Saudi Fires Its Oil Minister Just Weeks After His Removal As Aramco Chairman
Saudia Arabia has officially fired its current oil minister, Khalid al-Falih, just a week after he was removed as the chairman of the country's state-owned oil company Saudi Aramco.
According to a state media announcement, al-Falih has been replaced by the country's Prince Abdulaziz bin Salman bin Abdulaziz al-Saud.
The removal of al-Falih as the country's oil minister is the latest in a string of large developments in Saudi Arabia's preparation for Saudi Aramco's planned initial public offering (IPO).
The company already held a successful international bond sale in April, attracting huge interest from investors worldwide.
Al-Falih's removal from both positions has been seen as a direct result of his stance against the nation's planned IPO, which could be the world's biggest IPO to date. According to reports citing a senior OPEC official, Al-Falih is apparently very public against his lack of enthusiasm on Saudi Aramco's planned debut.
Al-Falih has had large contributions in the development of Saudi's oil industry since he was appointed as minister in May 2016. Al-Falih is also touted as one of the architects of the still active pact between the Organization of the Petroleum Exporting Countries (OPEC) and several major players in the industry, including Russia.
While the pact has had some positive effects on the industry as a whole, it still did not manage to achieve its ultimate goal of increasing oil prices back to $80 a barrel.
The United Arab Emirates' minister of energy, Suhail Al Mazrouei, welcomed the change and mentioned in an interview that Prince Abdulaziz is the perfect candidate for the position given his OPEC experience.
Saudi Arabia's new oil minister is Crown Prince Mohammed bin Salman's half brother and has been part of the country's OPEC delegation for many years.
Prince Abdulaziz' appointment, which has broken the country's long-standing tradition, officially makes him the first member of the royal family to serve as Saudi Arabia's oil minister.
Saudi first revealed plans of a partial IPO for Saudi Aramco back in 2016. The IPO was scheduled to originally take place sometime in 2018. Due to concerns involving litigation with the United States and over Prince Bin Salman's goal of valuing the company at $2 trillion, IPO plans were eventually put on hold.
With the positive feedback from investors during its international bond sale in April, the country apparently decided to revive its partial privatization plans. However, going public is still a risky proposition for the company, especially if global oil prices remain weak.