However, economic worries, the trade war between China and the U.S. and increased crude oil production by the U.S. has depressed energy prices.
A Sept. 14 attack on the heart of Aramco already spooked some investors, with one ratings company already downgrading the oil giant.
The announcement by the Capital Market Authority offered no timeline for the IPO.
"The Capital Market Authority board has issued its resolution approving the Saudi Arabian Oil Co. application for the registration and offering of part of its shares," the authority said in its statement.
"The company's prospectus will be published prior to the start of the subscription period."
The Saudi-owned satellite channel Al-Arabiya reported last week, citing anonymous sources, that pricing for the stock will begin Nov. 17.
A final price for the stock will be set Dec. 4, with shares then beginning to be traded on the Tadawul on Dec. 11, the channel reported. The channel is believed to have close links to the kingdom's Al Saud royal family.
- AP