“Even more, all worldwide banks and research and planning centres in the world will monitor it intensively”.
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The plan foresees social change in one of the world’s most conservative societies.
Citi said it was likely that Saudi Arabia was targeting 500,000 barrels per day (bpd) in new sales to bring its production up to at least 11 million bpd or higher.
It traces its history to a 1933 agreement between the kingdom and the Standard Oil Company of California to develop the country’s oil reserves, and has been known as Aramco – an acronym for the Arabian American Oil Company -since 1944. Saudi Arabia was the world’s third-largest arms buyer previous year, with purchases of more than $87 billion, yet only 2 per cent was for locally-produced weaponry.The government says it also wants to increase the number of women participating in the labor force to 30% from 22% at present, but it didn’t give details on how it wants to achieve that.The fall in oil prices is largely due to OPEC kingpin Saudi Arabia’s own refusal to cut output as it seeks to drive less competitive players out of the market, in particular United States of America shale producers.
Mohammed said part of the plan is “to sell less than 5% of Aramco” in an Initial Public Offering (IPO) on the stock market, valuing the company at between $2 trillion and $2.5 trillion. “People in the past used to be upset that Aramco’s files and data are not announced, [or that they were] unclear and not transparent”, he said, adding that if Aramco is listed on the market, it will have to publish data every quarter.
“Part of its assets will come from the sale of a small part of Aramco”, the deputy crown prince said, referring to the fund.
But the focus was on economic restructuring to help reduce oil dependence.
REFORMS COMING. Two men sit on wall overlooking the Red Sea at a popular cafe in the northwestern Saudi town of al-Wajh on April 25, 2016.
The world’s top oil exporter and Middle East power on Monday unveiled an ambitious plan to diversify and become one of the 15 biggest economies in the world.
“I think by 2020, if oil stops we can survive”, Prince Mohammed said.
The plan could raise the country’s share of non-oil exports in non-oil gross domestic product to 50% from 16%, CNBC reports. Revenue from the industry earned the Saudi government billions and enabled the ruling royal family to offer generous benefits to Saudi citizens.
The Aramco shares would be listed on the Saudi stock exchange, the Tadawul, and on an worldwide exchange, possibly in the United States.
The collapse in oil prices – from more than $100 a barrel in early 2014 to around $40 a barrel this month – has underscored the dangers. The “Saudi addiction to oil” had caused it to neglect other aspects of the economy, he told al-Arabiya.
The oil market also got support from the Baker Hughes weekly U.S. rig count, which showed oil producers curtailed use of eight drilling rigs in the week ending April 22. The country logged a record $98 billion budget deficit for 2015.
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Much of the optimism over the reforms stems from the energy and ambition of Prince Mohammed, and the fact that after years of piecemeal efforts at change, the government has put together a broad plan that addresses many problems simultaneously. Just this week, the king sacked the country’s water and electricity minister after complaints by citizens online over how increases in water tariffs had been implemented.
