nationalization

that happened not only in the Middle East,

but also in Africa and Latin America.

That's Bloomberg's Chief Energy correspondent Javier Blas.

The company retained a lot of their employees.

The only thing that changed was the ownership.

But the way to run the company,

a very technocratic company where

politics were not welcome, remain.

In the late eighties,

under the leadership of its first Saudi president Ali Al-Naimi,

Saudi Aramco went from just pumping oil to doing it all.

It bought up refineries across North America and all through Asia

to control the processes involved in converting oil and gas into the finished product.

This has made it the most profitable company in the world.

While some aspects of the company were changing,

others remained the same.

Since the nationalization of Saudi Aramco

in the late '70s, early '80s,

the company was always separated

from the politics of the kingdom.

It was run by engineers.

The most precious thing was technical capability

and the government let Aramco run the company.

The rise of Prince Mohammad bin Salman changed all of that.

The Crown Prince, also known as MBS,

had a much more hands on approach when it came to Aramco.

Tell us again exactly who this prince is?

His nickname is "Mr. Everything,"

which is to say,

that he has basically been put in control of

massive swathes of Saudi Arabia.

Since Mohammed bin Salman

became the Deputy Crown Prince

and later the Crown Prince,

there has been a lot more influence

from the royal court and the royal family.

But it wasn't until 2016 when MBS announced his “Vision 2030”

that his plans for Aramco,

Saudi's crown jewel,

really became apparent.

Of course we can't not mention

the planned IPO of Saudi Aramco.

It is a dramatic change by anyone's book.

Whether he succeeds or not is something

that we're all wait and see.

The reaction to Prince Mohammed's announcement

in 2016 of the IPO,

and the wider program of economic liberalization

that is known now as Vision 2030 was received

through the world with a lot of enthusiasm.

It was a move by Saudi Arabia to try to get away from oil,

diversify income, privatize the economy,

make things more flexible, increase employment,

et cetera, et cetera.

Taking Aramco public was at the heart of MBS's push to revamp Saudi's economy,

which needs billions of dollars to develop new industries

and fund ambitious mega projects.

The biggest problem from the very beginning

of the IPO was the valuation.

Prince Mohammed announced that the company

was valued at $2 trillion.

It's more than double the valuation

of some of the largest companies in America,

and very few international investors

believe that that number was right.

Saudi Arabia has said Saudi Aramco is worth more than $2 trillion,

but does the kingdom have to settle for less?

A person familiar with IPO talks

said they've placed the figure

at less than $1 trillion.

A person in the Saudi government, 500 billion.

Wood Mackenzie, 400 billion.

But it became very clear that the $2 trillion

was not gonna work with international investors,

so they decided to take a pause.

It's the crown jewel of the kingdom's economy,

the most profitable company in the world.

But now, thanks to a string of setbacks,

the most anticipated IPO ever

has seriously been scaled back.

A United Nations report says the Crown Prince

of Saudi Arabia should be investigated

over the murder of journalist Jamal Khashoggi.

I think this ought to be a relationship altering event

for the U.S. and Saudi Arabia.

for the U.S. and Saudi Arabia. Did you order the murder of Jamal Khashoggi?

Did you order the murder of Jamal Khashoggi?

Absolutely not.

A twin attack at night with drones

on two major Saudi oil facilities,

one of them the largest in the world.

The attack cut the world's oil supply by about 5%.

No more coal. No more oil. Keep the carbon in the soil.

I would just point to the fact

that the energy sector as a percentage

of the S&P weighting is now 4.2%.

It was 16.5% 10 years ago.

This is a sector left for dead.

With a string of weighty news events stacking up,

the Saudi's and talks of the IPO went quiet,

leaving many to question if it had been put on hold permanently.

Then,

in 2019, around the summer,

Saudi Arabia got really concerned

that the price of oil was gonna drop

because of a slow down in the global economy,

the trade war between the U.S. and China,

and they decided to reaccelerate the plan

and to try to get the company again public

by the end of 2019.

They were able to do that, but they had to make some sacrifices.

The final pricing values the world's profitable

company at $1.7 trillion,

but somewhat below the kingdom's original target.

A listing in Riyadh only.

The international part of the IPO,

which has been long suggested,

isn't clear when that will happen.

Just not offering as many shares

as originally thought.

So just 1.5% of the company is being offered.

Saudi Aramco went ahead,

they did their IPO at $1.7 trillion,

and they really went and put pressure

on every wealthy family into the kingdom

to put money into the Aramco valuation.

They also pressured the banks,

the local banks,

to lend more money into the local economy

to allow citizens to buy shares with borrowed money.

And in the moment that the company went public

and the day that the trading started,

they also made sure that pension funds

and others in Saudi Arabia were buyers

on the first day.

So immediately we got to $1.8 trillion,

and then a couple of days later,

we hit $2 trillion.

Of course,

this is a historic day for a company,

this is the biggest listing in the history.

After pricing at the high end of the valuation,

the IPO raised $29.4 billion -

beating the record $25 billion raised by Alibaba in New York in 2014.

But what does the future look like for an oil titan in the age of going green?

Even Aramco who used to downplay peak oil,

cited it as a risk in its IPO prospectus.

The problem with peak oil and Saudi Aramco

is that come 2030,

there is not gonna be incremental demand for oil,

and that means that Saudi Aramco

cannot continue growing its production forever.

And that means lower revenue in the future,

potentially lower prices,

and that means also lower profits.

There is still a long way to go

before the Aramco IPO can be considered a success.

Its record-breaking listing cannot hide

the potential challenges that face the company

further down the line.

It remains to be seen if this oil titan

can truly reinvent the country's economy

and fund MBS's ambitious plans for the kingdom.