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Page added on April 25, 2016
Saudi prince unveils sweeping reform plan for economy
Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman announced a sweeping reform plan on Monday that he said would transform the kingdom into a global investment power and wean the world’s top oil exporter off crude by 2020.
Prince Mohammed, a son of the Saudi king who also serves as defense minister and head of the country’s economic council, was giving his first nationally televised interview since his accession last year.
The plan was a recognition that an economy based purely on energy can be vulnerable to external shocks.
“I think by 2020, if oil stops we can survive,” Prince Mohammed said. “We need it, we need it, but I think in 2020 we can live without oil.”
As part of his Vision 2030 reform plan, Prince Mohammed said the state-controlled Public Investment Fund had been restructured to become a hub for Saudi investment abroad, partly by raising money through sales of shares in national oil giant Saudi Aramco.
“We restructured the fund. We included new assets in the fund, Aramco and other assets, and we fixed the problems of the current assets that the public investment fund owns, both in terms of companies and other projects,” he said.
“Initial data say the fund will have control over more than 10 percent of global investment capacity.”
A green card system would be launched within five years to enable expatriate Arabs and Muslims to live and work long-term in the country, Prince Mohammed said, in a major shift for the insular kingdom.
31 Comments on "Saudi prince unveils sweeping reform plan for economy"
Dredd on Mon, 25th Apr 2016 9:34 am
“Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman announced a sweeping reform plan on Monday that he said would transform the kingdom into a global investment power and wean the world’s top oil exporter off crude by 2020.”
They left out the rest of the sentence “and bring a death sentence on themselves” (The Criminally Insane Epoch Arises – 5).
onlooker on Mon, 25th Apr 2016 10:58 am
Once their OIL production/Sales days are behind them, their investment gambit will last them about as long as their money. Maybe they should invest in space technologies as anything on Earth would not be a wise investment.
Apneaman on Mon, 25th Apr 2016 10:58 am
What’s with the rash of articles about life in the KSA? Like who gives a shit about a bunch of medieval retards other than their oil? American blond women are excluded from the green card system under the royal cock suckers clause. They never stay long anyway since after the greasy Saudi royalty defiles them for a few months they get a new batch. The used up ones go home and marry white losers and pop oxy all day to dull the memory.
onlooker on Mon, 25th Apr 2016 11:03 am
I heard they used to come to the upscale Waldorf Astoria Hotel in NY and have wild lavish parties with hookers and everything. I guess Islam must have a system similar to Christianity whereby you are forgiven your trespasses if you say a few prayers or give a few donations.
rockman on Mon, 25th Apr 2016 11:21 am
So part of their sales pitch when they try to try to suck investors into ARAMCO will be: “We need it, we need it, but I think in 2020 we can live without oil.” So invest in ARAMCO because we think we won’t have much need for that company in the next 4 or 5 years. LOL.
So depending on what numbers you believe the KSA has about $700 BILLION currently invested in the fund providing them some level of non-oil production revenue. Whatever that return is they’ll never tell us but it doesn’t really matter: the country is currently using that income to run at least a portion of its budget.
So the new big investment revenue source will be the interest it earns on all this NEW capital it’s going to get by sell part of ARAMCO and other assets. Who knows what that number will be but the KSA doesn’t really have any assets other than its oil production. So what monies they get by those sales they also lose that portion of their current revenue stream. But the plan isn’t to live off of that new sales income but to invest it in some other revenue generating vehicle. Ad get what…10% to 15% ROR?
In today’s market that would be doing damn good. But that would only represent 10%+ of what they SELL in the next few years which will also have to take into account the revenue loss from those same sales. Folks can play with the numbers all they want but I see no way the KSA can replace their current revenue stream (even at the current low price) by getting a small return from sell part of that revenue stream. Maybe if they had sold off a big chunk of ARAMCO when oil was $100+/bbl they might have developed some leverage. But today they are in the same position as US oil companies: selling into a market at a relatively low price to a rather limited number of potential buyers. In reality what the US companies in better financial condition are doing is becoming oil asset BUYERS…not sellers. Which the KSA could actually duplicate today themselves by simply reducing production levels and keeping more oil in the ground as a future revenue source. IOW instead of selling, say $200 BILLION, in oil assets just reduce sales and leave $100 BILLION of oil in the ground that will be worth a lot more in the future.
