Saudi Arabia is preparing a dramatic change of strategy with the creation of a sovereign fund of more than two billion dollars, one of the largest in the world, in order to reduce its dependence on oil.
The plan envisaged Saudi Arabia is designed for the post-oil era. In the course of an initial public offering, the Kingdom would create the largest sovereign funds in the world, said Prince Mohammed bin Salman, second in line of succession to the news agency Bloomberg. The Public Investment Fund (PIF) must control more capital to two billion dollars.
“Within 20 years we will be an economy or a state that no longer depends mainly on oil,” said bin Salman. To collect the first means, Saudi Arabia launch IPO state-owned oil and chemical Saudi Aramco in 2017 or 2018. Initially, less than five percent of the shares of suppliers of the world’s largest oil will be used for private investors.
At the same time the oil consortium will be transformed into a group of industrial companies. With the IPO, the closed Saudi economy is open to private investors. however, Aramco now struggle with extreme drop in oil prices.
Without reducing exploitation rates continue to fall
On the other hand, Prince Mohamed bin Salman of Saudi Arabia warned that his country is only willing to freeze oil extraction if Iran and other producing countries do the same.
The statement of Prince caused prices of the main types of crude, Brent and WTI, fell more than 1.5 percent. By mid-April is scheduled a meeting of major oil producing countries to discuss the possibility of restricting the extraction of oil. Experts believe that it is unlikely that Iran commit to restrict oil production, since not long ago that international sanctions imposed on Tehran were lifted, allowing this country back to increase production for the first time in many years.
JOV (Spiegel, Reuters)
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