By Lorraine Gabina – EM TV International
The young Prince of Saudi Arabia, Mohammad Bin Salman, unveiled an ambitious plan yesterday to seek independence from oil in the future.
According to the Prince, this new plan will see Saudi Arabia move forward in the future away from a reliance on oil.
Prince Mohammed said the kingdom would raise the capital of its public investment fund to 7 trillion riyals, from 600 billion riyals.
He added that the world’s top oil exporter expects state oil company Saudi Aramco to be valued at more than $2 trillion ahead of the sale of less than 5 per cent of the company through an initial public offering.
The plans also includes changes that would alter the social structure of the ultra-conservative Muslim kingdom by pushing for women to have a bigger economic role, and by offering improved status to resident expatriates.
At the centre of the plan is the restructuring of its Public Investment Fund (PIF), which Prince Mohammed said would become a hub for Saudi investment abroad, partly by raising money through selling shares in Aramco.
Asked where the funds will be sourced for a $2 trillion dollar fund after recent borrowing, he said it would come from transferring the ownership of Aramco to the PIF.
The partial privatisation of Aramco was also central to the plans, and Prince Mohammed said it would be transformed into an energy company that he expected to be valued at $2 trillion to $3 trillion, and that less than 5 per cent of it would be listed on the stock market.
He said the state oil company is so big because of its rights to the kingdom’s crude reserves, that’selling even 1 per cent of its value would create the biggest initial public offering on earth.
He also said other subsidiary companies would also be listed along with other publicly held companies, and added that one major benefit of privatisation was that it would increase transparency and help limit corruption.