The world’s biggest IPO is set to take place next year, as Saudi Arabia’s Aramco oil company prepares to float about 5% of its business. As fears over a delay in the IPO were soothed today, the question of where Aramco will be listed still remains up in the air.

The locations have been whittled down to New York and London, alongside Riyadh’s Tadawul exchange, and Saudi analysts have said the IPO will value Aramco at around $2 trillion.

Speaking at an energy conference in Russia, the Kingdom’s energy minister and Aramco chairman, Khalid Al-Falih, gave assurances that the IPO is still on course for 2018.

“The government is moving right ahead, as the chairman of Saudi Aramco I can tell you that our board remains focused on reviewing the preparations for that event by a very dedicated team within the company. It will take place in 2018 and there is nothing to indicate that that schedule is slipping,” he said.

The gulf country’s deputy crown prince, Mohammed bin Salman, is expected to make a final decision over which stock exchange the IPO will list on within a matter of weeks.

Countries have been falling over themselves to get the oil titan to list with them, hoping for a slice of the trading volumes and fees that will come from the world’s largest extractor of crude oil becoming a public company.

The Financial Conduct Authority (FCA) has put forward proposals to introduce a new premium segment, allowing sovereign-owned companies to list on the London Stock Exchange without having to adhere to some of the governance requirements that other premium listed companies do, including floating 25% of their stock.

These proposals have been met with mixed reactions,with some throwing their full support behind the FCA trying to create a more attractive environment for the state-owned oil company, while others have asked for more scrutiny, holding up ENRC, the Kazakstan mining group, that left the FTSE after amid allegations of corruption, as a cautionary tale.

The Institute of Directors (IoD) has expressed its concern that the rules “do little to address the risks and challenges these companies pose, which include the potential for politically-motivated ownership interference over the company by the state apparatus and national governments undermining the rights of minority shareholders”, while Chris Cummings, chief executive of the UK’s Investment Association, wrote to the FCA to say that the rules should be maintained “irrespective of the size of the company being listed.”

Nicky Morgan and Rachel Reeves, chairs of the Treasury and Business, Energy and Industrial Strategy select committees, also wrote to the financial regulator, asking the FCA to provide information on how much the new proposals were influenced by Aramco’s planned IPO.

On the other side of the fence, prominent voices have spoken up in favour of the listing, most recently Sir Gerry Grimstone, chairman of Standard Life Aberdeen, who said: “I think that company should be listed here. No one would say that Saudi Aramco is not well-run…If a company is well-run we need to encourage that company to come to London.

“If London wants to compete in the global marketplace, it must be able to attract firms such as Saudi Aramco to the Square Mile”, he said at the Conservative Party Conference.

The City of London Corporation has also backed the new listing rules, saying they have “no problem” with them.

The Corporation’s policy chairman, Catherine McGuinness, told City A.M.: “Good corporate governance is one of the City’s real selling points in the global economy. We see no problem with adding a properly regulated and transparent category to the LSE’s already diverse range. This proposed category reflects the special nature of sovereign entities.

“Crucially no one would be forced to invest, while sophisticated market participants will be able to make their own judgments.”

A London Stock Exchange Group spokesman said: “Over many decades, the London market has achieved global leadership owing to our regulators’ successful practice of periodically reviewing our regulatory framework to ensure that the principles of investor protection and high standards of governance are properly calibrated with economic realities.

“Anything that enables UK markets to function well and in an orderly and internationally competitive manner, with both a high level of investor protection and meeting the demands of both issuers and global investors for a range of options to realise their capital raising and investment needs is welcome.”

The proposals have led to calls for political scrutiny and protection of the UK equity market, but with the Financial Times reporting that legal documents shown that the Kingdom’s lawyers have advised against a new York listing, as it poses the greatest litigation risk of any jurisdiction, Aramco may have their sights firmly set on London.

White & Case, the legal firm Aramco has chosen for the float, have advised Saudi officials that New York leaves them open to more legal issues, including law suits arising from the US’s new terrorism legislation, which could allow families of those who died in the 9/11 terror attacks to sue Saudi Arabia.

According to the documents seen by the Financial Times, listing on the New York Stock Exchange and on Saudi Arabia’s Tadawul exchange was the favoured option, with a premium category listing on the London Stock Exchange as well as at home, the next best option, followed by a standard listing on the LSE.

Saudi Arabia’s Crown Prince Mohammed Bin Salman wants to overhaul his country’s economy, using the IPO to underpin grander reforms – Vision 2030 – that aim to reduce its reliance on oil and use the money from the listing toward developing other industries.

In doing so, the Kingdom will also permanently change the wealth and prestige of any city it chooses to list in, and as the world’s stock exchanges fiercely battle to snare such a big fish, the UK needs to decide on whether it is really willing to lose to another city.