RIYADH: Saudi Arabia is restructuring Saudi Aramco, the world’s biggest energy company, in a move apparently aimed at letting it operate more at arm’s length from the powerful oil ministry.
Analysts expected technocrats to get a freer hand in running the state-owned giant.
However, some said the restructuring might be only the first step in a shake-up of the Saudi 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.
Aramco would be separated from the oil ministry of the top Opec member. Aramco officials could not be immediately reached for comment but Arabiya’s reports closely reflect official thinking.
Mohammad Al Sabban, a former senior adviser to oil minister Ali Al Naimi, said the move would strengthen Aramco. “This decision will bring more flexibility to the company to take decisions on a commercial basis, and keep full financial control,” he said.
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 Abdul Aziz Bin Salman, a son of the King Salman, could be appointed to replace Naimi, the 79-year-old technocrat oil minister.
King Salman promoted Prince Abdulaziz, long a member of Saudi Arabia’s Opec delegation, to deputy oil minister earlier this year from assistant oil minister, a post he had held for many years.
Some diplomatic and Saudi sources have suggested his experience might overcome the hurdles to a royal becoming oil minister.
“They are trying to rearrange 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.
“So that way, Aramco will be totally business-oriented, not an arm of the petroleum ministry.”
Major reshuffle Aramco was once US-based and run by Americans but has long been a Saudi state corporation.
It dwarfs all others in the industry, with crude reserves of 265 billion barrels, more than 15 per cent of all global oil deposits.
It produces over 10 million barrels per day, three times as much as the world’s largest listed oil company, ExxonMobil, while its reserves are more than 10 times bigger.
If Aramco were ever to go public, it would probably become the first company ever to be valued at $1 trillion or more.