Saudi Arabia’s Supreme Economic Council has approved the restructure of state oil giant Saudi Aramco, which includes separating it from the Oil Ministry
According to Reuters report, analysts expect technocrats to get a freer hand in running the state-owned giant. However, some say the restructuring might be only the first step in a shake-up of the kingdom’s energy sector and possibly pave the way for a prince to take over the ministry itself, which is traditionally run by technocrats rather than members of the royal family.
Citing unnamed sources, state-owned Al Arabiya TV reported recently that Saudi Aramco would be separated from the Oil Ministry of the top OPEC member.
Mohammad Al Sabban, former senior adviser to oil minister Ali al-Naimi, said that the move would strengthen the energy giant.
“This decision will bring more flexibility to the company to take decisions on a commercial basis, and keep full financial control,” he added.
Conventional thinking is that the ruling Al Saud family views the oil minister’s job as so important that giving it to a prince might upset the dynasty’s delicate balance of power and risk making oil policy hostage to princely politicking. However, Ehsan Ul-Haq, oil analyst at KBC Energy Economics, said it was highly likely that Prince Abdulaziz bin Salman, son of King Salman, could be appointed to replace al-Naimi.
King Salman had promoted Prince Abdulaziz to deputy oil minister earlier this year from assistant oil minister, a post he had held for many years. Some diplomatic and Saudi Arabian sources have suggested his experience might overcome the hurdles to a royal becoming oil minister.
”They are trying to rearrange Saudi Aramco and restructure the whole company. They are also trying to restructure the oil ministry and name Prince Abdulaziz as minister of energy,” said an industry source in Saudi Arabia. “That way, Saudi Aramco will be totally business-oriented and not an arm of the Petroleum Ministry.”
Saudi Aramco has crude reserves of 265bn barrels, more than 15 per cent of all global oil deposits. It produces over 10mn bpd.
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