For Michael Cohen, head of energy commodities research at Barclays, the issue to watch isn’t necessarily the change in oil leadership but what is involved in the kingdom’s economic blueprint called “Saudi Vision 2030”.
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Proceeds from the sale will contribute to creating the biggest government investment fund in the world, with a value of $2 trillion, whose profits can provide an alternative to plunging oil revenues.
The listing will be launched as soon as 2017, the report said.
How? With a record-smashing IPO for the most valuable company in the world: Saudi Aramco, a secretive state-owned company with a monopoly on all oil reserves in the kingdom.
Saudi Arabia ousted its long-serving oil minister Ali al-Naimi over the weekend and replaced him with Khalid al-Falih, the chairman of Aramco. They might even rise at first, out of uncertainty about Saudi Arabia’s new policies and how other oil producers will react to them.
Saudi Arabia is also looking increase its production of natural gas, with plans to almost double its output in 10 years, he said. “We are putting 250,000 barrels (per day) on stream” at the field in the east.
The total refining capacity is planned to be increased to 8 million to 10 million barrels a day, up from the current 5.4 million barrels a day, the Wall Street Journal reported.
Aramco also announced Tuesday that it expects a huge ship fix and shipbuilding complex that it is developing at Ras al-Khair on the kingdom’s east coast to be fully operational by 2021, chief executive Amin Nasser said on Tuesday.
“We are seeing a global increase in demand”, he said, citing growing consumption in India, the United States and elsewhere.
Oil prices have lost their early gains, hindered by renewed strength in the U.S. dollar.
Saudi Aramco is also eyeing global expansion and could enter into joint ventures in several countries, such as Indonesia, India, the US, Vietnam and China. Aramco is looking for joint ventures in countries from the USA to China, he said.
Output capacity at the company’s Shaybah oilfield is expected to go up by 33 percent, reaching 1 million barrels a day, in the next couple of weeks.
“This is a very important programme”, Nasser said.
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The huge reshuffle at the top of Saudi Arabian politics isn’t going to have any marked impact on the way that things are done in the country, according to a note sent by HSBC to clients on Monday.
