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Global Intelligence Report - 3rd April 2019

Saudi Arabia

Sources

- Aramco insider (current high-level Aramco staff)
- Former Aramco executive
- Turkish investigative journalists in Ankara and Istanbul

Every Reason to Be Alarmed About Aramco

Inside the corridors of Saudi Aramco, there is panic. While media report on the brilliant $69-billion takeover of SABIC petrochemical company by Aramco - particularly emphasizing alleged cost savings for both--the truth of the matter is that this is a disaster for the Saudi oil giant. As we speak to our sources inside Aramco in the wake of the SABIC deal and the $10-billion bond sale, the mood is one of defeat.

Despite the best efforts of Aramco’s top brass to subvert Mohammed bin Salman’s cash grab from its long-siloed balance sheet, the young prince has emerged victorious. The deal will essentially see almost $70 billion transferred from Aramco to the Public Investment Fund (PIF - the Saudi sovereign wealth fund), which Prince Mohammed controls completely.

Aramco executives opposed the deal because it didn’t make economic sense, especially at the high valuation it was ordered to accept - but the fears run even deeper.

For a decade, Aramco has operated as a quiet economic advisory office for the royal family: It is regularly sent details of non-oil deals for analysis by highly trained staff. Those sane economists and analysts, together with their bosses, fear Prince Mohammed will sink huge amounts of the new funds into investments…




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