Saudi Arabia has announced a change in the status of oil giant Aramco to become a joint stock company at the beginning of this year.
The move comes ahead of a 5% stake in the company in the second half of this year, according to the government plan.
The move is needed for local companies in Saudi Arabia to register their shares on the exchange, an Aramco source declined to be identified, Reuters reported.
"In a regular move in preparation for Aramco's IPO, the company has become a joint stock company," the source said.
"This establishes the general framework that allows future investors to own the company's shares, as well as existing shareholders and the government," he added.
Aramco has a fully paid-up capital of 60 billion riyals ($ 16 billion) divided into ordinary shares of 200 billion shares, according to Aramco's domestic laws.
Aramco's Board of Directors consists of 11 members with the authority to list the Company's shares in the local and international markets.
The Government appoints 6 members of the Governing Council, while shareholders above 0.1% have the right to propose a member of the General Assembly.
The Government has the right to appoint or change the Chairman of the Board.
The source said the government will remain Aramco's largest shareholder and will retain its position as a party responsible for drawing up the company's policies and setting the production ceiling.
Aramco is at the heart of the 2030 vision put forward by Saudi Crown Prince Prince Mohammed bin Salman to reform the economy and reduce its dependence on the oil industry.