(Bloomberg) -- Wall Street banks working on Saudi Aramco’s share sale are set to lose out on a highly-anticipated fee windfall after the deal was pared back from a record global offering to a mainly domestic affair.

Goldman Sachs Group Inc. and Morgan Stanley are among banks that may miss out on an expected fee bonanza after foreign investors balked at the deal and Aramco decided not to market the share sale outside the Middle East, according to people with knowledge of the matter. Advisers and arrangers will be compensated for costs but may not be paid enough to make a meaningful profit from the deal, some of the people said, asking not to be identified because the matter is private.

Aramco was expected to pay the more than two dozen advisers on the deal, including banks, lawyers, marketing and advertising agencies, between $350 million to $450 million, Bloomberg News reported in October. But the final payments will depend on how much Aramco equity banks are able to place with investors, the people said. Aramco didn’t immediately respond to a request for comment.

More than 20 global investment banks are working on the IPO after it was given finally the green light following repeated delays. After senior bankers delivered pitches that Aramco would be able to the achieve Crown Prince Mohammed bin Salman’s $2 trillion target with a 5% sale, the Saudi government and Aramco management are frustrated Wall Street’s biggest names were unable to deliver on those ambitions.

Saudi banks are now likely to take the lion’s share of fees because the bulk of the $25 billion Aramco aims to raise will come from the kingdom’s richest families, local retail buyers and regional investors, the people said.

Even the original fee pool, based on a target of raising $40 billion by selling 2% of the company at $2 trillion valuation, was relatively small compared with some deals at just 1% of the transactions value.

Still, banks had pitched for years to win a coveted role on the IPO. Aramco appointed nine global co-coordinators, including HSBC Holdings Plc and Credit Suisse Group AG. There are also 15 book runners and three financial advisers.

--With assistance from Archana Narayanan.

To contact the reporters on this story: Matthew Martin in Dubai at mmartin128@bloomberg.net;Javier Blas in London at jblas3@bloomberg.net;Dinesh Nair in London at dnair5@bloomberg.net

To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Will Kennedy

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