JPMorgan and Morgan Stanley approached for Saudi Aramco IPO - reports

Saudi Aramco's attempt to bring about the world's largest initial public offering could be assisted by US investment banks JPMorgan Chase and Morgan Stanley, according to reports on Wednesday.

The Saudi state oil firm is planning to sell off a 5% stake in exchange for $100bn, valuing itself at around $2trn. However earlier this week it was widely reported that the flotation would be delayed due to the complexities of the process.

The US banks have merged as the frontrunners to oversee the transaction, but other financial institutions such as HSBC are also being considered for a role, Reuters reported, citing unnamed sources.

The board of Aramco will meet this week in order to discuss how to bring the deal forward, after initially planning to present the project to Saudi king Salman bin Abdulaziz al-Saud, the report said.

Saudi Arabia is said to favour a flotation on the New York Stock Exchange, while also considering London and Toronto for the IPO. Other stock exchanges such as Singapore, Hong Kong, Tokyo and Shanghai had been shortlisted as well, but Aramco is understood to have ruled out those options.

The IPO is part of a wider government operation to modernise the Saudi economy and make it less dependent on oil reserves to flourish. Vision 2030 aims to diversify the country's assets, which currently includes pumping one in every nine barrels of oil globally.

With oil prices plummeting to as low as $27 per barrel in 2016, oil-rich states in the Middle East have had to reconsider their options, despite the fact Brent crude has maintained at least $50 per barrel since last November.