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A Saudi Aramco employee sits in the area of its stand at the Middle East Petrotech 2016 in Manama, Bahrain on Sept. 27, 2016.

Hamad I Mohammed/Reuters

Saudi Arabian Oil Co. is asking banks, including Goldman Sachs Group Inc. and HSBC Holdings PLC, to pitch for an advisory role on its initial public offering as it pushes ahead with plans for the world's largest share sale, three people with knowledge of the matter said.

The company has also sent out the so-called request for proposals to lenders including Credit Suisse Group AG and Morgan Stanley, the people said, asking not to be identified as the process is private. Aramco, as it's known, is targeting the second or third quarter of 2018 for the IPO and expects to select banks later this year, two of the people said.

Aramco has also shortlisted New York-based boutique investment bank Moelis & Co. and Evercore Partners Inc. as potential financial advisers for the IPO, people with knowledge of the matter said. Aramco had been seeking a boutique to help it select banks to underwrite the offering, decide on venues for the listing and ensure the IPO's smooth execution, people familiar with the plans had said in September.

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Saudi Arabia plans to sell less than 5 per cent of the company as part of plans by Deputy Crown Prince Mohammed bin Salman to set up the world's biggest sovereign wealth fund and reduce the economy's reliance on hydrocarbons. The sale's estimated size of $100-billion (U.S.) would make it the largest ever, dwarfing the $25-billion raised by Chinese internet retailer Alibaba in 2014.

JPMorgan Chase & Co. and Michael Klein, the former Citigroup Inc. investment banker who runs his own advisory firm, have already been selected to advise on the IPO, people familiar with the matter said in April. Klein is providing strategic advice to the government, while JPMorgan is working on preparations for the IPO and may be among the banks that underwrite the listing, the people said.

Aramco chief executive officer Amin Nasser said the company may list on two or three exchanges and, to make the sale more attractive to investors, Saudi Arabia will reduce the company's overall tax rate.

Prince Mohammed's plan envisions the Aramco IPO as the centrepiece of Saudi Arabia's biggest economic shakeup since the founding of the country in 1932. Although details of what exactly will be sold remain unclear, Mr. Nasser has said the IPO will be based on the company maintaining the so-called concession, which gives it the right to exploit the kingdom's oil and gas reserves.

Saudi Aramco and Evercore didn't immediately return calls seeking comment. Representatives for Morgan Stanley, HSBC, Credit Suisse and Moelis declined to comment, while Goldman Sachs wasn't immediately available for comment.

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