Rob on Mon, 25th Apr 2016 11:27 am
I want to see if anyone builds them nuclear reactors. I read things here and there, but i don’t see any current construction happening. Their screwed long term with their population. Nothing to export except for sand and sun. Good for solar, not for anything else. Hope those investments can pay off.
Apneaman on Mon, 25th Apr 2016 11:37 am
Hey rockman, King cancer, how’s the recovery effort going down there in Houston? Y’all should be experts at it by now. Be needing them skills again real soon. I guess your main concern is the shipping channel and all the cancer infrastructure eh? It will have it’s day. Nothing down there was engineered to handle what’s coming. Nothing anywhere was. Maybe you can donate a few teddy bears and canned goods to help alleviate your guilt?
Surviving the 100-Year Flood Doesn’t Mean 99 Years of Safety
http://www.bloomberg.com/news/articles/2016-04-22/surviving-the-100-year-flood-doesn-t-mean-99-years-of-safety
Davy on Mon, 25th Apr 2016 11:43 am
Spank, people in Houston can handle things. Men there don’t wear panties. Do you need any help in your shit hole? Vancouver is now considered the money laundering capital of the world.
geopressure on Mon, 25th Apr 2016 11:50 am
I WAS WRONG… They did not mention a shift to the Yuan…
Perhaps Obama talked them out of it at the last minute…
Perhaps they were faking all along…
Perhaps they made the switch quietly…
Hard to say at this time. There were a pile of signals that all led me to believe that we would find out this morning… I mean a LOT of signals…
oh well, I’m up 5% this morning anyway…
geopressure on Mon, 25th Apr 2016 11:59 am
There is something fishy about the whole IPO deal from the start…
The Initial goal was not to generate revenue, but to make Aramco more of a corporate entity who had to answer to shareholders… To separate Aramco from the State, making it more difficult for the U.S. to extort them… That was the initial goal…
Now it has morphed into a plan to diversify out of the oil & gas industry into other sectors… But there is something very fishy about this whole deal…
Apneaman on Mon, 25th Apr 2016 12:09 pm
davy girl, people who deny reality aren’t men. They are little boys in grown up bodies. Real men would have done the hard thing to protect their kids decades ago. Bunch of fucking cowards if you ask me.
Tough talking conservative retards who hate big government, but are once again standing in front of Obama with bowed heads begging for yet another big government rescue. Even the ones with flood insurance – half the premium is a big gov (fema) subsidy – never hear them whine about that do ya?. Real men put their kids future above their ideology.
rockman on Mon, 25th Apr 2016 12:13 pm
geo- More then a little fishy IMHO. And no: the ARAMCO “corporation” will never be controlled by its shareholders…it will be controlled by its board of directors. And if anyone thinks the board won’t be completely controlled by the Saudi govt doesn’t have the faintest concept of how “public” companies even in the US function.
Davy on Mon, 25th Apr 2016 12:18 pm
You dumbass Canadians need to look at your own dirty laundry Spank. You Canadians are worse that Houston by far. You dumbasses say you know better but refuse to shut down the Tar Sands. Hypocrites and assholes is what I think.
Comic Relief on Mon, 25th Apr 2016 2:11 pm
“If by 2020 oil stops we can survive”.
Jesus H if I ever read a more ridiculous statement I will slit my throat. There is nothing these jackasses can invest in that doesn’t depend on oil. The oil they sell.
PracticalMaina on Mon, 25th Apr 2016 3:00 pm
Comic relief, they are buying farmland in the US. They could spend a shitload on air conditioning and solar, and that is what will take place. Once the market re-balances the oil they produce will be worth more on the international market than being burnt to cool the dessert.
HARM on Mon, 25th Apr 2016 3:06 pm
The KSA does indeed have a rich and unlimited bank of renewable resources beyond oil: hate, misogyny, violence, wrath, intolerance and absolutist fundamentalism. Those resources can *never* be exhausted as long as the KSA has the will to keep spreading them.
