Saudi Aramco could be privatised as oil prices dip

Saudi Aramco could be privatised as oil prices dip
State-owned oil giant Aramco has transformed Saudi Arabia into a regional giant. Now, it is on the verge of being privatised, according to one of the kingdom's most powerful princes.
2 min read
07 January, 2016
Saudi Aramco has helped transform Riyadh into a local powerhouse [AFP]

Saudi Arabia could privatise its state-owned oil firm Saudi Aramco, as low oil prices continue to squeeze Riyadh's finances.

Deputy Crown Prince Mohammed bin Salman made the announcement during a candid interview with The Economist magazine.

In it he made the suprising admission that Riyadh might issue shares Aramco, a source of pride for many Saudis and key to the kingdom's colossal power.

"That is something that is being reviewed, and we believe a decision will be made over the next few months," Mohammed bin Salman told the London-based magazine.

It came on the same day that oil prices hit a 11 year low and Riyadh posted a record budget deficit due to falling oil prices.

"Personally I'm enthusiastic about this step. I believe it is in the interest of the Saudi market, and it is in the interest of Aramco, and it is for the interest of more transparency, and to counter corruption, if any, that may be circling around Aramco," the prince said.

Although he is still in his thirties, Mohammed bin Salman wields enormous power in the country.

The prince serves as defence minister, chairs the Supreme Council, which has overseen Aramco since it was separated from the oil ministry last year, and leads the kingdom's main economic coordinating council.

Saudi Aramco is the world's largest crude oil producer and has been important part of the country's modern history and a symbol of Saudi Arabia's independence and strength.

In the 1950s, the then US-owned oil company was forced to split profits with the kingdom.

After the 1973 war between Israel, and Syria and Egypt, Saudi Arabia used the "oil weapon" to punish the US for its support of Tel Aviv. 

Riyadh went on fully takeover Aramco in 1980, which gave Saudi control of one of the world's most powerful companies.