AFP, Riyadh :
With a major government reshuffle, Saudi Arabia’s King Salman and his powerful son have shown their determination to move the kingdom’s economy away from oil, experts say.
A series of royal decrees announced on Saturday merged various ministries to reflect new priorities under the wide-ranging Vision 2030 plan announced two weeks ago by the king’s son, Deputy Crown Prince Mohammed bin Salman.
“It only shows they’re serious,” a veteran banker in the kingdom said of the government shuffle. “It’s all going in the right direction. They are trying to change.”
The world’s largest oil exporter had long talked of economic diversification but plunging oil revenues over the past two years have accentuated the effort, pushed by the 30-year-old Prince Mohammed, who heads the main Council for Economic Affairs and Development.
At the root of Vision 2030 is the sale of less than five percent of state oil giant Saudi Aramco in what officials say will be the world’s largest-ever Initial Public Offering.
Proceeds from the sale will help create the biggest government investment fund in the world, with a value of $2 trillion, whose profits can provide an alternative to oil revenues.
“Aramco’s role is key,” an oil industry source said, noting that the government chose the oil company’s chairman, Khaled al-Falih, to head a new super ministry of energy, industry and mineral resources.
“I think he got this position because of his performance,” the source said.
From 2009, Falih was Aramco’s president and chief executive officer. Last May he joined the cabinet as health minister while at the same time holding the Aramco chairmanship.
Falih replaced Ali al-Naimi who headed the now-defunct ministry of petroleum and mineral resources for about two decades.
A European diplomat said the new broader ministry reflects the government’s desire to develop other sources of energy besides petroleum.
The desert nation has potential for solar and wind power. It also wants to boost industry — from petrochemicals to defence — while mining is expected to take on a greater role in the economy.
With a major government reshuffle, Saudi Arabia’s King Salman and his powerful son have shown their determination to move the kingdom’s economy away from oil, experts say.
A series of royal decrees announced on Saturday merged various ministries to reflect new priorities under the wide-ranging Vision 2030 plan announced two weeks ago by the king’s son, Deputy Crown Prince Mohammed bin Salman.
“It only shows they’re serious,” a veteran banker in the kingdom said of the government shuffle. “It’s all going in the right direction. They are trying to change.”
The world’s largest oil exporter had long talked of economic diversification but plunging oil revenues over the past two years have accentuated the effort, pushed by the 30-year-old Prince Mohammed, who heads the main Council for Economic Affairs and Development.
At the root of Vision 2030 is the sale of less than five percent of state oil giant Saudi Aramco in what officials say will be the world’s largest-ever Initial Public Offering.
Proceeds from the sale will help create the biggest government investment fund in the world, with a value of $2 trillion, whose profits can provide an alternative to oil revenues.
“Aramco’s role is key,” an oil industry source said, noting that the government chose the oil company’s chairman, Khaled al-Falih, to head a new super ministry of energy, industry and mineral resources.
“I think he got this position because of his performance,” the source said.
From 2009, Falih was Aramco’s president and chief executive officer. Last May he joined the cabinet as health minister while at the same time holding the Aramco chairmanship.
Falih replaced Ali al-Naimi who headed the now-defunct ministry of petroleum and mineral resources for about two decades.
A European diplomat said the new broader ministry reflects the government’s desire to develop other sources of energy besides petroleum.
The desert nation has potential for solar and wind power. It also wants to boost industry — from petrochemicals to defence — while mining is expected to take on a greater role in the economy.
