As recently announced by Prince Mohammad bin Salman Al Saud, Saudi Arabia’s government is going to control the country’s major crude oil reserves, as well as any move to produce from them. This decision came after the initial public offering (IPO) of Saudi Arabian Oil Company (Saudi Aramco).
Basically, the stake of Saudi Aramco in its concession to pump the country’s crude oil is what the government is planning to sell. According to analysts, the IPO could be worth more than $1 trillion.
Commenting on this development, Prince Mohammad said:
“The wells will still be owned by the government. The company only has the right to benefit from the wells. This is the same as before, and there are no changes to that.”
The Prince went on to say that decisions on production will still be subject to the policies set by the Organization of the Petroleum Exporting Countries (OPEC) and the balance of supply and demand. As noted, the country is the largest producer among OPEC members, with Saudi Aramco’s crude oil reserves estimated at 260 billion barrels.
Moreover, it is said that the proceeds from the IPO will expand the country’s sovereign-wealth fund, with a portion of it to be set aside to develop local industries.