• 4 minutes Ten Years of Plunging Solar Prices
  • 7 minutes Hydrogen Capable Natural Gas Turbines
  • 10 minutes World looks on in horror as Trump flails over pandemic despite claims US leads way
  • 13 minutes Large gas belt discovered in China
  • 3 hours 60 mph electric mopeds
  • 2 hours US-China tech competition accelerates: on Friday 05/15 new sanctions on Huawei, on Monday 05/18 Samsung chief visits China
  • 25 mins COVID 19 May Be Less Deadly Than Flu Study Finds
  • 16 hours Norway horrified as new rates make EV charging prices higher than petrol
  • 1 hour China to Impose Dictatorship on Hong Kong
  • 2 hours Why 2030-Isn.t-The-Magic-Year-For-Electric-Vehicles
  • 3 hours Monetary and Fiscal Policies in Times of Large Debt:
  • 4 hours Payback Time: Republican Senators turn the tables on Democrats. The difference is the Republican investigations are legit.
  • 7 hours Iran's first oil tanker has arrived near Venezuela
  • 1 hour DEFIANCE – There are More of Us Than Them
  • 1 hour Let’s Try This....
  • 15 hours Ventura County to Replace Natural Gas Generation with Battery Storage
  • 17 hours Trumpe will win next election, hands down.
The Oil Bulls Are Back

The Oil Bulls Are Back

Some positive news about a…

Is Dieselgate Finally Over?

Is Dieselgate Finally Over?

Five years after Volkswagen’s dieselgate…

Aramco IPO Proceeds To Fund Saudi Defense Projects

Saudi Arabia will use part of the money raised through Aramco’s initial public offering to strengthen its defense capabilities, Saudi Finance Minister Mohammed al-Jadaan told Reuters in an interview at the World Economic Forum in Davos.

The minister told Reuters the Kingdom was making an effort to defuse the tension between the United States and Iran, which spiked after the U.S. assassination of a top Iranian general, and led to a retaliation against military bases housing U.S. troops in Iraq.

“If you look at history, we in this region have managed to weather through worse geopolitical situations, including actual, real wars,” Al-Jadaan said, adding “We work with our military industry to develop our own military assets in the mid-term to deal with these risks, including investment by PIF,” 

“We in Saudi have to focus on the economy and reform ... We firmly believe the disputes can only be resolved by dialogue,” the minister added.

Dialogue, it seems, is not always enough, however. Last year, a Saudi oil field and a processing plant became the target of missile and drone attacks that the Yemeni Houthi rebels took responsibility for but the U.S. blamed on Iran. Earlier this month, investigators assigned by the UN to find the culprit concluded in a confidential report that the Houthis could not be responsible for the attacks.

The drone and missile attacks caused a fire at the Abqaiq oil processing facility and a production outage at the Khurais field, taking 5.7 million bpd in daily production offline. This caused a temporary spike in oil prices as Aramco struggled to restore production as quickly as possible.

Although higher prices would benefit Saudi Arabia, preventing further attacks would be wiser in view of the longer-term ambitions that Riyadh has for Aramco. The company listed at home in December but, Al-Jadaan told Bloomberg, an international listing is still on the table.

Meanwhile, the proceeds from the local listing would go towards strengthening various industries.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment
  • Mamdouh Salameh on January 22 2020 said:
    When Saudi Crown Prince Mohammed bin Salman launched Saudi Vision 2030, he made it clear than an integral part of Vision 2030 is an initial Public Offering (IPO) to sell 5% of Saudi Aramco shares at an estimated $100 bn to be invested in the diversification of the Saudi economy.

    Whilst the international IPO is dead and buried, the Saudi Finance Minister Mohammed Al-Jadaan was reported to have told Reuters in an interview at the World Economic Forum at Davos that Saudi Arabia will use part of the money raised through Aramco’s domestic IPO to strengthen its defence capabilities.

    If the money is to be invested in the domestic arms industry, then it would be part of the diversification of the Saudi economy saving the country from expensive purchases of foreign-made weaponry overwhelmingly American.

    If, however, it is to be used to buy yet more American weapons just to curry favour with the United States, then it is a serious waste of Saudi financial assets. Saudi Arabia has been for years the most lucrative market for the US Defence industry spending hundreds of billions of dollars annually.

    Rather than wasting such huge sums of money on arms deals with the United States, Saudi Arabia could save the bulk of this expenditure by extending a hand of friendship to Iran and its allies in Yemen. This will enhance peaceful relations between the two regional powers and also obviate the need for expensive arms purchases from the United States and other foreign powers. Since the days of the Shah, the United States has used the threat of Iran to blackmail Saudi Arabia and other Gulf countries to buy American weapons.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News