Saudi Arabia Splits Ministry of Energy and Mineral Resources into Two
2019-09-03    []
Saudi Arabia is establishing a standalone ministry of industry and mineral resources, separating it from the energy ministry as one of several government changes announced by King Salman in royal decrees published on Friday. Bandar al-Khorayef, an investor and private-sector industrialist, is to lead the new ministry, according to the state news agency.
Industry and mineral resources previously formed part of the larger ministry, which also included the powerful energy ministry led by Khalid al-Falih, who inherited industry and mining when he was appointed energy minister in 2016. Falih is expected to continue to have a strong influence on economic policy as Saudi Arabia advances its plan for an initial public offering (IPO) of Saudi Aramco as part of the country's program to diversify its sources of revenue, away from a near-total dependence on crude oil. Falih is also chairman of Aramco.
Tokyo and Riyadh are now considered the most likely stock exchanges for the Aramco listing. London and Hong Kong were the early frontrunners but this is no longer the case, according to industry reports. London is unlikely to be the exchange, partly due to Brexit uncertainty and Hong Kong because of the civil unrest there. A New York listing also appears less likely because it would carry too many legal risks. New York was the exchange favored by Crown Prince Mohammed bin Salman before plans for the IPO were put on hold last year. According to Reuters, citing sources, Saudi cabinet ministers and Aramco executives concluded at an August meeting that a US listing would not be considered unless Aramco is offered sovereign immunity that protects it from any legal action.

Aramco is expected to begin preparations for its IPO after it completes the acquisition of a 70% stake in Sabic in 2020. The IPO, the largest public share offering in history, is expected to take place in 2021. Aramco expects to list 5% of its shares, which analysts estimate will raise up to $60-75 billion. Saudi Arabia hopes, perhaps unrealistically, to raise up to $100 billion.



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