Saudi ex-energy minister bounces back as investment chief

The man sacked as Saudi Arabia’s energy minister in September has been tapped to head a new investment ministry, in a cabinet reshuffle announced on Tuesday. The move also created ministries for tourism and sport.

Khalid al-Falih previously chaired state oil company Saudi Aramco and oversaw more than half the economy of the world’s top oil exporter.

When Falih was removed from the energy ministry, he was widely seen as having fallen out of favour.

Attracting billions of dollars in foreign investment is key to ambitious plans championed by de facto ruler Crown Prince Mohammed bin Salman to end the economy’s dependence on crude exports and open up its long-cloistered society.

According to royal orders published in state media, al-Falih’s new ministry replaces the Saudi Arabian General Investment Authority (SAGIA), which had been responsible for issuing investment licenses to foreign companies but did not control other key regulations.

“Falih’s return is a small surprise,” said Hasnain Malik, a managing director at Tellimer. “More important is the upgrade of the General Investment Authority to a full ministry, which underlines the importance of private sector home-grown and foreign direct investment (FDI) for the future of Saudi.”

It was not immediately clear if the restructuring would expand investment entity’s authorities. As energy minister, Falih had one of the highest international profiles of any Saudi official.

FDI rose to $3.50bn in the first nine months of 2019 from $3.18bn a year earlier, but still lags behind Riyadh’s ambitions.

The cornerstone of Prince Mohammed’s plans to open the gates of foreign capital was supposed to be the initial public offering of Aramco, but many global investors steered clear when the oil giant debuted on the Riyadh bourse in December.

Falih was privately opposed and had lobbied against it, fearing he would have to step down as chairman of the company, sources close to the matter told Reuters last year.

He was ultimately removed from that position three months before the listing, replaced by Yasir al-Rumayyan, governor of the kingdom’s sovereign wealth fund PIF.

Other royal orders on Tuesday elevated commissions into ministries for tourism and sport, which were identified by Riyadh as two big growth areas. Ahmed al-Khateeb and Prince Abdulaziz bin Turki Al Faisal were named ministers respectively.

The civil service ministry, which is responsible for millions of public employees, was also merged into the labour ministry.

The media minister was removed and the file given to Commerce Minister Majid al-Qasabi, while Housing Minister Majid al-Hoqail was handed additional responsibility for municipalities and rural affairs.