Chairman Of Oil Giant Saudi Aramco Replaced By An Ally Of The Crown Prince
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There's a major shakeup at the world's most profitable company that also happens to be the company that fuels the economy of Saudi Arabia. As announced this week, the chairman of the national oil company Saudi Aramco has been replaced. The new chairman doesn't come from the oil business, but he has a major credential. He is an ally of Crown Prince Mohammed bin Salman. NPR's Jackie Northam reports.
JACKIE NORTHAM, BYLINE: Just a few days ago, Khaled al-Faleh had a broad and powerful portfolio overseeing mining and industrial development in Saudi Arabia, heading up the state oil Goliath, Aramco. Al-Faleh was also the kingdom's energy minister. He retains that position. The others have been stripped away.
EMILY HAWTHORNE: I think for him to be separated from Aramco certainly ends a significant amount of tradition that the kingdom has held for a long time to have the energy ministry and Aramco together.
NORTHAM: Emily Hawthorne is a Middle East analyst at Stratfor, a geopolitical intelligence company. She says unpredictable acts have become the hallmark of Crown Prince Mohammed bin Salman.
HAWTHORNE: It's in line with what the crown prince has been known for, which is trying to shake up some of the tradition, trying to inject new ideas into how to run some of these ministries.
NORTHAM: The announcement came from Faleh himself. He tweeted that he's been replaced by Yasir Al-Rumayyan, a former local investment banker who for three years has been running Saudi Arabia's public investment fund, which is one of the largest sovereign wealth funds in the world.
ELLEN WALD: I do see the appointment of Rumayyan as somewhat not inspiring of confidence.
NORTHAM: Ellen Wald is the author of "Saudi, Inc.", which is a history of the Saudi energy industry and Aramco. She says Rumayyan, a close ally of the crown prince, has made some controversial, even risky, investment decisions.
WALD: For example, they invest in a lot of startups in America. They're a big investor in the tech scene. They've invested in Uber, in a augmented reality platform, called Magic Leap. Many of their investments seem much more like those of a venture capital firm as opposed to a traditional sovereign wealth fund.
NORTHAM: Wald says there's concern that Rumayyan has no experience in oil. She says Aramco became successful in part because it was run by professional oil men who were independent from the Saudi government.
WALD: What we have been seeing over the past several years is increased control being exerted over Aramco by the government, by people who are not oil professionals and who may have different goals and strategies in mind than those who have controlled the company.
NORTHAM: Rumayyan's move to head up Aramco is seen as part of an effort by the crown prince to publicly sell off about 5% of the oil company. It's been repeatedly delayed among skepticism about a lack of transparency in the company's books. Simon Henderson, a Saudi specialist at the Washington Institute, says the crown prince hopes to raise about $100 billion in an initial public offering, which will go into the sovereign wealth fund that Rumayyan continues to run to help diversify the economy and invest in mega projects in the kingdom.
SIMON HENDERSON: And there is a degree of concern that what the crown prince wants to invest in are highly imaginative, or rather, over-imaginative projects which won't actually change Saudi Arabia in the way that he wants it to.
NORTHAM: Henderson says this is all part of the crown prince's strategy to wean Saudi Arabia off its dependency on oil.
HENDERSON: It's ironic that in order to change it from an oil-based economy, you are depending on oil to do it.
NORTHAM: And depending on a close ally at the head of Aramco to help smooth the process.
Jackie Northam, NPR News. Transcript provided by NPR, Copyright NPR.