Editor's letter: Prepare for royal changes in oil industry
With the architect of Saudi Vision 2030 named as the next heir to the throne, expect more radical reforms to happen
The news may have come suddenly, but for many it wasn’t a surprise. After all, the man who had been the mastermind behind Saudi Arabia’s ambitious socio-economic transformation plan – the Vision 2030 – had naturally raised his chances of becoming the future king.
As the new crown prince of Saudi Arabia, Prince Mohammed bin Salman is expected to play an even more influential role in world oil markets, at a time when major crude producing nations find themselves teetering due to below par oil prices. Prince Mohammed, who was elevated last month, has upended the traditional Saudi energy model in the nearly two and a half years since his father ascended the throne. Whereas the royal family had previously been content to leave the managing of the oil industry to seasoned technocrats, the prince has sought to exert influence over the country’s massive energy resources, even ensuring that one of his close aides be given the charge of the energy ministry.
With the kingdom’s economy affected by turbulence in the global oil market, Saudi Arabia, with the prince’s backing, has been a leading force behind the effort by the Organization of the Petroleum Exporting Countries to bolster prices – notably with taking the initiative to convince a group of 11 non-OPEC oil producers led by Russia, to join OPEC in reducing oil output.
At home, Prince Mohammed has engineered a strategy to capitalise on the kingdom’s biggest and most-prized financial possession – Saudi Aramco. The prince has welcomed participation of energy stakeholders, financial institutions, and even international oil companies to invest in a 5% stake in Aramco, which he plans to float through an initial public offering in capital markets at home and abroad. By planning to privatise just a tiny fraction of the oil behemoth, estimated to be worth a trillion dollars, Prince Mohammed aims to secure the country’s economy for generations to come.
Observers say the 31-year-old prince will bring youthful energy and a fresh eye to the kingdom’s most valuable wealth, the oil and gas sector, using it to help further break away from tradition to modernise and diversify the economy.
Before I sign off, just wish to remind you that the deadline for submitting nominations for the Oil & Gas and Refining & Petrochemicals Middle East Awards 2017 is July 20th. Turn to page 28 to find out what the judges are looking for in nominations this year.