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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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Aramco Board Targeted In Anti-Corruption Crackdown

Riyad

A string of arrests of senior government officials in Saudi Arabia has also struck Aramco board member Ibrahim al-Assaf, a former Finance Minister in the Kingdom. The situation apparently remains volatile and the arrest could spell further trouble for Aramco’s IPO next year.

The arrests came after late on Saturday King Salman surprised the public with the unveiling of a new government agency, an anti-corruption committee. The committee is headed by his son, Crown Prince Mohammed bin Salman (MBS), and by the end of the week it had made 11 arrests of members of the royal family, four incumbent ministers, and dozens of former ministers.

Ibrahim al-Assaf is among the most prominent figures detained, as is billionaire investor Alwaleed bin Talal – a member of the royal family and chief of investment firm Kingdom Holding. According to a statement from the company, it had the full support of the government and would continue to operate on a business-as-usual basis.

While on the face of it the arrests are a crackdown on corruption, there seems to be a distinct consensus among observers that the underlying purpose of MBS is to solidify his own power in the Saudi government and get rid of opponents now, as opposed to later.

However, some analysts are worried that this power play could result in the collapse of Mohammed’s ambitious Vision 2030 plans, which just two weeks ago had bankers and investors rush to Riyadh to check out the future opportunities the large-scale reform plan will create.

Related: Will The Third Great Energy Revolution End The Oil & Gas Industry?

The Vision 2030 program’s success hinges on Aramco’s IPO, scheduled for the second half of 2018. Prince Mohammed expects the listing to bring in some US$100 billion into the Saudi state coffers, but there are growing doubts that this will actually happen. While the arrests could have been made in order to show the world that the Saudi state is indeed changing and becoming more transparent, doubts as to the reliability of this change remain.

Meanwhile, President Trump said he has spoken to King Salman about Aramco’s listing on NYSE or Nasdaq. Trump also tweeted that he would appreciate Aramco listing in the United States. A New York listing, while still on the table, is still questionable, however, because of U.S. post-9/11 legislation that makes Saudi citizens vulnerable to prosecution.

By Irina Slav for Oilprice.com

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