Only problem is, how to monetize them…
Comic Relief on Mon, 25th Apr 2016 3:23 pm
PracticalMaina you are living in a land of hopes and dreams……..total delusion. Do you really think that if the world doesn’t need oil because of some miracle The KSA will sell oil for more, because somehow the world still requires oil even though they don’t need oil, because of a move away from oil but oil will be more precious and KSA will make a killing because they invested in farmland, because The KSA is so clever to invest in a product that doesn’t require oil…..oh for fuck sake
Practicalmaina on Mon, 25th Apr 2016 3:34 pm
I am saying they will try to cut domestic demand for oil that will be used for electrical needs.
Anonymous on Mon, 25th Apr 2016 3:43 pm
“I think by 2020, if oil stops we can survive,” – why would anybody with 250 billion barrels of reserves even bring such a thing up? But for someone who fears production is about to collapse after 10 years of propping it up through in fill drilling and EOR efforts, then yes, it would surely be at the front of his mind. Twilight in the desert coming right up, just a bit delayed from Matt Simmons original estimate.
Comic Relief on Mon, 25th Apr 2016 3:43 pm
“try to cut domestic demand for oil that will be used for electrical needs,”. Oh that’s alright then, they can “try” all they effing want.
HARM on Mon, 25th Apr 2016 4:21 pm
““try to cut domestic demand for oil that will be used for electrical needs,”. Oh that’s alright then, they can “try” all they effing want.”
Actually, the KSA *should* reduce oil burned simply to generate electricity by replacing it with solar. Burning precious oil to generate electricity in a country that gets sunshine ~365 days a year is nuts. But aside from that, trying to diversify their economy away from oil is a pipe dream.
Comic Relief on Mon, 25th Apr 2016 4:43 pm
It will not work. There have been massive failures all over the world with so called renewables, Spain, Germany, California, Texas………
SA will need to shed somewhere and upgrade the whole grid and they will still need massive FF backup and that is not allowing for the great expenditure in construction and maintenance. Their solution was 60 years ago…..Don’t grow the population beyond a FF dependant level. That also applied to the rest of the world.
Truth Has A Liberal Bias on Mon, 25th Apr 2016 5:36 pm
Saudi Arabia is going tits up. Its easy to see. The royal clique is liquidating infrastructure assets so they can move to southern France with some cash in their pockets once the time comes. If one plans to be leaving it’s a good idea to turn the fixed assets into some cash and stash it around the planet for later use.
Boat on Mon, 25th Apr 2016 5:57 pm
Solar isn’t quite there yet. It’s time of crazy growth is within 10 years though. Same with nat gas for semi trucks running on nat gas.
makati1 on Mon, 25th Apr 2016 6:31 pm
“My father rode a camel, I drive a car, my son flys a jet plane, his son will
ride a camel.”
Or he may ride in his Maserati, being pulled by a camel. LOL
gary on Mon, 25th Apr 2016 7:50 pm
“I think in 2020 we can live without oil.”
They are going to wean themselves off oil in four years ? That’s utterly ridiculous. Maybe in forty years. But in forty years the planet will be fried to a crisp because of oil.
HARM on Mon, 25th Apr 2016 7:57 pm
“I think in 2020 we can live without oil.”
Only if they invent a machine that converts hate into useable energy.
Davy on Mon, 25th Apr 2016 8:22 pm
2020 will be much like it is now because soon little new will be produced. We will increasingly be canibalizing and salvaging our past It is a matter of minimum operating levels and macro trends. The trend is not our friend folks but it is also not going to drop us. Granted anything is possible and this has always been the case. We have plenty of earth to still ruin so get used to the rape and pillage.
Anonymous on Tue, 26th Apr 2016 1:20 am
Does ‘sweeping reform’s entail all those fooking worthless, lazy saudi ‘men’ actually working for a change? If not, then any reforms lol, will be a waste of time. Saudi ‘men’ are even more lazy and filled with a greater sense of entitlement than their amerikan masters.
Kenz300 on Tue, 26th Apr 2016 8:50 am
100% electric transportation and 100% solar by 2030
https://www.youtube.com/watch?v=RBkND76J91k
pat on Tue, 26th Apr 2016 10:44 am
‘Or he may ride in his Maserati, being pulled by a camel’ read that some decades back the reserves have been jacked up by many times to protect their markets share. truly believe the world does not know something only the insiders know, it seems the hole has gone dry….