Saudi preps for post-oil era with 2 trillion megafund

Doves sit on an oil pump at sunset in the desert oil fields of Sakhir, Bahrain, Sunday, Dec. 13, 2015. (AP)

Staff writer, Al Arabiya English

Saudi Arabia plans on dedicated a $2 trillion budget for a post-oil economy, Saudi Deputy Crown Prince Mohammed bin Salman al-Saud was quoted as saying on Friday by Bloomberg.

“Deputy Crown Prince Mohammed bin Salman laid out his vision for the Public Investment Fund, which will eventually control more than $2 trillion and help wean the kingdom off oil,” Bloomberg said on its website.

It said it had conducted a five-hour conversation with the senior Saudi prince who oversees ministries including finance, oil and the economy through the Council for Economic and Development Affairs.

“IPOing Aramco and transferring its shares to PIF (public investment fund) will technically make investments the source of Saudi government revenue, not oil,” the prince said.

The deputy crown prince has signalled that the hotly-awaited IPO for oil firm Aramco, which will put 5% of shares on the market, could happen in 2017.

Aramco, Saudi's state-owned oil giant, is the world's largest company in terms of market capitalization.

Aramco's value has been estimated at anywhere between $1.25 trillion and $10 trillion.

Also on Friday, Saudi Arabia will agree to freeze crude oil production levels only if Iran and other major producers do so.

Iran has said it will not join fellow OPEC and non-OPEC members in a plan to be discussed in a Doha conference on April 17 to freeze oil production in an attempt to boost prices.

Iran seeks to revive its oil industry following the lifting of international sanctions.
“If all countries including Iran, Russia, Venezuela, OPEC countries and all main producers decide to freeze production, we will be among them,” Mohammed bin Salman said.

  (With Reuters)