Major cabinet shake-up in Saudi Arabia, including energy
LONDON - Saudi Arabia is changing at an uncharacteristically fast pace as the energy-rich kingdom attempts to implement its Vision 2030 reform plan to wean itself off dependency on oil revenues.
In a major cabinet reshuffle, King Salman bin Abdulaziz Al Saud issued a royal decree replacing veteran oil minister Ali al-Naimi with former health minister and Saudi Aramco technocrat Khaled al-Falih. Naimi, 80, had held the oil portfolio since 1995. He will remain an adviser to the royal court. A number of government ministries were also restructured.
The news, which led to a spike in the price of oil, generated significant speculation by analysts on whether this was an indicator of a policy change. A day after his appointment, Falih stressed the kingdom would stay the course and continue its current energy strategy.
“We remain committed to maintaining our role in international energy markets and strengthening our position as the world’s most reliable supplier of energy,” Falih said in a statement.
The renamed Ministry of Energy, Industry and Mineral Resources saw more than just a change in leadership as it will now be responsible for all the kingdom’s energy needs, including electricity, an indicator of the Saudi diversification drive.
The kingdom’s central bank, the Saudi Arabian Monetary Agency (SAMA), saw US-educated bank veteran Ahmed al-Kholifey take over as governor and its functions restructured. SAMA will no longer serve as the kingdom’s biggest sovereign wealth fund because a larger one is being created under Vision 2030, but will continue to be responsible for setting Saudi monetary policy.
Deputy Crown Prince Mohammed bin Salman bin Abdulaziz in late April unveiled major economic reform plans designed to address the kingdom’s heavy dependency on oil, while also nurturing untapped aspects of the Saudi economy. The ambitious project — called Vision 2030 — is also planned to include the establishment of a domestic defence sector, an increase in domestic and Islamic tourism and the introduction of a green card-like system.
Saudi Aramco, the world’s most valuable company, is in the final stages of concluding options for an initial public offering (IPO) of less than 5% of its overall value. The plan is to be presented to Aramco’s Supreme Council soon for final approval.
According to Chief Executive Officer Amin Nasser, the IPO will be listed domestically and in two foreign markets. In an interview in April, Mohammed said he expects the Aramco IPO to be valued at a minimum of $2 trillion.
Domestically, the kingdom has seen a number of major social changes in the last year, including the participation and election of women to municipal councils for the first time and the curtailing of the notorious religious police powers. Among the latest announcements was the newly established General Authority for Entertainment, an effort to improve national recreational life.