Saudi Arabia has just taken a big step to ensure its massive oil company -- Aramco -- is ready for the stock market.

In an official announcement on Friday, the Saudi government said Aramco was converted into a joint-stock company -- one in which shares can be bought and sold -- on January 1.

Saudi Arabia is planning to sell 5% of Aramco, the world's biggest oil producer, via an initial public offering this year.

The IPO, which could be the world's biggest, is at the heart of the kingdom's plan to wean itself off oil. Proceeds from the sale should help the economy diversify into other sectors, including tourism and technology.

Saudi officials have estimated that the IPO could give Aramco a valuation of $2 trillion, five times that of Exxon Mobil (XOM). Selling just 5% of Aramco could raise $100 billion, if those estimates are accurate.

Officials are still deciding whether to list Aramco shares in New York, London, Hong Kong or Tokyo, in addition to the Saudi stock exchange.

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Apart from the change in Aramco's legal status, here are five things we learned from Friday's announcement:

1. The government will retain complete control over how much oil Aramco produces, to serve "the state's goals politically and economically."

2. Saudi Arabia will be able to buy back all Aramco stock from shareholders, at a price of its choosing, provided it can persuade at least 75% of non-government investors to agree.

3. The government will appoint six members of Aramco's board, including the chairman and deputy chairman.

4. Other shareholders who own more than 0.1% of the company will be able to nominate candidates for the remaining five boardroom seats.

5. Members of Aramco's board will have their pay capped at 1.8 million riyals ($480,000) per year, unless specifically approved by shareholders.

-- Mustafa Al-Arab contributed to this report.