Ali al-Naimi, who held the post of oil minister for more than two decades, was one of the most powerful figures within the OPEC oil cartel.
Advertisement
Aramco Chairman Khalid al-Falih was appointed minister of the renamed Ministry of Energy, Industry and Mineral Resources.
A public listing by Saudi Aramco would make it the first flotation of a major state-owned oil firm in the Gulf.
The Organization of the Petroleum Exporting Countries says that Saudi Arabia exports more than seven million barrels of oil daily and has 18 percent of the world’s proven petroleum reserves.
Prince Mohammed’s plans, outlined in the so-called “Vision 2030” blueprint announced on April 25, include setting up the world’s biggest sovereign wealth fund, transforming Aramco into an energy and industrial conglomerate, and generating an additional US$100 billion in non-oil revenue by 2020. Importantly, Mohammad bin Salman is more focused on ending Saudi’s dependence on hydrocarbons through sweeping reform and maintaining market share versus Iran than he is on pursuing higher oil prices’.
The Kingdom of Saudi Arabia seemed willing to freeze its output in the Doha, Qatar talks last month but changed its approach. Which country takes the bait will be fascinating not just because of the numbers involved (Aramco is said to be worth $2.5 trillion ) but also because of weighty political alliances down the road.
“We remain committed to maintaining our role in global energy markets and strengthening our position as the world’s most reliable supplier of energy”, Al Falih added.
Prince Mohammed bin Salman, now assuming effective control over Saudi oil policy, has stated that the country could increase output to 11.5 million barrels a day immediately and go to 12.5 million in six to nine months. As such, any incremental volatility in the oil market is unlikely.
In the wake of the cabinet reshuffle, al-Falih on Sunday attempted to calm fears regarding possible changes to Saudi Arabia’s longstanding oil-production policies. Aramco will also boost production capacity by 33% at its Shaybah field to 1 million barrels a day in the coming weeks and plans to double natural gas production over the next 10 years.
Advertisement
“We see the market balancing sometime in 2016, we see demand ultimately exceeding supply and soaking up a lot of the excess inventory, and prices in due course will respond, regardless of when and by how much”, Falih said in Riyadh in late December.
