* Aramco plans gradual local listing - sources
* Expected to float 1% this year and 1% next year - sources
* JPMorgan, Morgan Stanley likely to get top roles - sources
* Citi, Goldman Sachs may be managers - sources
(Recasts, adds details on staggered local listing)
By Hadeel Al Sayegh, Davide Barbuscia, Marwa Rashad and
Clara Denina
DUBAI/LONDON, Sept 9 (Reuters) - Saudi Arabia plans a
gradual listing of Aramco on its domestic market, sources
familiar with the matter said on Monday, as it finalises the
roles banks will play in the initial public offering (IPO) of
the world's biggest oil company.
The kingdom intends to list 1% of the state oil giant on the
Riyadh stock exchange before the end of this year and another 1%
in 2020, the sources said, as initial steps ahead of a public
sale of around 5% of Aramco.
Based on the indicated $2 trillion valuation that Saudi
Aramco had hoped to achieve, a 1% float would be worth $20
billion, a huge milestone for the local stock market.
Aramco's flotation, which could be the world's biggest IPO,
is crucial to raise money for Crown Prince Mohammed bin Salman's
plans to diversify the Saudi economy away from oil revenues and
has rapidly regained momentum over the past few days.
Saudi Energy Minister Prince Abdulaziz bin Salman said on
Monday Saudi Arabia was aiming for the Aramco IPO "as soon as
possible", speaking on the issue for the first time since
replacing Khalid al-Falih at the ministry.
The kingdom has geared up to fast-track the IPO by bringing
in the head of Saudi Arabia's sovereign wealth fund, Yassir
al-Rumayyan, who was recently named Aramco chairman and leads an
executive committee overseeing the plans.
Aramco is finalising the list of banks that will manage the
deal, with mandates expected in the coming days, sources said.
JPMorgan, Morgan Stanley and National
Commercial Bank are expected to have lead roles and
Citi, Goldman Sachs, HSBC and Samba
Financial Bank will likely be added to the list of
banks managing the transaction, one of the sources said.
Morgan Stanley, JPMorgan and HSBC were chosen to play a
leading role before the process was halted last year.
Aramco, Goldman Sachs, HSBC, and JPMorgan declined to
comment, while Citi, Samba, Morgan Stanley and National
Commercial Bank did not respond to requests for comment.
TIMING
Should Aramco's local listing plans proceed, international
banks would be tasked with promoting it to international
investors looking to buy shares on the Saudi exchange Tadawul,
the Middle East's largest bourse.
Analysts and bankers say $1.5 trillion rather than $2
trillion is a more achievable valuation for Aramco.
The exact timing of the listing on Tadawul has not yet been
decided, the sources said, although one added that it might be
announced at a major annual investment conference in Riyadh
scheduled for the end of October.
It is also not clear yet on which international exchange
Aramco would list, but sources have told Reuters the board had
determined that listing in New York would carry too many legal
risks to make it a realistic option.
Aramco raised $12 billion this year in its first
international bond, gaining more than $100 billion in demand.
Many saw that deal as a pre-IPO relationship-building
exercise with international investors after repeated delays.
The debt sale was expected to help fund Aramco's $69.1
billion acquisition of a 70% stake in petrochemicals firm Saudi
Basic Industries Corp (SABIC) from the Saudi sovereign wealth
fund, a deal that many saw as a transfer of government funds
aimed at boosting the Saudi Crown Prince's economic agenda.
(Reporting by Hadeel Al Sayegh, Davide Barbuscia, Sylvia
Westall, Marwa Rashad, Clara Denina; Additional reporting by
Joshua Franklin in New York and Dahlia Nehme in Abu Dhabi;
Editing by Christopher Cushing, Edmund Blair and Alexander
Smith)