Saudi Arabia is restructuring the world's biggest energy company, Saudi Aramco, in a move apparently aimed at letting it operate more at arm's length from the powerful oil ministry. Analysts expected technocrats to get a freer hand in running the state-owned giant. Some said the restructuring might be the first step in a shake-up of the Saudi energy sector, and could possibly pave the way for a prince to take over the ministry itself, which is traditionally run by industry experts rather than members of the royal family.
Citing unnamed sources, Saudi-owned Al Arabiya TV reported on Friday that Aramco would be separated from the oil ministry of the top OPEC member. Aramco officials could not be immediately reached for comment but Arabiya's reports closely reflect official thinking.
Mohammad Al Sabban, a former senior adviser to oil minister Ali al-Naimi, said the move would strengthen Aramco. "This decision will bring more flexibility to the company to take decisions on a commercial basis, and keep full financial control," he said.
Conventional thinking is that the ruling Al Saud family views the oil minister's job as so important that giving it to a prince might upset the dynasty's delicate balance of power and risk leaving oil policy hostage to princely politicking. But Ehsan Ul-Haq, oil analyst at KBC Energy Economics, said it was highly likely that Prince Abdulaziz bin Salman, a son of King Salman, could be appointed to replace 79-year-old Naimi, who has been oil minister since 1995.
The king promoted Prince Abdulaziz, long a member of Saudi Arabia's OPEC delegation, to deputy oil minister from assistant oil minister earlier this year. Some diplomatic and Saudi sources have suggested his years of experience might overcome the hurdles to a royal becoming oil minister.
"They are trying to rearrange Aramco and restructure the whole company. They are also trying to restructure the oil ministry and name Prince Abdulaziz as minister of energy," said an industry source in Saudi Arabia. "So that way, Aramco will be totally business-oriented, not an arm of the petroleum ministry."
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