Saudi Minister Glad of Separation of State from Production
Saudi Arabia's new energy minister Abdulaziz bin Salman Al Saud said September 9 that the separation of the two functions, government and energy production, was better for the country than having them continue under one man.
His appointment September 8 followed the appointment of a new head of Saudi Aramco, the world's largest producer, September 3: Yasir Othman Al-Rumayyan replaced Khalid Al-Falih, who had been also the Saudi energy minister since 2016.
Speaking at the World Energy Congress in Abu Dhabi, bin Salman said that the best model was to have a regulated energy company: "There is nothing I can do better to protect the interests of Saudi Aramco better than to have an arms-length relationship, where the company acts like any other international oil company.... Emphasising the separation is a must." He said the regulator had to be an institution, and the "beauty of the arrangement was that no other agency will be able to reach out to Saudi Aramco except the energy regulator."
This new relationship will be enshrined in the new hydrocarbons law. The country is preparing to sell a small slice of the company and wants to reposition the oil and gas giant as a distinct entity from the state.
But he also said that he had been in the industry for 30 years and so was one of the architects of the oil major and maintaining its influence. In that context, and as a 'consensus builder,' where all decisions were reached by agreement, he is supportive of efforts by Opec + Russia to rein in production in recent years, which he said gave him a sense of achievement. "I am here to build, not destroy," he said, suggesting no break with the past in that regard.
He said that one of the happiest days of his life had been earlier this year, when a $10bn bond had attracted $120bn of interest.
He said the energy minister had formerly been the oil ministry: his new duties will include the whole energy mix, including nuclear and other forms of energy generation and supply. He said the country has 5%-7% of the global uranium reserves and he was also looking at small scale nuclear plants for energy supply in remote regions.
He did not however in his speech say anything about the country's ambitions for LNG production or trade, something that his predecessor had made much of at conferences.
Meanwhile Saudi oil consumption is set to fall as the country raises efficiency levels. Oil and gas will only account for half the country's demand by 2030, meaning that demand will be 1.5mn barrels/day less than would otherwise have been the case.