Saudi Arabia has named Yasir Al-Rumayyan, head of the country’s sovereign wealth fund, as Chairman of Saudi Aramco, replacing Energy Minister Khalid Al-Falih, a Saudi official said.
The appointment of Al-Rumayyan, already an Aramco board member, comes as part of the Saudi authorities’ preparations to sell shares in the world’s biggest oil exporter, according to the official, who spoke on condition of anonymity. The appointment is also meant to separate the Ministry of Energy from Aramco and avoid any conflicts of interest as the company prepares for the upcoming IPO, the official said.
“All this shows that in Saudi Arabia there has been some dissatisfaction at the highest levels on how things have been going,” said Olivier Jakob, managing director at consultant Petromatrix GmbH in Zug, Switzerland. “Al-Falih has not really fully delivered on oil prices. He hasn’t delivered the price that’s required by the Saudi budget. There’s speculation that prices and the IPO are linked and they need higher prices to get the valuation they want for the IPO.”
When he was first appointed energy minister in 2016, Al-Falih directed a U-turn in Saudi policy in the face of a U.S. shale boom and tumbling crude prices. He led the Organization of Petroleum Exporting Countries to agree to reduce output for the first time in eight years, starting in January 2017, and persuaded other big producers including Russia to join in the cuts. As the decrease failed to re-balance the market, Al-Falih organized extensions of the curbs, involving roughly 60% of the world’s oil output, through March 2020.
On Friday, Al-Falih lost part of his portfolio when the government announced it was splitting the industry and mining functions from the energy ministry.
Al-Rumayyan is governor of the Public Investment Fund, leading the fund’s transformation from a sleepy domestic holding company into one of the biggest investors in global technology start-ups. The fund has accumulated stakes in electric carmaker Tesla Inc., ride-sharing company Uber Technologies Inc. and has made a $45 billion commitment to SoftBank Group Corp.’s $100 billion technology fund.